If you want to start a business this year, but aren’t sure what type of business to start, a new survey from Guidant Financial and LendingClub has some ideas—as well as reassurance that you’re not alone. According to The State of U.S. Small Business In 2018, the number-one reason people start their own businesses is because they’re “ready to be my own boss”—not necessarily because they have a specific business idea.
So what types of businesses are currently hot for entrepreneurs? The top five industries where small businesses are represented are:
1. Business services—11%
2. Food/restaurant businesses—11%
3. Health/beauty/fitness—10%
4. Retail—7%
5. Home services—5% (This category bumped Automotive services from last year’s No. 5 spot.)
Within those five categories, however, some industries are growing much faster than others. The fastest-growing areas are:
Health, fitness and beauty
2018 saw a sizable increase in health, beauty, and fitness businesses as the number of wellness spas, salons, and gyms grew by 34%. Here are some ideas to inspire you:
Between 2015 and 2017 the global wellness industry grew nearly twice as fast as overall global economic growth (3.6%). According to the IHRSA, the global health club industry alone generated $87.2 billion.
Fitness clubs aren’t the only way to capitalize on the health and wellness trend. You could also start a business that incorporates smart home technology to help people achieve their fitness, health, and wellness goals. If you’re an inventor at heart, what about developing a fitness product such as exercise equipment or clothing? (Get some tips about how to develop a fitness product that people will actually buy.)
From millennials to baby boomers, Americans are paying more attention to wellness than ever. Wellness encompasses physical, mental, and emotional wellness, giving rise to one-stop wellness centers that incorporate health, fitness, and even medical care. These are a natural for busy consumers who want to simplify their lives.
Within the beauty category, a couple of trends stand out. Skin care is the most profitable product category in beauty: by 2019, its market value is projected to grow by $20.1 billion compared to 2014. Skin care for men is a growing category, especially popular among younger men.
Whether it’s cosmetics, skin care, or hair care, natural beauty is hot, with 45% of women naming it a top trend. Consumers are also embracing their own natural beauty, and companies are developing products to enhance the beauty and fit the needs of multicultural consumers. Market research firm Mintel says “trend-driven, multicultural women” are propelling the growth of the U.S. beauty industry, and identifies custom-blended beauty products as an especially promising area.
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Food/restaurant businesses
Restaurants are perennially popular among startup business owners, but especially so today. Last year the number of food/restaurant businesses grew by 14%, according to Guidant/LendingClub’s report.
Restaurants are notorious for having a high failure rate, so it’s important to plan carefully and know what you’re doing. (Check out these tips for opening a restaurant to get started.)