Statistics show consumer buying is low, and many small businesses are facing sluggish sales. Beginning in March, the NFIB’s small business optimism index fell three months in a row after six months of rising. And, falling sales were cited as the number one business problem by one out of four business owners, particularly in the services sector. Only 23 percent of owners reported higher sales, while 36 percent reported lower sales. However, there are some small business sectors that are showing promise for upward-trending sales:
Small Luxuries: The small luxury category presents a surprising opportunity. Despite the sacrifices that had to be made at the height of the recession, some consumers seem ready to alleviate some of their economic stress with small treats – a boon for entrepreneurs seeking to open mid-priced restaurants, coffee bars or affordable beauty salons and spas:
- 32 percent of Americans say that they regularly dine at casual restaurants, with particular emphasis on simple fares, such as burgers, sandwiches and noodles prepared by classically trained chefs. Exotic cuisine and tasting menus are also popular.
- 42 percent are more than willing to have their hair professionally cut and colored, perhaps driven by the need to look professional on the interview circuit.
- 16 percent are unwilling to give up their daily cup of gourmet coffee, although they are showing an increasing willingness to stray from the big name coffee franchises to hip, friendly local coffee shops or coffee prepared at home from boutique coffee roasters.
Technology: The technology sector is one area that shows promise, as 23 percent of consumers say that technology items like smart phones, eReaders and tablets have become indispensable. There is ample opportunity for small businesses to bring to market products and services that make our lives easier, save us money and allow us to find time to network and maintain friendships through digital means.
- Time Savers: For executives looking to stay informed on industry trends and remain competitive by keeping up with current events, there are new services that bring news to their mobile devices and computers in real time, including web services that “crawl” the Internet to identify and send consumers stories on particular topics from mainstream news sources and lesser-known blogs.
- Money Savers: Despite the fact that consumers are spending 30 percent less than they did in 2008, “daily deal”-facilitated spending is expected to grow 138 percent this year and reach $3.9 billion by 2015, according to a recent study by BIA/Kelsey, a media consulting firm. Time-pressed consumers are particularly attracted to sites that aggregate deals from a variety of online sources; sophisticated online calculators; and sites that allow price negotiation, swapping, product comparisons and customer reviews.
- Relationship Builders: Some popular small businesses that are thriving in the social networking sector include: a site that helps people find like-minded travelling companions; a service that enables citizens to collaborate on solving community and civic issues; sites that allow consumers to look at reviews, tweets and photos of a product before committing to a purchase and GPS-fueled tools for meeting up with friends and potential dates.
Wellness Offerings: As Americans remain uncertain about how healthcare reform will impact accessibility to medical care, there has been an increasing emphasis on preventative healthcare. Small businesses offering products and services that allow consumers to be more proactive about their health are seeing increasing sales growth. In addition to personal trainers and specialized fitness centers, companies that provide healthful food options to vending machines, health clubs and schools have received a boost in recent months. Additionally, there are a growing number of online services that allow people to track weight loss, communicate with their physicians and network with people coping with similar disorders from arthritis to eczema.
Senior-Care Services: With 77,000,000 baby boomers (more than a quarter of the U.S. population) turning 65 this year, many entrepreneurs are creating or customizing small businesses for the senior sector. From remote monitoring services allowing caregivers to keep an eye on senior relatives to adventure travel and dating services, there are myriad possibilities to serve this increasingly vibrant and long-living market.
Sales trends in the sectors outlined above demonstrate industries that are still experiencing growth despite an uncertain economic landscape. Given the business opportunities in these areas, small business owners should analyze where they might fit into this promising picture.