Friday, January 3, 2014

BUSINESS Tip-Fastest Growing Industries for Small Business

Want to take the plunge into entrepreneurship? Here is an article by Catherine Clifford of Entreprenuer magazine who writes this article. I am sharing to you because I found it useful for myself. And I hope you learn a thing or two from this as well. Happy Great New Year everyone!


Past performance is no guarantee of future results, as the old business truism says. But you also may have heard that you can’t know where you’re going without knowing where you have been.
To get a sense of which industries small businesses are growing in, the analysts at Raleigh, N.C.-headquartered private-company financial-information company Sageworks ran some numbers for Entrepreneur.com. Here’s a look at the industries where U.S. companies with $10 million or less in annual sales have shown the highest and lowest percentage change from Jan. 1 to Dec 31, 2012. As a benchmark, the average growth rate across all U.S. small businesses in the time period was 8 percent, says Libby Bierman, an analyst at Sageworks.
Fastest-Growth Industries for U.S. Small Businesses in 2012
  1. Residential building construction: 14.77 percent
  2. Building custom software and servers for businesses: 14.29 percent
  3. Machinery, equipment, and supplies merchant wholesalers: 13.75 percent
  4. Management, scientific, and technical consulting services: 12.31 percent
  5. Architectural, engineering, and related services: 11.40 percent
  6. Foundation, structure, and building exterior contractors: 11.37 percent
  7. Building finishing contractors who make additions, alterations, maintenance and repairs: 11.32 percent
  8. General freight trucking: 10.41 percent
  9. Services to buildings and dwellings, including pest exterminators, janitorial services, and landscaping: 10.11 percent
  10. Other specialty trade contractors, including site preparation activities and other specialized trades: 10.04 percent

Slowest-Growth Industries for U.S. Small Businesses in 2012
  1. Skilled nursing care facilities: -3.29 percent
  2. Printing and related support activities: 1.86 percent
  3. Automotive repair and maintenance: 2.81 percent
  4. Offices of physicians: 3.00 percent
  5. Highway, street, and bridge construction: 4.24 percent
  6. Insurance agencies, brokerages, and other insurance-related activities: 4.32 percent
  7. Lessors of real estate: 5.07 percent
  8. Other miscellaneous manufacturing including jewelry and silverware, sporting and athletic goods, dolls, toys, and games, office supplies other than paper, and signs: 5.55 percent
  9. Offices of health practitioners other than physicians and dentists, including chiropractors, optometrists, mental health practitioners, speech and occupational therapists: 5.98 percent
  10. Other amusement and recreation services including bowling centers, golf courses, and recreational centers: 6.03 percent
The good news for entrepreneurs is that much of the fastest growth is in service businesses, which can be started without a lot of money to buy equipment and inventory, says Bierman. Software development, management consulting and architecture firms have been frontrunners have been for a few years now, says Bierman.
Not all of the businesses on the fastest-growing list are service based. In particular, the residential housing market has just started to recover, and that is supporting businesses related to the construction industry, including foundation and exterior construction and specialty contractors. A lot of construction projects were abandoned during the recession and so part of the bounce in construction is businesses and individuals picking back up old half-finished projects.
Business services and construction are looking strong in the coming years. “They provide services that are, maybe not critical, but very much needed by other businesses and people who are trying to even grow their homes,” Bierman says. “I don’t see these industries going anywhere. Maybe their growth rate won’t be as high as it has been, but I don’t think it will be a decline anytime soon.”

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