For many years, one of the tenets of business building has been “find a niche and fill it.” And while that’s still wise advice, it raises the question, “Where do I find the niches?” You can approach that question in two ways. First, look for the holes in the established market. Can you do something better than is currently being done? The second approach to finding hidden opportunities is to identify the trends shaping the market and build a business around those trends.
Here are five top trends for budding entrepreneurs to explore.
America is aging on two fronts, both harboring great business opportunities. The first wave is the 65-plus set. Currently, there are approximately 35 million Americans age 65 or older. That number will double in the next 25 years because of a second wave of aging Americans—baby boomers, those of us born between 1946 and 1964. (See trend #2.) Wave one seniors (and their children) need senior-care services ranging from day care facilities, to in-home non-medical care, to remote services that monitor them from afar.
There’s a big demand for products designed for aging (and possibly arthritic) fingers. These include clothes and shoes that use Velcro, and household products that are functional (grip bars, raised toilets), yet stylish.
There are nearly 77 million baby boomers in this country, accounting for more than one quarter of the entire U.S. population. Although the first wave of boomers is rapidly approaching retirement age, many will not retire at 65 because of monetary and psychographic reasons. At the moment, boomers account for a big chunk of consumer spending; by next year, they are expected to account for half of all U.S. spending.
There are so many opportunities to serve this market. The tanking economy ate away a lot of their savings, making financial planning a vital need. With aging knees, many boomers will be looking (once the real estate market recovers) to move to smaller, one-level homes, increasing the need for scaled-down furniture. And once the boomers reach 65, don’t assume they will act like their parents did at that age—they won’t. The anti-aging industry already rakes in more than $70 billion annually, a number very likely climb through the next decade. And boomers are voracious users of the Internet, so whatever business you launch for them, make the Web is part of your strategy.
Since 1987, at least 3.8 million children were born each year in the U.S. (The technical definition of a “boom” year is one in which 4 million or more kids are born, but for trend purposes 3.8 million will suffice.) This means at least 20 years of babies—lots of babies (estimates are that 2008 and 2009 are both likely to top the 4 million mark) with lots of needs. And babies get older and need even more stuff. Hundreds of billions of dollars are spent each year on products and services for children. And a portion of that figure accounts for their actual spending. Tweens spend about $4 billion of their own money annually, while teens spend $125 billion a year. This year, roughly $85 billion will be spent on grooming products alone for kids aged eight to 18.
Obviously there’s a lot of opportunity here. Not just for products, but for services like day care, college planning and tutoring; services that can scarcely keep up with the numbers of consumers who need help.
Two things to remember in this market: Tweens and teens are environmentally conscious consumers, so market your products and services accordingly. Keep this acronym in mind: KGOY—Kids Getting Older Younger. In other words, products that used to appeal to 10-year-olds are now in high demand by 7- and 8-year-olds.
Brides and grooms already spend hundreds of billions of dollars every year. But these revenues are set to increase—exponentially. Remember what I said above—since 1987, around 4 million kids have been born each year in this county. The oldest of that set turn 22 this year. The average American woman gets married at 25. Do the math. In just a few years, and for at least the next 22 years after that, millions of weddings will start taking place. That translates to a lot of opportunities for wedding clothing, accessories, venues, restaurants and catering services, wedding planners, flower shops, honeymoon planners, travel and gifts. Add to this the growing number of states approving gay marriage (increasing the number of people who can and will get married), and you can see the potential.
As businesses large and small continue to lay off employees, more and more business services are being outsourced. There’s plenty of opportunity for entrepreneurs to step in and provide those services. While headhunting and full-time staffing demands are down, the demand for temporary employees is rising. Niche staffing services will grow, especially those that specialize in high-demand positions like nursing and other healthcare workers, tech workers, and sales personnel.
Other hot areas include green (and LEED) consultants, people who help businesses comply with environmental regulations and run recycling programs; social media experts who can help business build a marketing strategy based around Facebook, Twitter and whatever comes next; marketing and communications companies; digital storage services; and technology consultants.
Rieva Lesonsky is CEO of GrowBiz Media, www.growbizmedia.com, a content and consulting company that helps entrepreneurs start and grow their businesses.