Twelve projects have been identified by a recent IBIS World research study as the best businesses to start in 2012.
The projects have been chosen on the basis of projected revenue growth, forecast enterprise growth over five years, 2011 profit margins, the low barrier (or ease) in starting such business, and the amount of capital required.
According to Brian Bueno, economic research analyst at IBIS World, the stabilizing world economy and other conditions such as job growth, credit conditions, and consumer spending will put “more money in the pockets of consumers and various opportunities for new businesses.”
Relaxation or sleep promoting beverages, as opposed to energy drinks, tops the list of “start-up businesses” to engage in. This type of business had a profit margin of 6.8 per cent in 2011 as well as small capital requirement. The business grew 68.7 per cent in the last five years.
Examples of relaxation drinks are Chill, which contains Kava root, a treatment for anxiety, and Dream Water, which has melatonin, a sleep-inducing hormone.
Four in the list are internet or IT related: social network game development, internet publishing and broadcasting, online survey software, and e-commerce and online auctions.
The growing popularity of smart phones and tablets has led to increased demand for game-related applications as well as for internet publishing and broadcasting services. On the other hand, online survey software is expected to hit it big because businesses using social media marketing platforms would want to look for ways to track customers’ shopping habits. For its part, e-commerce and online auctions like E-bay and Amazon, still enjoy high revenue growth of about 9.6 per cent.
The others in the list are: corporate wellness service, wineries, human resources and benefits administration, economic and scientific consulting, street vendors, and ethnic supermarkets.
Wellness services providers are gaining in popularity among employers seeking to improve employee wellness and productivity. Projected growth for the industry is 8.7 per cent, with low capital costs and medium entry barrier.
Wineries are promising because of the rising per capita consumption of wine. The profit margin for wineries in 2011 was 7.6 percent.
Human resources and benefits administration services are now being increasingly outsourced by companies seeking to strengthen their human resources units. Expected revenue growth is 4.2 per cent over the next five years, and the average profit margin in 2011 was 9.7 percent.
Scientific and economic consulting industries are also on the rise, with medium entry barriers and low capital costs. They have the highest employment growths through to 2016.
Street vending is steadily on the rise even as fast food and food service industries are declining. IBIS World explains, “the potential for new and successful startups is particularly high in…street vendors. During the past few years, the industry surged ahead because of new consumer demand for unique and gourmet food trucks.” The industry is projected to achieve average annual revenue growth of 3.7 percent over the next five years to 2016.
Ethnic supermarkets, like street vendors, are a niche market with a lot of projected growth. IBIS World predicts that these industries will continue to grow “with changing consumer tastes and demographic trends,” and even though their 2011 profit margin was only 2.8 percent, another 365 markets are expected to open in 2012.