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POWER RANKING: The 10 best

industries in 2020 for entrepreneurs to
start million-dollar businesses despite
the pandemic
Dominick Reuter and JenniferOrtakales
 
Mar28,2020,12:19 AM

As long as businesses are growing and expanding, there will be a high demand for management
consultants. Hinterhaus Productions/Getty Images
 The coronavirus pandemic and its economic consequences are radically
reshaping the business landscape in real-time.
 If you're starting a small business in 2020, now is an extraordinarily risky
time, but there are potential opportunities for entrepreneurs even in this period of
uncertainty.
 Business Insider evaluated top industries based on revenue, employment,
cost of entry, and competition to find out which are the best bets for small
businesses to grow.  
 Healthcare businesses remain at the top of our list after revising in light of
the coronavirus, while restaurants and retail fell to the bottom.
 Click here for more BI Prime content.

The coronavirus pandemic and its economic consequences are radically reshaping the
business landscape in real-time. When we originally drafted this list, the eventual
impact of COVID-19 was not fully understood.

It still isn't.

But some changes are certain to take hold, regardless of the future direction of this
crisis, and we think that merits a re-ranking of our original list.

There are potential opportunities for entrepreneurs starting a small business in 2020,

even in this period of uncertainty.

Women could be the trailblazers in many of these growth markets. According to a recent
report, women are more likely than business owners in general to identify a need within
a market and start a company to fill it.
Business Insider evaluated top industries based on revenue, business size, capital
requirements, and economic forecasts to find out which are the best bets for small
businesses to grow.

Using NAICS data on the size and revenues of US businesses, we selected industries

with the highest number of businesses making over a million dollars in sales, favoring
businesses with fewer than 100 employees.

We excluded all nonprofits, as well as industries with enormous capital requirements or

low margins. For the remaining set, we considered where the US economy is in the
business cycle, and considered how financial market performance and employment
forecasts would impact each type of business.

Lastly, we gathered the relevant industries into the sub-sector groups for ranking in
terms of our best bet on which small businesses will have a profitable year in 2020.

Unsurprisingly, healthcare businesses remain at the top of our list after revising in light
of the coronavirus, while restaurants and retail fell to the bottom.

Worth noting is the improved position of trade contractors, who we foresee benefitting
from increased demand as businesses use federal stimulus funds to reinvest in their
property, plant, and equipment needs.

Continue reading to see the 10 industries seeing major growth opportunities for small
businesses to thrive.

10. Restaurants (down from #9)

Congresswoman Alexandria Ocasio-Cortez, who famously was a bartender before being elected to
Congress, takes orders at a Queens restaurant event in support of a full minimum wage for
waitstaff. Shannon Stapleton/Reuters

Sub categories: Franchises, full-service

Full-service restaurants are a competitive market, and rising labor costs add pressure to
anyone looking to start their own. And there's growing opportunity in fast food
franchises, but some require a lot of capital to start. 

Food service is by no means an easy business, but people will always need to eat, and
many are too busy to prepare their own meals. In 2019, the National Restaurant
Association says diners spent more than $863 billion in the US.

The rise of delivery service and technology integration could further open up
restaurants' customer base and service efficiency. 
9. Specialty retailers (down from #6)

Sales data shows that consumers love to buy online and pick-up in stores. Plus, most say they plan to
grab something else during their visit. Mark Makela/Reuters

Sub categories: E-commerce and brick-and-mortars

E-commerce has only expanded over the last decade, but brick-and-mortar stores still
make up 90% of retail revenue, and sales of consumer durable goods (like toothpaste
and toilet paper) tend to remain strong regardless of the business cycle.

Direct-to-consumer brands that were born online, like Casper and Warby Parker, are
opening physical stores, and Amazon rolled out its AmazonGo cashierless grocery
stores. Meanwhile, a survey from the small business retail platform Faire.com
found 72% of US consumers prefer giving and receiving gifts bought locally.

Retailers of all types are shifting to convenience and experience-based models, which
can call for a hybrid approach of online and in-store strategies.

8. Transportation and logistics (up from #10)

The drone tech company pictured here now focuses on other sectors, but many others are still focused
on deliveries. Brian Snyder/Reuters

Sub categories: Last-mile delivery, personal transportation.

Getting people and their stuff from place to place is a challenge that isn't going away.
Indeed, shipping and delivery is one of the most important B2B sectors in America, as it
supports 50,800 jobs in the US.

Amid the severe disruption taking place, there is both risk and opportunity. The $800-
billion trucking industry is taking a painful hit, but transportation is more than big-rigs,
and new technologies are improving efficiency and speed throughout the industry.

