Business Service Centers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 10,300 business service centers in the US offer mailbox, parcel handling, and document processing services to individuals and business customers. The mailbox rental segment provides private mailboxes, packing, shipping, and notary services, and sells mailing and office supplies. The copy centers segment offers document printing, copying, and facsimile services, as well as word processing, and on-site computer rental.
Competition from Large Office Supply Chains
Business service centers have seen increased competition from large office supply store chains.
E-Commerce Drives Growth in Parcels and Returns
The growing popularity of online shopping has resulted in a surge in parcel growth delivery to businesses and consumers, accompanied by a surge in returns.
Industry size & Structure
The average business service center employs fewer than 10 workers and generates almost $2 million annually.
- The US business service centers industry (including copy shops) includes about 6,300 firms that operate over 10,300 facilities, employ 81,000 workers, and generate annual revenue of about $12 billion.
- The US industry is concentrated: the top 50 companies account for about 60% of revenue.
- Large companies include The UPS Store (5,100+ locations), FedEx Office and Print Services (2,200+ locations), and AlphaGraphics (250+ US locations).
- Many mailbox rental firms and copy centers/shops are franchises of large national chains.
Industry Forecast
Business Service Centers Industry Growth
Recent Developments
Jun 5, 2024 - Steady but Slower Industry Growth
- The business service center industry is expected to experience slower but steady sales growth in the coming years. The industry’s year-over-year sales increased by 4.2% in 2022 and 3.9% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate to 2.3% in 2024, then rise nearly 3% in 2025. The industry will then see flat but steady average annual growth of about 3.5% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Inflation is expected to remain a concern for the rest of 2024, according to the May 2024 update of the Outlook Survey released by the National Association for Business Economics (NABE). The NABE Outlook Survey is a consensus macroeconomic forecast by a panel of more than 40 professional forecasters. The May NABE forecast expects inflation to remain around 2.6%, or about half a percentage point higher than the Outlook Survey released in February 2024. Amid stubborn inflation, NABE forecasters dropped their estimate for a Fed interest rate cut to half a percentage point from three-quarters of a point in the earlier February report. The panelists also expect employment growth to slow to about 125,000 jobs per month, and about 90% of panelists believe the US economy will have a so-called soft landing in 2024, whereby inflation falls to 2% or lower without a recession.
- In April, the National Federation of Independent Businesses’ (NFIB) Small Business Optimism Index rose 1.2 points to 89.7, marking the 28th consecutive month of being below the 50-year average of 98. Nearly a quarter of small businesses (22%) cited inflation as their most significant problem. The percentage of small businesses reporting an inability to fill open positions rose three points to 40%. About 56% of those surveyed reported capital outlays in the last six months, unchanged from March. Of small businesses that reported expenditures, 38% bought new equipment, 24% purchased vehicles, and 16% expanded or improved facilities. NFIB Chief Economist Bill Dunkelberg said, “Cost pressures remain the top issue for small business owners, including historically high levels of owners raising compensation to keep and attract employees. Overall, small business owners remain historically very pessimistic as they continue to navigate these challenges. Owners are dealing with a rising level of uncertainty but will continue to do what they do best – serve their customers.”
- Commercial bankruptcy filings increased 39% in April 2024 compared to the same month in 2023, according to bankruptcy date firm Epiq. New commercial Chapter 11 filings increased by 40%, and small business filings under Subchapter V elections within Chapter 11 were up 60% over the same period. Epiq Vice President Micheal Hunter said, “In April 2024, we continued to see very strong double-digit percentage year-over-year increases for both individual and commercial new filers for bankruptcy protection. These increases reflect the increased cost and expense pressures both individuals and businesses are experiencing. Inflation has gradually increased in the first three months of 2024. The recent surge in insurance costs, including medical, auto, and home, and the high interest rate environment continues to place additional pressures on businesses and individuals.” Higher rates of commercial bankruptcies could impact demand for business service centers.
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