Got the entrepreneurial bug? The potential for growth should rank among the critical considerations for any new business venture. That doesn’t necessarily mean you want to become the next GE or Apple — there’s much to be said for starting small and staying that way. However, a thriving industry can be as much of a factor as your own elbow grease in determining whether or not you succeed.
IBISWorld recently published a report on the top 11 industries for starting a new business in 2012. The market researcher made its picks based on criteria such as projected revenue growth, 2011 profit margin, and barriers to entry. The list includes some long-established fields, such as consulting and human resources and benefits administration. The appearance of many web-based concerns, such as e-commerce, online publishing, and survey software, shouldn’t come as a surprise, either — they’ve been trendy for some time.
If you develop games for social networks, well, yours might be the hottest industry of all: IBISWorld predicts some 250 new businesses will enter the sector this year, drawn in part by the astronomical success of startups like Zynga, which hit more than $1 billion in revenue in four years.
But “hot” doesn’t have to mean “high tech” — even in 2012. Here are five prime industries that caught our eye, because they all seem to fit the small-business mind-set very well.
- Wineries and craft beers. There’s no Facebook-like boom story here — simply one of consistent growth, particularly for American winemakers. Wine is no longer just for baby boomers, as even Millennials have a taste for the grape. It’s not just a regional business, either: The IBISWorld report notes that every state now has at least one vineyard, though California continues to be the place for wine.
- Relaxation beverages. If you think this is a fancy phrase for wine and beer, think again. “Sleep-aid beverages” are the yin to the energy drink’s yang, intended to help you hit the sack after guzzling caffeine all day. The report projects nearly 25 percent annual revenue growth for the category through 2016.
- Ethnic supermarkets. Stores that primarily sell “ethnocentric food” benefit from broader demographic trends. Specifically, the Hispanic and Asian populations in the U.S. — which comprise a whopping 98.3 percent of the industry’s sales — grew exponentially during the past decade and appear poised to continue doing so. IBISWorld expects such businesses to do especially well in the West and Southwest, but notes that other regions with pent-up demand or thriving ethnic communities offer similar opportunities.
- Street vendors. Enabled by broader trends such as mobile payments and growing consumer demand, food trucks and other street vendors have become a booming business. Yet the businesses themselves remain truly small: They average just four employees each. IBISWorld points out that this is an industry with no large, established companies to compete with. (The same can certainly not be said of e-commerce, on the other hand.) That’s one thing any small-business owner should love. Another thing: The industry earned a 23 percent profit margin in 2011.
- Corporate wellness services. The report calls this segment “a hotbed of startup activity,” thanks in large part to rising health-care costs and spiking demand from companies that get a break on insurance premiums for offering wellness programs to employees. As a result, IBISWorld projects nearly 10 percent annual revenue growth through 2016 for these service providers.