High saturation in e-commerce and customer expectations of lighting-speed delivery

add another layer of complexity to how the industry will evolve. 

7. B2B operations support (unchanged)

Business-facing small businesses provide many of the products and services that keep the economy
moving. GettyImages 478065661 (1)
Sub categories: Tele- and video-conferencing, event planning, printing, and much
more 

This is somewhat of a catch-all category for businesses that provide the services and
products that other businesses (and government agencies) need on a daily basis.
The industry's performance has been mixed in the past year, but we see no reason why
small businesses couldn't use nimbleness and creativity to outperform publicly traded
competitors.

These corporate and government contractors may not be household name brands, but
they help other companies focus their efforts and resources on their core business.

6. Programmers and developers (down from #4)

The proliferation of technologies and data means more opportunities to design software to harness
their powers. Steve Marcus/Reuters

Sub categories: App development, programming, etc

Programming and app development span across all industries, so they'll continue to see
steady growth, especially in the so-called software-as-service space. With projections
of 175 zettabytes of data stored by 2025 and new computing power at our fingertips,
helping companies harness it could be a profitable business.

5. Trade contractors (up from #8)

A repair tech services equipment at a commercial refrigeration manufacturer. Skilled trades are in high
demand, but supply is limited. Associated Press

Sub categories: Electric, plumbing, site prep, roofing, etc. 

Residential construction appears to be cooling off, but the need for skilled crafts-
persons will be necessary for new projects and renovations alike. Growth is expected to
exceed 8% per year in the coming decade, with solar and wind jobs growing the
fastest of all (63% and 57%, respectively).

4. Certified professionals (down from #3)

Professions that require education and credentialing have a lot of high-earning small businesses. Chris
Wattie/Reuters
Sub categories: Lawyers, architects, engineers, and accountants

Otherwise known as the the Professional, Scientific, and Technical Services sector, this
category has some of the highest numbers of high-earning small businesses (as you
might expect, given the education and credentialing required).

Of course, you can't become a lawyer or architect overnight, but there is steady demand
for these skills that could be rewarding for a private practitioner. This industry sees high
employment rates (2.5% vs 3.5% unemployed) and above-average earnings year after
year.

3. Management consultants (up from #5)

Businesses of all types are looking for experts to help them solve difficult problems. Hero
Images/Getty Images

Sub categories: Strategy, operations, finance, compliance, diversity and inclusion,

ESG, etc.

Management consulting is the industry for experts who can tell businesses how to run
more efficiently. As long as businesses are growing and expanding, there will be a high
demand for consultants, both individuals and firms. 

IBISWorld market research shows the consultancy industry made $259 billion in

2019 and is is growing at 3.4% per year.  

Consulting is a natural opportunity for corporate executives looking to go independent

and leverage their career experience outside their employment.

2. Health and wellness (down from #1)

Helping others live better lives is good business. Aaron Josefczyk/Reuters

Sub categories: Home health aides, physical trainers, fitness gyms, individual and
family services

Demand for health services is growing rapidly, whether through home health aides,
wellness brands, or prescription delivery companies. According to the Bureau of Labor
statistics, 8 of the top 12 growing job categories are health-related. 

We chose this category as a leader because of its large and growing demand and its
resiliency against economic downturns. As mentioned previously, US health spending is
expected to reach $6 trillion by 2027, and the Global Wellness Institute says the
industry is worth $4.5 trillion worldwide.

Additionally, the diverse opportunities to serve a growing need means some niche
categories have lower barriers to entry. Some of the most exciting businesses we've
reported on have some connection to improving health outcomes, and it's clear the
addressable market is huge.

You don't need to be a medical doctor to help people live better, healthier lives.

1. Health professionals (up from #2)

Healthcare is one of the most economically resilient sectors of the economy. Jim Young/Reuters

Sub categories: Private practice doctors and dentists

In the same vein as above, private or group practice health providers see some of the
highest earnings for their size, with more than 34,000 medical and dental firms
reporting between $1 million and $5 million in revenue.

US health spending is expected to reach $6 trillion by 2027, and physician and clinical
services spending is expected to increase 5.4% per year on average. 

We break doctors and dentists out separately from other licensed professionals because
healthcare is one of the most resilient sectors of the economy this late in the business
cycle. If you have the education, credentials, and experience, 2020 could be a good year
to open your own offices.

SEE ALSO: POWER RANKING: The 10 best US states for entrepreneurs

to start million-dollar businesses in 2020

SEE ALSO: The 6 best industries for small businesses to thrive in, from
food trucks to health to micromobility

SEE ALSO: Why you need to know the government's complex definition

of 'small business,' and how getting it right is your best shot at winning
contracts, support, and partnerships

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