FORWARD VIEW: We picked the 20 biggest growth trends all entrepreneurs need to watch in 2020, and why they matter
- Entrepreneurs and business owners look at things a little differently than investors do.
- Regardless of your particular industry or geography, some trends cut across sectors and can have a significant influence on your business plan.
- Ahead of 2020, Business Insider is looking at some of the major themes and ideas that will shape the new year (and beyond) for bootstrappers and innovators of all kinds.
- It would be impossible to capture everything, but this unranked list represents 20 trends that BI has deemed most relevant for entrepreneurs and small businesses.
- Visit BI Prime for more stories.
Entrepreneurs and small businesses have different concerns and priorities than investors and publicly traded companies.
There are certainly areas of overlap, but what works for Wall Street isn't always the same as what works on Main Street.
Our holistic approach is informed by original research, reporting, and analysis from across BI and our newly formed small business desk.
A comprehensive list of trends would be impossible, so we distilled it into the 20 ideas we find most important and exciting for entrepreneurs and business owners.
We lead with health and wellness (our top pick for small business categories in 2020), but the items here are unranked.
Here are our picks of the top 20 trends for entrepreneurs to watch in 2020.
Health and wellness
Examples: Fitness, physical therapists, mental health, home health aides, feminine products
Why it matters: As we wrote in our roundup of the best categories for million-dollar businesses "You don't need to be a medical doctor to help people live better, healthier lives."
Health services and benefits
Examples: Doctors, dentists, clinicians, benefits providers
Why it matters: Physician and clinical services spending in the US is expected to increase 5.4% per year on average, and an aging population is driving an increase in demand for services.
Plus, employers and other business owners are finding it necessary to offer health benefits to remain competitive in a tight labor market.
Health food without compromise
Examples: Vegan, lactose-free, non-alcoholic
Two thirds of the world population is lactose intolerant and lactose intolerance is on the rise in the US, leading to a growing market for dairy alternatives in food and beverages.
Whether consumers are avoiding lactose or alcohol, they still want something that is just as enjoyable as the original product, and grocery shelves are only beginning to see new, equally satisfying offerings.
Moving away from meat
Examples: Plant-based proteins, lab-grown meat alternatives
Why it matters: Beyond the individual health considerations, eco-conscious consumers are driving a boom in demand for more sustainable forms of protein.
The market for meat alternatives could be worth $140 billion by 2029, Barclays estimates, and Gen-Z could drive global sales of plant-based meat to top $5.2 billion by 2020.
Brands like Impossible and Beyond Meat captured the attention of Wall Street, but the market is far from saturated. And you don't necessarily have to invent a new product. Restaurant owners shouldn't let themselves get lapped by the likes of Burger King and Dunkin Donuts in offering diners more choices from the grill.
Examples: Legalized marijuana, hemp, CBD
Why it matters: Investors went wild over cannabis in 2019, but continuing US federal restrictions limit the options for big businesses.
But as state and local regulations continue to shift toward legalization, the once black-market industry presents significant opportunity for small business. The numbers are hard to calculate, but CBD industry in the US alone could become a $16 billion industry by 2025, according to an analysis from the investment bank, Cowen.
How the trends in cannabis will play out remain to be seen, and permitting and capital constraints are substantial, but many growers, processors, and sellers are seeing success with strategies that focus on local markets and organic growth.
Examples: Solar, wind, batteries
Why it matters: Unit costs for alternative energy are on-par with or lower than the cost of fossil fuels, and more homes and businesses are investing in their own systems.
Jobs in solar and wind are expected to grow at rates of 63% and 57% in the coming decade, and the sector is expanding without the kind of federal subsidies that the fossil fuel industry enjoys.
Battery technologies will play a major role in this transition, since sun and wind aren't always available, and different regions of the country will naturally emphasize different technologies.
Reaching new geographies
Examples: Innovation hubs, venture capital, heartland cities and towns
Why it matters: Sky-high rents, living costs, and commuting times have made it harder to live and work in cities like New York and San Francisco.
Companies and individuals are electing to leave the coasts, and some states and cities are offering bonus payments for people to move there.
Although the vast majority of venture funding is concentrated in just a few cities, new investing strategies are specifically targeting the heartland.
With anchor institutions like research universities and large companies, smaller cities around the US are becoming hubs of innovation for particular sectors of the economy, and engines for middle class growth.
Examples: Tax law, enterprise zones, Community Reinvestment Act
Why it matters: The Opportunity Zone program that began with the 2017 tax overhaul is the latest iteration of an approach to local development that has been around for a long time.
But this time, the bipartisan program is bigger than ever, and has the potential to reshape communities all over the country by bringing a Silicon Valley ethos to more than 9,000 distressed census tracts.
Rethinking business structure
Examples: Partnerships, S-corps, B-corps, networks
Why it matters: Another feature of the 2017 tax overhaul was the introduction of new rules for different business structures. For business owners, it may be smart to review how your current structure is treated under the law.
In addition, as more companies like Uber and Lyft come under the scrutiny of state and local regulators, the definition of independent contractor is liable to change and could have broad reaching implications for you or your business.
