The criteria and ranking method behind the 2010 Best Industries to Start and Grow a Business
To help identify the most promising industries for start-ups, a team of Inc. reporters hit the phones and scoured the data. We first scouted out industries with great growth potential and solid sales figures from recent years before culling out any industry with a highly prohibitive barrier to entry, be it cost, skill set, or market saturation. For instance, public school bus services made our initial list. Though increased outsourcing by school boards opens up a market that's recession proof, amassing a fleet of vehicles would cost millions. Pair that with rising fuel costs, and the industry doesn't look quite so promising for new ventures.
We compiled data from three private research companies. Sageworks Inc., which does financial analysis of privately held companies, gave us 2009 sales percentage increase numbers for the most growing fields. The list helped us identify growth trends, such as beverage manufacturing (8.2 percent), bakeries (3.8 percent), and hobby store sales (3.2 percent). AnythingResearch.com, which provides industry market research analysis, reports, and publications, handed Inc. a list of its top eight fastest-growing industries that are hospitable to small businesses. From there, we looked at more detailed reports from IBISWorld, which creates industry market research analysis, reports, and publications. IBISWorld provided detailed past industry growth percentages, revenue forecasts for the next five years, employment growth, profit margin averages, and industry competition ratings.
Other numbers we took into account when ranking our list included employment figures and projections from the Bureau of Labor Statistics, individual industry sources, and trade publications. The latter two came in particularly handy when analyzing emerging industries such as marijuana retail and app design.
In addition to this host of numbers and industry analysis, we talked with sources from inside these industries and out. You will see we haven't associated number ranks with each of our 2010 top industries. Instead, the industries we isolated are roughly ranked from best bets (environmental consulting) to slightly more risky ventures (blood banks and irrigation systems). Some of the industries with high growth potential, such as ferryboat and inland water transit, also have higher barriers to entry. So, there's a balance struck that will make it a worthwhile venture to someone willing to sink in millions but not to a bootstrapping college student, who might be better off starting a bakery or carving out a niche in the exam preparation field.