‘What are the hottest markets today?’ This is the common question asked by entrepreneurs who are on the lookout for business ideas that will give them the biggest return.
PowerHomeBiz:
‘Follow the money,’ they say. But where is the money? Entrepreneurs are always on the lookout for new opportunities. I’ve listed below 5 hot niche markets with significant growth potential and profitability. The list is by no means exhaustive or complete, as I eliminated those sectors that may require high of a start-up capital for a small or home-based entrepreneur. In these markets, anyone can launch a new business even with a capital of only a few thousand dollars.
1. Specialized Pet Products
Pets have become big business. American pet owners are spending more on their pets, from gourmet food products to clothes and accessories. Think about Paris Hilton with her Tinkerbell, or Britney Spears with her dog Bitbit. Pet owners (or as they like to call themselves, ‘pet parents’) pamper their pooches and kittens, as pets are increasingly seen as family members, not just animals.
The humanization of pets is one of the factors that stimulates the demand for pet products, and ensures that pets sit in the lap of luxury. Hence, gourmet pet food products, upscale pet grooming boutiques and stores, and even clothing retailers for pets have emerged to serve the demand from a predominantly upscale market. Becky Marshall has found a growing niche in gourmet frozen treats market for dogs with her Chilly-Dawgs.com business.
If you are thinking of going into the pet business, one clue as to the demographic of your target audience can be found in one of the direct mail lists provided by Direct Magazine. The magazine’s Canine and Kitty corps lists include more than 2.5 million dog owners and 1.1 million cat owners, the average age of which is 46 with a $61,233 income. Of those who buy from the Internet, the magazine’s list includes more than 1 million individuals with a $100,000 income.
2. 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 US, 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 5 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.
3. Changing Face of Baby Boomers
The baby boomers of today - those individuals born between 1946 and 1964 - are not the grandparents of yesteryears. They are not some demure grandmothers sitting on a rocking chair. Instead, they are active, busy and generally are doing a lot. Some are even going back to work, or starting new careers! If you are looking for a market to serve, there are tremendous opportunities in targeting the baby boomers. According to the Bureau of Census, the ‘baby boom’ propelled the largest percentage increases of any age group in the 1990-2000 decade.
A Merrill Lynch study entitled ‘The New Retirement Survey’ reveals how baby boomers will transform retirement. The study finds that boomers are not interested in pursuing a traditional retirement of leisure. Instead, the majority of boomers plan to keep working and earning in retirement, but will do so by cycling between periods of work and leisure, thus creating a new model of retirement. Richard Busch, nearing the age of retirement, even decided to change careers from journalism to pottery, and now operates a successful pottery business with his Glenfiddich Farm Pottery!
As such, services or products that cater to the changing perspective of baby boomers about retirement are growing. This is a large, growing, and under-served market. Opportunities are plenty for small businesses as these baby boomers are leaving and buying new (often smaller) homes, moving to senior communities or even deciding to stay put. Many of the baby boomers are looking for specialized, unique, even high-end services – which a small or even home-based business can provide. Some possible services include eco-tours, home remodeling, financial services, specialized spas and even kayaking.
Another profitable niche to consider is an apparel business targeting senior women. Women over the age of 50 are estimated to stand at about 50 million in the United States today - a baby boomer woman turns 50 every 14 seconds. As a woman ages, her spending power typically increases - but marketers’ interest in dressing her decreases! Only a few retailers are actively targeting this important market segment.
4. Lifestyle Changing Habits
Millions of consumers are changing their dietary and lifestyle habits. The change may be a result of an effort to lead a healthier and longer life, or a direct response to a health need. Some consumers are reducing their caffeine consumption, switching to organic foods, driving ecologically friendly vehicles or opting for recycled paper products. Other lifestyle changes may include people exercising more at home, which offers opportunities for businesses engaged in remodeling.
Small and home-based businesses may focus their businesses around the new interests, attitudes, opinions, and way of life of consumers. This consumer segment would welcome products that supported their alternative lifestyle, from mortgages on ecologically built and run houses to foods grown exclusively in organic gardens.
5. Growing Number of Obese People
There is an ‘obesity epidemic’ in America as more and more Americans, both young and old, are becoming overweight and obese. According to the US Center for Disease Control, about 65% of adult Americans are overweight or obese, while an estimated 16% of children and adolescents’ ages 6–19 years are also overweight.
With the sheer number and continued growth of this population segment, opportunities abound for businesses that may want to cater to the overweight or obese people. Some of these businesses may include products or services that can help them improve their quality of life and mobility. Businesses can also provide dietary products and services that may help this group control their food intake and lose weight. How about a service offering party packages consisting of healthy treats for an obese child to replace those yummy goodies traditionally part of birthday celebrations (e.g. cakes, ice cream, pizza, etc.)? Plus-sized apparel, not just for women but for children and men as well, also have a sizeable market potential.
There are many more possible businesses and good market niche for home businesses. The key is to observe closely, understand what people need and address those needs through quality products and services. Then you’ll hit the homerun!
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I love the stuff about pets being such a growing industry. That’s how I got started. I just combined my love of animals, and wanting to work on my own, and voila! Now I have a mobile pet grooming business of my own and I love it. I even show others how to get into it. If you’re a dog or pet lover, it’s something to try.