Whether you are looking for a market for your new business or a market to expand your existing business, here are some growing markets that you should consider:
1. Small Business
In the US alone, there are about 25 million small businesses today. Small businesses represent a large market that may be the only major source of growth over the next 10 to 15 years. They are a very good market for their fellow small businesses.
The problem with the small business market, however, is that they are hard to reach. Small businesses cut across industries, making it difficult to craft a single marketing message to reach them. More importantly, they often lack resources and have very limited time. Their buying priorities are different, and focus more on value. Many of these small businesses are also home-based — the sole proprietorships that, in most cases, have no employees and are run by an individual out of his or her home. In fact, according to the Bureau of Census’ Survey of Business Owners, almost half or 49 percent of the nation’s businesses are operated from home.
2. State and Local Governments
According to the Bureau of Economic Analysis, expenditures of state and local governments have grown from $411.9 billion in 1984 to $1,490.3 billion in 2004. It is expected to grow to $2,396.9 billion in 2014.
The local government is a big market that small businesses can tap. Small businesses can win thousands (if not millions) of dollars a year in local government contracts. The challenge lies, however, in knowing the ins and outs of selling to the government and understanding the government procurement process.
3. Growing Hispanic Market
One of the fastest growing consumer segments in the United States today is the Hispanic market. The number of Hispanic households is estimated to increase at a faster rate than any other group in the United States, continuing a demographic explosion that began several decades ago. Assuming that growth rates persist at their current phase, it is estimated that Hispanics will account for nearly one out of every five American residents by 2012. As such, opportunities abound for small businesses that consider implementing new approaches and strategies to target the Latin Americans.
However, it is important to note that this young, burgeoning market is extremely diverse. There are extensive demographic and economic differences among the Hispanic household population. Native-born Hispanics who have lived exclusively in the United States have different consumption and buying patterns than the immigrant Hispanics. US-born Hispanics speak English fluently and more likely to have grown accustomed to American tastes and living. The large influx of new immigrants, on the other hand, prefer information in Spanish and more likely to shop in stores where personnel can speak Spanish to them.
4. Gay Community
The gay and lesbian market may be offbeat for some, but it is one market that even the big boys are checking out. In fact, there are now about 175 Fortune 500 brands including American Airlines’ AAVacations.com, Volvo and American Express that advertise specifically to gay and lesbian audiences.
Big companies are no longer ignoring the power of the gay consumer because of this group’s tremendous buying power, which was estimated to be about $641 billion in 2006. While on average they do not earn more than other Americans, this market has also more disposable income (hence bigger buying power) because fewer are raising children. Setting aside any moral objections or issues about this group, GLBT is a market that small businesses can consider.
5. Burgeoning Consumer Debt
Americans today owe more money than they make. Consumer debt as of October 2006 is now at a record $2.378 trillion, according to data from the Federal Reserve Board . A May 2006 study by the Center for American Progress shows that household debt levels have reached 108.4 percent in 2005, exceeding household income by more than eight percent. Data from USCourts.gov show that there have been 1,112,542 bankruptcies as of fiscal year ending September 2006.
American families borrow more money to keep pace with the rising cost of living. The problem is compounded by the weakening of the labor market, flat wages and falling incomes while prices for critical ticket items such as health care, housing, college education have increased substantially.
The problem of growing debt presents many opportunities for small businesses. One such business that thrives in this situation is a home-based collection agency. There is also a growing need for credit counseling businesses as well as debt consolidation companies.
- Top 10 Growing Markets for Small Businesses (Part 2)
- Buying Your First Franchise
- Gathering Information For Your Business Plan
- Tips on Buying Liability Insurance for Your Small Business
- Seven Tax Tips for Home Businesses