Aspiring entrepreneurs might find it interesting to know that the most profitable industries for small businesses down under at the moment include app development for smart phones, Internet dating and decorating and painting. A new report has revealed which businesses have the biggest profit margins , or their earnings as a ratio of their revenue, as well as those businesses that have the fewest barriers to entry (which means they do not require much by way of resources or capital investment to launch).
Now, while the following business field may look profitable, they are far from perfect and each one obviously comes with its own element of risk. Bear in mind that the experts say it is not necessarily as easy as it appears as a number of industries may seem appealing initially and have low barriers to entry. But if it is easy to penetrate competition is likely to heat up quite quickly, making it more difficult to stay in the game. If you want to get ahead, they say, you need to develop a competitive edge and find a gap in the market that no one else is filling. Smart business owners are making use of digital technology to streamline their business operations and drive innovation in spheres like gaming and smart phone app development. They are also driving running costs down by operating a virtual office and allowing employees to maintain work life balance. So if you’re an entrepreneur looking for an inspiration boost, keep lower overheads in mind and read on for some ideas on up and coming market niches.
1) A Match Made In Heaven? Internet Dating For Small Business
The ease with which a website can be set up makes internet dating a relatively easy market to enter and the number of people using the net for dating makes it quite easy to launch. However, as time goes on and the competition increases it can become more difficult to maintain. According to the report, profit margins stand at 21% and are on the increase as online dating is being taken up by more consumers.
2) Technology: App Development for Smart Phones
With technological innovation being central to entering the market, this is one industry that can be entered with relative ease. Furthermore, regulations are not very stringent and it requires nominal start-up financing. These factors combined mean that smart phone app development has a profit margin of 50% of its revenue. Profit margins have benefited from its rapid rate of growth and only look to increase even further.
3) Going Into Property Rentals: Flats and Holiday Homes
Despite the initial cost of buying the property, the short term rental market is considered to have moderate to low barriers to entry. Business owners may expect an average profit margin of around 18.3%.
4) Painting and Decorating
With a low market share concentration and requiring only a small amount of capital to get going, the painting and decorating industry is also lightly moderated. There are a number of owner-operated businesses in this sector, which have low running costs as a result. Owner-operated businesses in this sector may expect profit margins of around 22%.
5) Grey Gaming
And, perhaps the most surprising of all is the result of a new study that found older Australians are becoming more interested in video games than younger citizens. This phenomenon has been coined “grey gaming” and refers to gamers over the age of 40, who now comprise the largest proportion of active gamers on the market. People over the age of 51 now constitute a fifth of the local gaming demographic. The survey took feedback from 1220 Australian households to try to come to an understanding of Australian gaming culture.
Gamers over the age of 51 said they used the hobby to keep their minds active, to learn new things and to challenge themselves. On the other side of the spectrum, gamers aged between 16 and 25 played video games for excitement and to curb boredom. Interestingly, 70% of the parents involved in the survey said they played video games with their kids for educational purposes. The study found that 32 was the average player age and that Aussies prefer playing on a console more than any other device.
I actually started a tinting business because of how low the barriers to entry were. A recent article in WSJ mentioned how the last 5 years the Dow Index has changed more than the fifty years prior. It will be interesting to see how these new businesses fare against old empires.