Financial Armageddon has been postponed. Despite the gloom, know this: There’s still money to be made in high-growth businesses with low barriers to entry and terrific prospects for entrepreneurs willing to put in some hard work. IBISWorld, one of the nation’s top market research firms, has identified the high-growth businesses with the best money-making opportunities for entrepreneurs and investors right now. Here’s how they stack up, ranked by annual growth expectations over the next 3-5 years:
1. eCommerce and Online Auctions: With anticipated annual growth of 12.1 percent to 2013, this sector has huge opportunities to buck the economic trends. Newly-thrifty Americans are going online in ever-increasing numbers to search for the best deals on everything. This industry has low entry barriers and the cost of purchasing, establishing, and maintaining a website is low, making it an encouraging prospect for new entrants, says Toon van Beeck, senior analyst with IBISWorld. Just keep in mind that the costs of establishing, and maintaining a more advanced e-commerce site with enhanced functionality and features is much more significant. Setting up and maintaining databases can also be costly and maintenance requirements are ongoing.
2. Video Game Retailing: As an industry experiencing 11.4 percent annual growth, video game retailing is a lucrative business right now. With low barriers to entry and modest initial capital requirements, this industry is well suited for new business owners. Plus, securing contracts from game wholesalers is relatively easy these days, and the only significant barrier for new entrants is the cost of buying stock for initial sale.
3. Services for the Elderly and Disabled: Growth and demand is steadily rising here (7.1 percent annual rate), and it is a trend IBISWorld expects to continue as the baby boomer generation approaches retirement age – spurring renewed demand like never before for age-specific services. Startup costs are much higher in this line of business, however, since you must invest in and often modify premises, hire qualified nursing and auxiliary staff, and buy or lease specialized equipment. Other entry barriers are low, and tax concessions and rebates are available for non-profit organizations. Currently, 86 percent of industry players operate without having to pay taxes – a significant incentive.
4. Community Food Services (6.9 percent annual growth): Dismal economic conditions have produced a rapid rise in the need for community based food services. For new entrants, this $5.3 billion industry offers profitable opportunities. Characterized by low barriers to entry, minimal capital requirements and excellent growth, community food services are both a noble and lucrative industry to enter.
5. Fashion Design Services (annual growth rate 6.3 percent): This one is unexpected. But the low price of admission could product big profits for talented entrepreneurs. While entrants require innovative design and creativity, demand for industry services from growing international markets such as China will support this area in the long-run.
The beginning stages of any new fashion business will be challenging, but for the short-run IBISWorld expects a shift in designer focus towards producing fashionable yet affordable clothing, as budget-conscious consumers drive overall prices down. van Beeck advises new entrants to differentiate their services based on creative skills, quality, and witty self-marketing rather than through advertising.
6. Vocational Rehabilitation Services: Rising unemployment and displaced professionals are spurring demand for vocational rehabilitation services as the workforce becomes starkly competitive. “Getting people back to work will be a key priority for the government, so this industry will enjoy strong federal support. Demand for industry services will be strongest in the regions most affected by the economic crisis. The recession is driving demand for training and return-to-work programs, and although the level of capital intensity is relatively low and industry assistance is high, it is a tougher field to penetrate. Industry contacts and counseling skills are particularly important.
7. Landscaping Services: The aging population is driving demand in the landscaping sector, which is also benefiting from businesses, government and time-poor households outsourcing landscaping services. Landscaping is an attractive startup proposition because of low barriers to entry, as well as low initial capital requirements.
Many people can start with equipment they already own, and there is no need for a formal office or additional staff. However, competition is heating up making it more difficult for newer players to stand out. All in all, strong growth will return around 2011, when income levels are expected to recover and job insecurity subsides.