Hint: A new report predicts relaxation drinks will have the highest revenue growth over the next five years.
Starting a business? Try a drink to relax, suggests new research.
The category of business forecasted to have the largest five-year revenue growth–24.8 percent annually–is relaxation beverages, says industry research publisher IBISWorld. The Los Angeles-based publisher examined 700 market segments.
That's not hard alcohol, mind you, although wines also make the top 10 list of types businesses to start. Instead it's the flip side of energy drinks: those that promote sleep or relaxation, such as Dream Water. The category had a 2011 profit margin of 6.8 percent, according to IBISWorld's figures.
Relaxation drinks are also a good target for start-ups because the category has both low barriers to entry and low capital requirements.
Wineries, for the record, have a predicted five-year annual revenue growth of 4.9 percent. The category is considered hot because of the rising per-capita consumption of wine in the U.S. and the increased consumption of American wines abroad.
Online gaming development is also a good target for entrepreneurs—it's just behind relaxation drinks in terms of projected five-year revenue growth at 24.4 percent annually. "This same industry continues to foster opportunities for growth, particularly as games continue to shift to smartphone applications…and new firms with new ideas capable of capturing audiences may run into the same fortune as major company Zynga," observes the report.
You'll have competition and more than just from Zynga. IBISWorld predicts some 250 social network game development companies will enter the industry this year.
A distant third place on the predicted average annual revenue growth is an relatively old industry: Internet publishing and broadcasting. IBISWorld is forecasting an average annual revenue growth of 9.9 percent, thanks to smartphones and tablets, which will increase opportunities for start-ups and smaller publishers. One downside to this is that capital requirements are high, says the company. Profit margins in 2011 were 17 percent.
Other industries on IBISWorld's top 10 list for projected annual revenue growth: corporate wellness services (9.8 percent), online survey software (9.6 percent), ecommerce and online auctions (also 9.6 percent), wineries (4.9 percent), human resources and benefits administration (4.2 percent), scientific and economic consulting (3.8 percent), and street vendors (3.7 percent). The last one—food trucks—averaged a whopping 23 percent profit margin.
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