The long-term outlook for your chosen industry is an important thing to consider when you’re deciding whether to take the plunge into small-business ownership. Getting stuck holding last year’s bag while the market moves on to bigger and brighter things isn’t exactly a path to success. With that in mind, here’s a look at three industries that analysts expect to fly sky-high in the next decade — and three that are set to crash and burn.
The future looks bright for …
- App development. Tablets and smartphones are two of the hottest devices around, and their apps are going like gangbusters. Apple’s App Store recently surpassed the 15 billion apps download mark, while Google’s Android Market hit 4.5 billion downloads in June and is on pace to move 1 billion apps every 2 months. Last year, KPCB announced a $200 million investment fund for Apple app developers, and other investors have followed suit.
- Niche consulting. Many companies have had to tighten their belts over the past few years, and the ensuing layoffs have left many niche experts without a job. Rather than hiring new employees, businesses are turning to consultants to fill the specialized knowledge gap: Inc. magazine reported that the niche business consultancy segment is expected to grow by 5.9 percent by 2016. And a study released by the Bureau of Labor Statistics says that the number of management, scientific, and technical consulting jobs are expected to grow by 6.2 percent between 2008 and 2018 — the largest increase ever in a ten-year span.
- Internet publishing. More and more people are turning to digital media to fill their news and entertainment needs as tablets and smartphones saturate the market. Top newspapers like The New York Times and The Wall Street Journal are now available in tablet-optimized digital versions, and IBISWorld identified internet publishing and broadcasting as one of the fastest growing industries around. The niche saw a 25.2 percent leap in revenue between 2000 and 2011, and it’s expected to grow by another 6.8 percent by 2016.
But the future looks bleak for …
- Physical media. As noted above, the digital age has arrived and physical media is so, like, 1999. Netflix, iTunes, and their ilk dominate the landscape. IBISWorld expects DVD, game and video rental revenue to drop 11.2 percent and record-store revenue to plunge 11.6 by 2016, while the Small Business Administration reports that more than 25 percent of all video distributors, bookstores, and periodical and newspaper merchant wholesalers now default on their small-business loans.
- Some specialized retailers. The SBA says that over a quarter of all shoe and men’s clothing stores defaulted on their small-business loans between 2000 and 2009. Meanwhile, IBISWorld’s list of dying industries ranks formal wear and costume retailers in tenth place, with an estimated 17.2 percent decline in revenue by 2016. Chalk the losses up to cheap imports and the poor economy.
- Real estate agencies. Every locale is different, and fresh blood may be just what the real estate market in your area needs. But the odds aren’t in your favor: The SBA’s data shows that just over one of every four offices belonging to real estate agents and brokers fails to pay back its small-business loans, and CNN Money reports that “housing starts are near historic lows and consumer confidence remains depressed.”