Did you know that small businesses make up 99.9% of all U.S. firms? In total, there are about 33.3 million small to medium sized business across the country.
The pace of startups is not expected to slow down any time soon. Entrepreneurship continues to surge with an average of 430,000 new U.S. business applications per month in 2024, which is 50% more than in 2019, according to the United States Department of the Treasury.
This makes it an excellent time to start a new business. And if you need some help with business ideas and how to get started, you’ve come to the right place.
Small Business Ideas
Hopefully, you have a list of small business ideas that appeal to you. The idea is to identify those ideas that can become profitable small businesses. Often, startup entrepreneurs are advised to follow their passion. While that might work in some cases, the truth is just because you are passionate about something doesn’t mean consumers will care. The most successful businesses are the ones that offer products or services that consumers (whether B2B or B2C) want at a price they’re willing to pay.
So, what do consumers want today? Here are a few small business ideas that may be worth pursuing.
B2C Small Business Ideas
E-commerce
The NRF (National Retail Federation) forecasts retail sales will increase in 2024 between 2.5% and 3.5% to between $5.23 trillion and $5.28 trillion.
Non-store and online sales are also expected to grow between 7% and 9% year over year to a range of $1.47 trillion to $1.50 trillion, which compares with non-store and online sales of $1.38 trillion in 2023.
Baby products
Online baby product sales retailers have benefited from rising incomes, as parents have been turning to online retailers to create baby registries, furnish nurseries and order everyday items. According to IBIS World, revenue for baby products is expected to reach a total of $12.8 billion in 2024.
Some of the most popular categories include:
- Safety products including health and grooming products, monitors, and baby gates.
- Furniture such as cribs, toddler beds, and highchairs.
- Entertainment and toys, such as activity seats, jumpers, and swings.
Toys
Toy industry dollar sales have held steady from January through June 2024. Many of these sales continue to take place online, or from brick-and-mortar retailers who offer curbside pickup options to busy parents.
Fashion dolls and accessories, sporting equipment, games, building sets, and summer seasonal toys tend to be top sellers.
Beauty
Today, the beauty industry is becoming more and more inclusive. One of the fastest-growing categories in the beauty industry is products targeting male customers. In fact, the personal care market for men is projected to hit $276.9 billion by 2030.
Another major trend in the beauty industry is clean beauty, which means the products are safe and non-toxic. The global clean beauty market is expected to grow from revenues of $5.4 billion in 2020 to $11.6 billion in 2027.
Home improvement
Likely due to the increased number of people working from home, many are decided to transforming their spaces. Over the last year, consumers have invested their home improvement dollars in their kitchens and baths.
This means there are opportunities for businesses that sell these home products. The outlook is also strong for contractors and remodelers. According to the Better Business Bureau, the remodeling industry has an average profit margin of 6.3%, which should remain consistent through 2027.
Also, since many of us are now working from home, entrepreneurs selling organizational products or services are in high demand.
Food trucks/ghost kitchens
If you’ve always wanted to be in the food business, but the startup costs are too high, consider starting a food truck business or launching a ghost kitchen. Ghost (or virtual) kitchens launched during the pandemic, and are still thriving. They offer take-out and/or food delivery only and often can operate in less costly parts of a city.
Less prime real estate also means more space to accommodate delivery and catering vehicles that would otherwise be occupied for customer parking.
Tutoring
Tutors are in great demand today, and starting a tutoring service is a great side business idea. ZipRecruiter reports private tutors are averaging sales of nearly $72,000 a year.
B2B Small Business Ideas
All those new startups are going to need help launching and growing their businesses. This means there’s a lot of opportunities for businesses that serve other businesses (B2B). Business services in demand include:
- Accountants and bookkeepers
- Web designers
- Graphic designers
- Business consultants
- Digital marketer
- Business plan writers
- Translation services
- Social media consultants
- Virtual assistant
Business formation
Once you decide on what type of business you want to start, you will need to take care of the details. One of the most important decisions is choosing the business formation structure that’s right for you. If you don’t want to incorporate, the simplest and least costly option is to operate as a sole proprietor. If you don’t register a separate name for your business in your state, your first and last name will become, by default, your company’s name.
However, when you run a sole proprietorship, there is no legal shield between you and the business. That means you can be personally sued by unhappy clients.
Today, many business owners are starting an LLC (limited liability companies), which are considered a separate legal entity from its owner/s. This means they’re protected from personal liability for any debts and claims on the business. If you own an LLC, you are required to keep your business’s finances and expenses separate from yours or other members of the LLC.
Which is right for you?
Each business structure has its pros, cons, and tax consequences, so before choosing the one that’s best for your company, consult with your accountant and attorney.
Disclaimer: Fundbox and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.
