Every budding entrepreneur wants to find the next big growth sector. A recovering economy and changing consumer needs are creating opportunities for new businesses, and market research firm IBISWorld has identified the fastest rising industries for startups.
Those with strong projected growth are fairly new, according to IBISWorld Industry Research Analyst Brian Bueno. Although U.S. manufacturing is expected to shrink, Bueno believes that robust demand in service and technology sectors will likely spur business creation.
Here are five of the hottest sectors for 2012 and beyond.
1. Corporate Wellness Services
This sector is expected to be a hotbed of startup activity in years to come. Rising healthcare costs coupled with employee wellness discounts have fueled corporate demand for the services of wellness providers. The average annual growth rate is projected to reach 8.7%, and the annual revenue growth rate will reach 9.8% by 2016, reports IBISWorld. For more industry information, visit the Medical Wellness Association at www.medicalwellnessassociation.com.
2. Food Trucks and Street Vendors
Thanks to a love of exotic foods and eat-on-the-go convenience, street vendors from pushcarts to food trucks are growing at a fast pace. The street vendor industry is projected to achieve an average annual revenue growth of 3.7% over the next five years to top a total $1.7 billion. While fast food businesses have experienced a slowdown due to changing consumer tastes and the struggling economy, demand for unique and gourmet food trucks has surged, reports IBISWorld. There is broad opportunity for vendors in large metropolitan areas across the country. To learn more, see “Selling Without a Storeâ€ at BlackEnterprise.com.
3. Social Commerce
Niche segments that combine social media with content appear to show the most promise, notes Bueno. In addition, e-commerce will continue to flourish with no slowdown in sight. This makes social commerce in particular a growing trend. Social commerce combines the elements of social media and e-commerce, says Bueno, allowing shoppers to interact while searching for products online. Surveys show that millennials want to shop more within sites like Facebook. Retailers and brands are using social commerce to engage customers. Martha Stewart recently teamed up with the social commerce startup OpenSky. IBISWorld projects an annual revenue growth rate of 9.6% by 2016 for e-commerce firms.
4. Social Network Game Development
This industry has experienced tremendous growth since 2007 because of the growth of social network websites. Social network games include the popular FarmVille and Mob Wars. Opportunities are opening up for companies with new ideas capable of capturing audiences, especially as games continue to shift to smartphone applications, reports IBISWorld. Social gaming is heavily app driven. Over the next five years, industry revenue is projected to grow an average of 24.4% annually. More than 250 social gaming companies are expected to enter the industry this year. Professionals can consult Blacks In Gaming (www.blacksingaming.org), a trade group that helps minority entrepreneurs develop apps.
Beverages that do more than quench your thirst, such as energy and relaxation drinks, have grown rapidly in popularity. But don’t discount old industry drinks like wine and beer. Wine consumption topped 2.54 gallons per year, per person in 2010 and wine is a growing favorite among millennials. Adding to this trend is the growing popularity of American wines in international markets. In 2012, more than 280 wineries are expected to open in the U.S. IBISWorld states that medium barriers to entry and moderate concentration among the large wine companies are creating opportunities for new entrants, especially inexpensive wines, despite substantial startup costs. The Association of African American Vintners (www.aaavintners.org) supports wine professionals worldwide.