Best Business Opportunities
For the past few months, your Small Business Information Guide, has extensively researched the best business opportunities for the new year. This year's top small business opportunities cover different markets from the sport compact performance market and music therapy to data storage.
These best business opportunities represent markets at an early age with huge profit potential to businesses with established markets and lower customer education costs.
This year's picks outlines each business opportunity along with the driving forces, associated risks of entering that particular business and resource websites.
Selecting a business opportunity is part timing. Being in the right place at the right time in a booming industry can ease the start-up pains accompanying the launch of a new venture. So take a peek at what's hot in business today.
Business Opportunity: Hot Sales In Hot Rod Accessories
A revival of the muscle car days of past have fueled the rise of the sport compact performance market. Foreign cars such as Honda's are under going the modification craze with neon-lighting, high-end audio, and fancy fins. This market is served by 3 lines of business covering engine performance upgrades, exterior modifications, and interior improvements.
One such company to capitalize on this hot tread is StreetGlow. Founded by Jack Panzarella with $3,000 in 1991, Street Glow has grown by 733% to over $22 million in sales revenue.
According to Specialty Equipment Market Association (SEMA), this niche market had 60% growth in 2002. Sales in this specialty market have gone from $295 million in 1997, to $2.4 billion today.
Driving Force: The youth culture has embraced the concept of personalizing their vehicles spurred on by the popularity of the movie "The Fast and the Furious".
These new auto enthusiasts will continue to grow with a rising youth market just beginning to get their drivers' licenses.
Risks: Appealing to a youth market, requires the ability to stay on top of trends. Overbuying on one product category that fizzles can balloon your inventory costs. Short product life cycles for manufacturers can hinder production capabilities. This business opportunity requires a close contact with understanding the wants of the customer base.
Business Opportunity: Information Explosion Fuels Data Storage Growth
One of the biggest outputs of the Internet age is millions of people and companies have become content producers. Data production continues to grow, making storage and management of information big business. Big business to corporate giants like IBM or Hewlett-Packard, but also for small entrepreneurial companies such as IPR International with their DataGuardian service.
Driving Force: Thank companies like Enron for the changes in corporate environment evoking the Sarbanes-Oxley Act. This act makes data storage, back-up and recovery, a big issue for companies of all sizes. Another driving force is the fact that we are an information society producing high outputs of data yearly.
Data storage is here to stay.
Risks: Out of all types of business opportunities, technology is associated with the highest risks due to obsolescence and rapid changes. Your odds of success are greater pursuing boring business like dry cleaning as opposed to losing your "shirt" on tech ventures.
A risk reduction approach may be offering consulting to the industry or serving the storage needs of the Small Medium Business (SMB) market instead of direct participation. A report by Access Markets International-Partners Inc., estimates SMB storage sales will grow at a compounded rate of 43% versus 5% for large enterprises. Remember, the gold seekers of the gold era most often did not get rich, it was the tool and denim companies such as Levi's that made it big.
Business Opportunity: Music Education Budget Cuts Creates Opportunity
Many business opportunities often arise from times of crisis or regulatory changes.
Witness the cuts in funding to music programs in schools throughout the U.S. All over America, schools are facing budget cuts to non-academic programs such as music. According to the The American Music Conference, "...up to 28 million American students do not receive an adequate music education."
This crisis has created a growing market for childhood music education companies, like Kindermusik International and Musikgarten. And for the growing 5,000 membership of certified music therapists at the American Music Therapy Association.
Driving Forces: The media frenzy and public interest around the "Mozart Effect" revealing how higher brain function is enhanced by music at an early age has left a positive impression of music on parents. Along with the recent music education cuts in school districts, the music therapy business receives a high note.
Risks: The cut backs in funding to school music programs may strike a chord in parents to push for change. Grass-roots organization, the Music Education Coalition, has created a website called SupportMusic.com, for advocates to fight the funding cuts. It's best to diversify marketing to areas like health-related music therapy.
Business Opportunity: Unlimited Demand for In-Home Care
The non-medical in-home care business offers an opportunity to provide support and care to people in need. "More than one quarter (26.6%) of the adult population has provided care for a chronically ill, disabled or aged family member or friend during the past year. Based on current census data, that translates into more than 50 million people." (National Family Caregivers Association)
Taking care of the chronically ill or a senior citizen can cover errand running, chores, companionship, and meal preparation. No single company has a foothold on this highly fragmented market. Two fast growing businesses in the home care market to emerge are Home Helpers and Comfort Keepers. These two franchisers have grown ten fold in the last 3 years; expanding from 50 to over 560 locations.
Driving Force: Many people prefer to stay at home whether an aging parent or someone undergoing illness. Additionally, most consumers have more time than money. Home care support will continue to expand.
Risks: The risk in a business opportunity full of unlimited demand is the ability to supply the service. In the home care business, the service is delivered by people. Finding and retaining home care staff will be the critical success factor for this industry.
Business Opportunity: Huge Gap In Pet Insurance
A recent winner of the annual Wharton School of Business Plan Competition was not a technology plan or a biotech venture, but a simple plan on the pet insurance market. What the judges and plan writers saw as an impressive business opportunity was the fact that only 1% of the 136 million cat and dog owners in the U.S. have pet insurance.
Pet insurance is more commonly used in countries such as the United Kingdom, where over 12% of pet owners can buy insurance from over 60 different companies. In the U.S. there are only 5 main players: PetHealth, Veterinary Pet Insurance, Pet Protect, Pet Assure, and Hartville Group.
Pet insurance has existed for decades. However, a change in market strategy has finally started to penetrate this market as pet insurance companies move from having veterinarians sell insurance to advertising insurance directly to consumers.
Driving Force: The biggest factor in this business opportunity is simply love. Over 80% of pet owners consider their pets as family members, according to the American Animal Hospital Association. This concern to take care of one's pet coupled with advancements in animal medicine and technology will provide a long future for this industry.
Risks: The attractiveness of this business opportunity is the regular premiums ranging from $100 to $500 a year per policyholder. The biggest challenge for new entrants and industry veterans are the costs associated with educating the public on pet insurance being an affordable solution to rising pet health costs. Developing effective customer acquisition methods will be one key to success.