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A few weeks ago I wrote
to you about how 2010 must be a year for building. I have often spoken of and
written about the fact that small business will be the way we restart our
economy. The bailouts, stimulus’s and takeovers are interesting, but it is
the American Entrepreneur that will bring us back to prosperity. Almost 10%
of the unemployed who got jobs in the second quarter of 2009 did so by not
actually getting a job, but by starting their own businesses. That is up from
under 3% in 2008. If you have been biding your time waiting for the right
time to get your business started or moving your business to the next
level….the time is now! More than half of today’s Fortune 500 companies
started in a recession or bear market. So if now is the time for new
businesses, what types of businesses stand the best chance for success? Let’s
take a look at the top trends for business in 2010 and beyond, in no
particular order.
Education
With lay-offs and
unemployment high, many people are re-tooling their skill set. College and
University enrollment is way up - at almost 12 million students. Tuition
revenues are expected to increase by 5% to $421 billion. Less expensive trade
schools and on-line schools are growing even faster. The opportunities for
small business in the field of education are big. By leveraging technology,
it is very possible for small companies to make a big move in providing
training. Training for the jobs of tomorrow, or even better, training the
entrepreneurs of tomorrow is a very lucrative business. Look at the other
trends, can you teach people skills that will make them more valuable in one
of the top trends? If so, you may have something there.
Living Smaller
Consumer spending is down to an average of $56 per day, which is down over
30% from last year. Bling is a thing of the past. Even those who can still
afford a big lifestyle are cutting back due to guilt. High-end retail is way
down, while dollar stores and resale shops are thriving. The focus is on
value. There are a few ways for entrepreneurs to play this trend. The obvious
way to take advantage of this trend is to open resale shops, both brick and
mortar and on-line. Providing value could also mean re-framing your business.
For example, move from a high-end service provider to helping people to do it
themselves. Do-it-yourself still remains big for the next several
years. Now is not the time to start a luxury valet dry cleaning business, but
it may be the right time to offer a discounted laundry service that can
charge customers less, by perhaps offering pick-up and delivery and by saving
rent on a high traffic location.
Alcohol,
Entertainment and Other Diversions
The past few years has seen a steady growth in the sale of alcoholic
beverages, closing out last year with a record high of $455 billion in sales.
Movies and other forms of entertainment are also doing well. In down times,
people look for escapes, however value is still important. People are
drinking more, but they are drinking at home instead of bars and have opted
for less expensive options. Finding opportunities for small business in this
area takes a little more thought, but the ideas are there. One idea is to
promote low cost, high value entertainment venues in your area. Another idea
leverages education and living smaller trends by teaching people ways to
entertain at home and save money (look at the huge increase in cooking classes
for proof of this trend).
Green Energy
With a lot of government money being focused on “green energy” and
conservation, we all know this area is booming and will continue for awhile.
At least the venture capitalists know it. In 2009, almost one third of all VC
investments went to clean technology (solar, biofuels, the smart grid, and
the like). With this much money moving into a particular sector,
opportunities for small businesses are abundant. I have already seen
some successes with people doing home and business energy audits and sales
and installation of energy effective products. This spring, many states are
set to roll out the “cash for caulkers” program. This program offers
federal money to the states to subsidize the purchase of energy effect
appliances and other energy saving products.
Senior Services
Today there are more than 37 million senior citizens in the United States. In
20 years, they will increase to one fifth of our total population. Not only
is this group large in numbers, but they also have money to spend. The
current spending power of senior citizens is more than $1 trillion and in 20
years….I can’t count that high. If you want to know the one trend that will
spur the most business development - this is it! Opportunities for businesses
in vision care, hearing aids, personal training for seniors, senior dating
services, and senior concierge services are just the tip of the iceberg. This
area has been called by some the “silver services” sector, but it sounds more
like gold to me.
Life Support
With the
recession and the trend towards living smaller, it might be surprising to
learn that more people than ever are paying people to help with their
domestic chores. 10% of all households now hire cleaning services and 70% of
those do it twice a month (don’t let my wife see that). Tutoring, test prep
and drive schools are expecting a revenue increase of over $100 million to $7
billion in 2010. Sports programs and coaching revenue is expected to grow 4%
this year. This sector has been attracting so much attention, it has
been given its own name: “Parental Outsourcing”. I think one of the reasons
this area is growing is because the number of entrepreneurs is growing, and
one thing you learn fast when you start a business is that you need some help
with things around the house.
Other trends worth paying
attention to are in the areas of Health and Wellness, Pets, Buying Local and
even the State of Texas. Yes Texas! It seems that for the most part, Texas
has ignored the economic slowdown and just kept on with business as usual. In
2009, Texas accounted for 59% of all new jobs created. It is interesting to
note that Texas does not have a state income tax, yet it is the only state
with a budget surplus.
Whatever area your
business is in, keep your eyes on the trends, stay nimble and be ready to
move as the market dictates. None of us want to be in this decade’s buggy
whip industry.
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This Week's Quote
You
cannot bring about prosperity by discouraging thrift. You cannot help small
men by tearing down big men. You cannot strengthen the weak by weakening the
strong. You cannot lift the wage-earner by pulling down the wage-payer. You
cannot help the poor man by destroying the rich. You cannot keep out of
trouble by spending more than your income. You cannot further the brotherhood
of man by inciting class hatred. You cannot establish security on borrowed
money. You cannot build character and courage by taking away men’s initiative
and independence. You cannot help men permanently by doing for them what they
could and should do for themselves. — William Boetcker
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