10 Hottest Industries to Buy a Business in Right Now (2016)
Ready to pursue your dream of small business ownership?
It’s a great time to own a business. Emerging markets with high growth potential, a steady economy, and increased consumer spending have laid the groundwork for a successful future for small businesses in America. SBA loans are being granted more frequently and with lower interest rates and Baby Boomer are nearing retirement age, making it a great time to pursue your dreams of entrepreneurship. These factors combined create a vibrant atmosphere for entrepreneurs looking to pursue their dream of small business ownership. Buying a business is a huge life decision and should be done after extensive research and careful consideration. But entrepreneurship is exciting and one of the best parts of buying a business is choosing your industry. We have looked into the top 10 industries with the most potential and stability for investing and hope they will help you on your journey to small business ownership.
The warehouse and storage industry has become one of the fastest growing sectors in our economy, with self-storage facilities proving to be one of the most reliable and profitable within the sector. Self-storage has been named as a fastest growing sector for over 40 years and has been classified as a “recession-proof” business. Even in tough economic times, most Americans will give up the everyday luxuries before turning in the keys to their storage units. In an economy that is continuously in flux, managing a business that does not change much with the financial tides can be a major bonus.
Around 9% of all Americans have a storage unit, even if they have a garage or attic, and if you combined all of the storage space in the nation, it would equate to over 2.3 billion square feet of storage. Over 6% of all storage units are leased to military personnel, sometimes accounting for as high as 90% of a facility’s customer base. Not only do active military personnel contribute thousands to your bottom line, but they are often loyal to the facility in which they have stored items before. With profit margins as high as 36% and annual growth rate of 5%, self-storage is a lucrative yet stable industry for any potential business owner.
Ecommerce & Online Auctions
Ecommerce and online auctions are a great option for all types of entrepreneurs. Ecommerce is the trading or selling of products to consumers via the internet and in the past decade, the ecommerce world has exploded with growth. Ecommerce is a massive industry with several smaller sectors within it, including everything from online auction companies like EBay to independently operated stores on Etsy. Online auctions alone account for a combined annual revenue of nearly $6 billion dollars and experts estimate that by 2017, 60% of all U.S. retail sales will involve the internet to some degree.
One of the most valuable growth opportunities for ecommerce businesses is mobile commerce. In the age of millennials, more people are using their smartphones to make purchases than ever before and that trend is expected to increase over the next few years, Mobile commerce accounted for $104 billion dollars in sales last year, a 38% increase over 2014. Ecommerce businesses are a great option for acquisitions or start-ups.
Logistics & Supply Chain
The logistics and supply chain industry has seen its fair share of action over the past few years. With the plummeting fuel prices that first quarter 2015 brought in, the launch of delivery services through online retail stores such as Amazon, and the increasing need for faster service time between order and delivery, the logistics and supply chain industry is booming.
Logistic and supply chain management is an integral part of almost every business and includes the movement and storage of raw materials, works in process inventory, and finished goods. The process begins when an order is placed with the customer service department and is completed when the product is ready for consumption and transported offsite. Industry demand is finally eclipsing the cost of doing business and with the ever-changing technological advances, logistics and supply chain businesses are a great investment for any buyer.
Waste Management, Recycling, & Remediation
During the last 30 years, our society has changed the way we take care of our planet and given way to a massive waste management industry. The waste management industry is now responsible for over $86 billion dollars in revenue annually and over 405,000 jobs. Due to government and municipality contracts, businesses in this sector are often incredibly stable and in a constant state of growth.
As Americans continue to work towards a greener lifestyle, new growth factors are leading the waste management industry into a very profitable 2016. Currently, Americans produce around 475 pounds of food waste per year, coming out to nearly 70 million tons. Food waste is the 3rd largest component in our landfills and many businesses within the waste management sector are taking advantage of that. Solid waste remediation is also a trending opportunity with Americans manufacturing nearly 251 million tons of waste and 34% of that gets recycled. Trends such as hazardous material disposal, food waste, recycling and remediation are creating opportunities for waste management companies to break into niche markets and flourish.
The renewable energy industry has seen a major increase in private and governmental interest, revenues, and facilities in the last few years and 2016 is predicted to see an even steeper increase. Wind turbine service technicians will see 108% job growth by 2024 while the entire renewable energy industry now employees over 7.7 million people worldwide. One out of every 83 new jobs created in the U.S. over the last 12 month period was created by the solar industry – representing nearly 1.2% of all new jobs.
