People ask me all the time to recommend what kind of business they should start. My usual response is that you should start a new business based on what you are passionate about and what gives you a sense of purpose. But it can also be useful to think about what is currently trending among startups. To that end, we recently surveyed the Wicked Start database to determine the most popular types of businesses being started. Keep in mind that these aren’t the only possibilities out there. But conditions seem to be right at the moment to help new ventures in three key industries be successful. In fact, these three industries accounted for 36% of the total new ideas incubated at Wicked Start last year.
With the proliferation of customized diets, food allergies, and the increased demand for innovative and artisanal food & beverage products (ranging from cheese to beer), there is ample opportunity for startups to create, launch, and showcase their products at farmers’ markets and with local grocers.
Creating and selling retail products has become more accessible thanks to a combination of decreased manufacturing costs and easy access to online distribution platforms such as Etsy, iCraft and ArtFire. These online tools have enabled many entrepreneurs to start a business from home or while working part-time, by making the product themselves or taking advantage of an array of low-cost manufacturing options, especially those leveraging the Internet. These trends have helped accelerate locally produced and “Made in America” items, which have been growing in importance to U.S. consumers. I predict an increase in these types of startups in 2014 and beyond, creating unique and mass customized products with the advent of on-demand manufacturing.
Businesses that provide products and services to other businesses round out the top three new business industries being started today. Innovators are also developing new time saving and cost reduction services to market to businesses. In large part, the Internet has enabled many of these new business opportunities, such as managing and backing up critical business data, crunching business data, and managing CRM or sales solutions to flourish.
There are more than 500,000 businesses started in the U.S. every year. Technology has continued to drive down the costs of starting a new business, which makes starting up today more appealing — and accessible — to aspiring entrepreneurs. In fact, the average cost of starting a business now is approximately $68,000, which is much lower than it was even five years ago.
Now that I’ve identified some of the top industries for startups, think about your idea and the industry that it is in. Make sure that whatever the idea, it’s in an area that’s growing. You’re going to be spend a lot of time, energy and money on launching your new venture, so make sure that it’s in an industry with plenty of opportunity.