Small business is big business in the U.S. According to the National Federation of Independent Business, small businesses are responsible for about two-thirds of all new jobs created in this country. And many of those enterprises are growing at a breakneck pace, with some starting out in garages and tiny offices that slowly evolved into the headquarters they are today.
According to Paul Haarman startups aren’t just for high-tech companies or Internet sensations anymore – even mom and pop shops are enjoying huge success due to the power of social media, location awareness, mobile computing and other trends impacting today’s landscape. As an Entrepreneur contributor Steve Strauss writes: “There are more small businesses than ever before — almost 5 million in America alone.” That means billions of opportunities for entrepreneurs and would-be business owners to take advantage of.
So what kinds of small businesses are poised for growth?
Here’s a quick look at eight hot industries that should offer some solid entrepreneurial prospects over the next few years:
1. Mobile apps:
According to information technology research and advisory company Gartner, mobile app downloads will exceed 205 billion in 2011 (with about 250,000 available today), or approximately 10 million per day. The sheer number of smartphone users is growing rapidly as well — the U.S. Census Bureau recently estimated that more than 50 percent of Americans owned such devices as of 2010. It’s no wonder Google recently said it was planning on giving out $10 million worth of Android developer grants throughout this year.
LinkedIn, for instance, is reportedly looking to invest millions of dollars into startups, and at least one group is planning an entire conference around the idea of investing $100 million in app makers.
That’s a lot of opportunity — but there are also some risks involved, as over 90 percent of apps fail within the first three months. Even so, this field should remain hot due to ongoing innovations in mobile computing and social media usage. There’s no question that most app companies rely on either Apple or Android – but how many can say they’re not reliant on Google? I just installed my first Windows Phone 7 today (HTC Trophy). Maybe I’m missing out here or maybe it isn’t that great? Let me know what you guys think about WP7.
Online retailers are enjoying some major growth right now, too. A new report by the United States Department of Commerce found that U.S.-based ecommerce sales grew 13 percent in 2010, even though brick-and-mortar stores were feeling the pinch due to lower consumer spending. But consumers are more likely to spend money online than ever before, especially on mobile devices. And according to research by Gartner, global ecommerce sales will surpass $1.5 trillion in 2011 — making it one of the largest industries worldwide.
3. Cloud computing:
One of the most-discussed trends over the past few years has been “cloud computing,” which refers to the idea that you can avoid buying expensive, cumbersome hardware and instead rely on outside services for various computing needs. That’s why companies like Amazon are finding great success with their cloud hosting services, while online job marketplaces like Cloud Blue are getting a lot of attention. Obviously there is still some risk involved for new business owners in this space — after all, the term “cloud” itself is somewhat nebulous at this point (at least compared to something tangible like “app”). But as more businesses find success online, it seems inevitable that there will be increasing demand for these kinds of services.
4. Mobile payments:
Mobile payment platforms like Google Wallet, ISIS and Square are paving the way for shoppers to use mobile devices (and even certain kinds of wearable technology) to make payments from their bank accounts. That’s why mobile payment-related startups like Jamba Wireless are finding a growing audience — and investors. In addition, according to a study by Juniper Research, mobile payments will triple in value by 2016. Its unclear how many cell phone users would actually ditch their traditional credit cards for these services, but given the number of smartphones users, it seems likely that there will be at least some demand for this kind of platform.
It’s no secret that brick-and-mortar restaurants are struggling right now (just ask any hometown pizza joint), but the food industry is still ripe with opportunity for entrepreneurs willing to innovate on existing concepts or introduce new business models. That’s why one of the top five most popular industries for startup companies these days is restaurants, according to a study by Startup Nation. And it’s becoming increasingly easy to get in on the action with automated restaurant technology platforms like Ono Poke, which are capable of serving up fresh food virtually anywhere.
Conclusion by Paul Haarman:
There’s no doubt that the startup world is experiencing a lot of change right now — and these five industries highlight some of those trends. The question is: which ones will be as profitable as they are popular?