Courtesy We Are Rosie
Courtesy We Are Rosie
Adapting to the future of work
Examples: Gig economy, freelancer networks, remote work
Why it matters: People aren't just leaving cities, workers are leaving salaried jobs in search of more flexible hours and better work-life balance, even at the cost of a pay-cut.
Companies that embrace freelancers and remote workers can access a wider talent pool than those that require physical presence from 9 to 5. According to a survey by Deloitte, half of millennial and Gen Z respondents said they would leave their job within two years if they had a choice, up from 38% in 2017.
These trends present and opportunity for business owners who need additional work, and for entrepreneurs who can creatively provide those services.
Examples: B2B, government contracting
Why it matters: Some of the most successful businesses aren't household names. In fact they may only have a handful of clients.
But if those clients are large enough - think US government or Fortune 500 company - your business may focus on performing one niche service well, such as event production or graphic design.
Some services depend on scale to be effective, but others are more individually tailored, and being smaller in size could have the advantage of being more nimble and responsive.
Examples: Educational tutoring, daycare, pet care, personal shopping
Why it matters: Not only to businesses need help with day-to-day needs, individuals and families need support with their busy lives.
New business ideas can arise from personal passion. Just a few years ago, hardly anyone knew they needed a home organizing expert, but Marie Kondo has turned "de-cluttering" into an industry.
Examples: Sneakers, upcycling, vintage
Why it matters: With so many new consumer goods entering the market, the secondary market has become an interesting opportunity.
Footwear enthusiasts have turned a hobby into a business, that some saying sneakers are "the new gold."
Online exchanges like StockX and other platforms like Poshmark are evidence that for some products, leaving the store is only made its first step in a long journey in the market.
Examples: Brick-and-mortar, e-commerce, experiences
Why it matters: Retailers had a tough year in 2019, with more than 9,300 stores closing. But sites like Amazon, Shopify, Alibaba, and Faire are rolling out more tools for retailers to reach more customers with unique products.
For all the commotion surrounding e-commerce, the vast majority of retail still happens in physical stores, and shoppers are increasingly choosing to buy online and pick up in person.
The right approach may depend on a blend of online and in-store strategies, as customers are looking for more personalized shopping experiences.
Housing and hospitality
Examples: Homes, hotels, shared spaces
Why it matters: We're grouping the residential and hospitality industries together because they ultimately fulfill the common human need for shelter.
The traditional housing market is undergoing radical change, but people still need a place where they can rest, recharge, and feel welcome.
Large suburban homes may no longer be the place for that, and the line between homes and hotels seems to be blurring with trends in tiny homes, co-living spaces, and travel options like Wanderstay and Airbnb.
This will require physical space where businesses can build, design, operate, and serve one of our most fundamental human needs.
Mobility for people and things
Examples: Last-mile transportation, alternative modes, delivery services
Why it matters: Just as people need to have places where they can settle down, they also need ways to get themselves - and their stuff - there too.
Big companies are generally better suited to tackle the national-scale challenges in mobility, but many gaps remain to be filled at a smaller local scale.
Small businesses can partner with mega firms to develop better logistics strategies and transportation modes that lead to improved solutions for this growing demand.
Harnessing big data
Examples: Artificial intelligence, virtual reality, analytics
Why it matters: The proliferation of sensors, trackers, and other data sources is expected to generate 175 zettabytes of data stored by 2025, according to research from IDC.
Combined with initiatives from tech giants that offer unprecedented new computational tools, businesses that help companies and individuals harness the power of big data could be quite profitable.
The future of money
Examples: FinTech, alternative finance, cryptocurrencies
Why it matters: Traditional forms of lending and credit have been insufficient for many individuals and small businesses.
Cash flow is one of the most commonly cited reasons that small businesses fail, and the list of new sources of alternative capital is growing fast.
Financial institutions and tech companies are racing to offer credit to small businesses, not to mention the new forms of blockchain and cryptocurrencies.
These sources of capital could be a lifeline for your business when cash is tight, but the regulations and protections are nowhere near as robust as they are with traditional banking. Just make sure to read the fine print and proceed with caution.
Dominick Reuter/Business Insider
Dominick Reuter/Business Insider
Examples: Bootstrapping, self-finance, debt-finance
Why it matters: 2019 was supposed to be a banner year for IPOs, with billion-dollar unicorns like WeWork charging to the public market on a wave of venture capital. Things didn't exactly go as investors expected.
Given the lackluster performance of these startups, there could be a greater emphasis on business fundamentals and sustainable growth.
Equity investors may be more wary of pitches with hockey-stick growth projections, and entrepreneurs may find bootstrapping more appealing than selling ownership stakes of their companies.
Examples: Inclusivity, access to capital, opportunities for advancement
Why it matters: According to research from the Federal Reserve, businesses profit when they are located in places with greater equality of opportunity.
Other reporting and research shows that women- and minority-owned businesses are an important indicator of the overall health of the economy, and women are more likely to identify a market need and start a company.
Diversity goes beyond race and gender. Several reports have shown that individuals with developmental differences match neurotypical workers' performance in many cases, and sometimes outperform them.
When businesses fail to appreciate diversity, they miss out.
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