The renewable energy industry began its upswing in 2011 with huge surge from the auto industry in electric cars. The green phenomena has continued to grow as more fuel efficient cars hit the roads, solar panels become more popular, and more cities are utilizing wind polar as an energy source. Businesses in this sector can expect a increase in sales and revenue as our society continues to raise the standards of environmental conservation.
Translation & Interpretation Services
2016 Projected Growth: 4.9%2016 Employment Growth: 7% by 20242015 Net Profit Margin: 25.1%
Within the past few years, the translation and interpretation services industry has exploded with growth. As more companies expand into global markets and immigration rates continue to rise, the demand for business translation services continues to rise. Businesses are no longer utilizing robots to translate, they prefer people to ensure accuracy and attention to language nuances and culture. The translation and interpretation industry is expected to grow by nearly 5% this year and increase their economic output by $39 billion by 2018.
In terms of job growth, translation and interpretation services is the fastest-growing industry in the country. By 2022, interpreters and translators can expect a 46% increase in job growth, making it the fifth fastest-growing occupation in America. Between 2014 and 2019, nearly 13,000 jobs will be added to the profession and experts are predicting a total increase of around 7% per year. Due to an increased demand and vibrant job market, businesses within the interpretation and translation filed can expect a steady and profitable future for years to come.
As with most sectors within the technology field, telecommunications is one of the best industries to invest in during 2016. Growth factors in the telecommunications industry include the increasing demand for mobile communication, fiber optic technology, global technologic advances, and smartphone devices that allow for constant connectivity. Businesses in the telecom sector can expect data consumption to continue to grow with more streaming content and the Internet of Things, but should continue to focus on high-end yet affordable voice over services.
Economic output for this industry is expected to be one of the strongest in the country, with an estimated output growth of over $780 billion by 2022. Due to this major increase in economic output, telecommunications has been ranked 8th largest industry by revenue. Job growth in the sector isn’t as strong as others, but employment is up. Telecommunications is the industry with the largest employment in the information sector, accounting for almost a third of the sector’s employment in 2012. Nearly 800,000 people are expected to be employed by this sector before 2022.
Digital forensics is an up and coming sector of forensics science that focuses on the recovery and investigation of data found in electronic devices, computers, and cloud storage that can be used as evidence in a criminal investigation. Digital forensics comes after years of rapidly advancing technology and a new generation of criminals that can be tracked based on their electronic devices as opposed to the old school detective tailing them in a car. The digital sector of the forensics field is expected to reach a value of almost $5 billion by 2021, equating to a compounded annual growth of 12.5% between 2014 and 2021.
As we adapt to new technology and the age of IoT, the industry is forecasted expand exponentially. To cope, job growth in the industry is expected to follow suit and grow at a rate of 22%. According to the BLS, 120,000 jobs are expected to be created for information security analysts and computer systems analysts over the next decade. The industry and the law have a lot of catching up to do in the world of cybercrime, making this industry a safe bet for purchasing or starting a business.
Internet Publishing & Broadcasting
As with several other industries on this list, growth is being fueled by technological advances and our society’s desire to constantly be connected to the internet. This need is giving way to a major growth spurt in the internet publishing and broadcasting field, with a projected growth rate of 12% for 2016. Companies in the internet publishing and broadcasting industry create, build, design, and manage websites that help users find information online and well-known businesses in this arena include Google Facebook, Bing, and Twitter. Currently, businesses in this industry are catering to about 3.2 billion internet users worldwide and thousands of new users are connecting via computer or smartphone every day.
The client base for this industry is always growing, creating a variety of opportunities for businesses in this and an estimated annual revenue of over $120 billion. Trend and opportunities in this field include mobile advertising, net neutrality, international expansion, and diversifying advertising solutions. Forecasters are expecting mobile advertising to grow at a rate of 32% per year and to contribute to 87% of all of the advertising dollars spent globally before 2018.
2016 Projected Growth: 3%2016 Employment Growth: 9%2015 Net Profit Margin: 15%
Technology is the driving force of so many other industries, it’s no surprise it made our top 10 list. Last year, businesses and consumers around the globe spent close to $3.7 trillion dollars in IT services and as developers inch closer to the Internet of Things, perfecting cloud computing, redefining cyber security, and introducing new devices every day, the demand for IT services is greater than ever. While the sector as a whole may be slowing, economists still expect IT services to hit $3.8 trillion in revenues in 2016 and increase all computer-related occupations by 22% within the next 4 years.
Growth factors for the technology industry include cyber security, Internet of Things, data and analytics, mobile devices, and cloud storage. Businesses in this industry can expect spending on cloud storage systems to climb to $191 billion by 2020 and the growing ecommerce sector opens up a growing market to IT businesses looking to expand.