While the economy in general is doing so-so, there are industries that are sweet spots for growth right now. Many of these are perfect start up opportunities for a small business looking to expand or a new entrepreneur getting started. That said, there are also business areas in free fall now that you’d do best to avoid, and despite the global village created by the Internet, location apparently matters now too.
Roughly half of all new business start ups fail within 5 years. On the “don’t-go-there” list are the following industries:
- Men’s suits, coats and trousers top the list. As best I can tell the only folks who still have to wear these things work in investment banking or law firms. Not big areas for growth right now.
- Photofinishing or a one hour photo shop. Revenues in the industry have dropped 70% over the past ten years, and there’s no sign of a reversal or bottom in sight.
- Same is true for video, DVD and game rentals. Even with Blockbuster gone, the market continues to shrink.
- This is the only one of the list to surprise me – small appliance repair is a losing proposition now. It’s currently cheaper to replace small appliances than to fix them. In a case where that isn’t true, the manufacturer now often insists that they do the repair.
On the flip side consider elder care and wellness as areas of opportunity. Demographics of an aging population that on one side needs care and on the other side is trying to stay healthy drive growth here. Other big areas growing and poised for more growth are warehousing and transportation logistics. As more retail sales shift online, businesses in these areas are capturing what is being lost from bricks and mortar.
According to the folks who publish the Business Journals, where you have a business can be a success indicator. Austin wins the top spot on this index for all the US. It is worth noting though that Pittsburgh takes the prize for the northeast, and ranks 7th nationwide for best places to start a business.