Editor’s Note: Dawn Rivers Baker joins us once again outlining the 10 best opportunities for those who run single-person businesses — also known as nonemployer businesses or personal businesses or the self-employed. Even as a business of one person, you’re sure to find at least one opportunity worth checking out.
By Dawn Rivers Baker
The U.S. Census Bureau started producing annual nose-counts of “nonemployer” businesses — that is, firms with no paid employees other than the business owner or owners — in 1997. Since then, their numbers have exploded. The total number of U.S. firms grew by 21% between 1997 and 2004, and almost all of that growth consisted of nonemployer businesses (also called personal or single-person businesses or the self-employed).
You wouldn’t think that these smallest of small businesses could be such a big deal and, individually maybe they aren’t. Collectively, however, they numbered 20.5 million as of 2005, almost 80% of the businesses in the country, and they raked in about 8% of GDP that year.
It seems that circumstances came together in the final years of the 20th century to make the nonemployer firm a growing force in the U.S. economy. The technology that lets a nonemployer firm communicate with customers worldwide and operate a business on a 24/7 basis matured. In industry after industry, technology has lowered barriers to entry as well. And, in a service-oriented, knowledge economy, it became possible to construct a business with no more inventory than the expertise and information lodged in a human brain. In many ways, the 21st century belongs to nonemployers.
So, what are the best opportunities for these nano-businesses going into 2008?
Some of them spring from the way technology is changing how we work:
- 1. Virtual staffing agencies. You might be surprised at how much money there is in human resources and that is true of virtual staff, too. As more and more businesses are waking up to the virtues of telecommuting and the costs savings in hiring independent contractors, there will be an accompanying demand for all kinds of professionals who are willing to work remotely.
- 2. Content aggregators. Just as firms like NetFlix, Amazon.com and Rhapsody have found success in aggregating the Long Tail in the movie, bookselling and music industries, opportunities now exist for all sorts of aggregators who can create systems to help confused Internet users navigate the bewildering wealth of niche information available online. That includes content verticals (topic niches such as parenting, gardening, business and entrepreneurship) as well as format-based horizontals (newsletters, blogs, social networking sites).
- 3. Digital content producers. One of the virtues of the online world is that it lets you create digital product that can be made once and sold an infinite number of times. So, if almost-elastic profit margins appeal to you and you are a reasonably good writer, an excellent opportunity may exist in creating information products of different types at different price points for different kinds of customers.
- 4. Business and personal coaching. When policy wonks talk about education, they don’t usually mention the silent but growing problem of a generation or two whose schooling has not prepared them for the world in which they live. More specifically, most of us were educated to be employees and, because of that, many have trouble coping with the unsupervised nature of independence and self-employment. The rise of business and personal coaching to meet that need is a trend that shows no signs of slowing.
- 5. Business services. Microbusinesses tend to want to focus on their core competencies and outsource other business functions to independent contractors and/or other microbusinesses. This creates a large and growing market for all sorts of business services, particularly advertising, marketing and public relations.
Another trend that will create opportunities for nonemployer businesses is the growing concern about the environment, global climate change and energy.
- 6. Environmentally-friendly construction. The construction business is, believe it or not, composed almost entirely of nonemployer businesses; in fact, research from the 1990s found that 77% of the industry consists of home-based businesses. As Americans become increasingly eco-conscious, nonemployer construction firms that specialize in using environmentally sound materials or in building especially energy efficient properties are likely to find themselves in demand.
- 7. Oil and energy extraction consultants. This is already one of the fastest growing segments in the nonemployer universe, both in terms of number of businesses and in terms of revenue growth. Obviously, a certain amount of training and experience in this line of work is a necessary prerequisite. But, again, with the focus on domestically produced, environmentally friendly energy sources, companies in the business of producing oil products and generating energy will be looking for these consultants and the guidance they offer.
- 8. Energy-related environmental consultants. Another notion that is rapidly taking hold is for individuals to do their bit to reduce their oil consumption. For starters, it is patriotic (reduce dependence on foreign oil) and philanthropic (help save the planet). It will also reduce the costs of living and doing business for everybody. Nonemployers that can help homeowners and businesses to increase their energy efficiency, select alternative or renewable energy sources, or change their processes and procedures to decrease their carbon footprint should enjoy a brisk business in their chosen market.
Finally, there are those aging Baby Boomers.
- 9. Health care service providers. There are likely to be any number of business opportunities for nonemployers in the health care business in the coming years, especially in home health care, long term care and hospice services. Here, the real opportunities are not in actually providing care — in this industry, the only care-givers who really make money are doctors and surgeons — but in helping patients and their families navigate the administrative maze of long term care, insurance and various federal benefits. And don’t forget the opportunities inherent in virtual staffing in this particular niche.
- 10. Personal services. It sounds a bit science fiction when you stop and think about it but there is a growing Sandwich Generation market for personal services ranging from the traditional housekeeping/cooking to child care to house-sitting to shopping to social organizing and more. Believe it or not, as people get busier and busier, they are becoming more willing to farm out bits and pieces of their lives to the hired help. This is not going to be glamorous stuff but, if you choose the right service and the right market, it can be both lucrative and even fun.
About the Author: Dawn Rivers Baker runs a publishing business focused on the microbusiness market. She is the Editor and Publisher of The MicroEnterprise Journal, located in Sidney, New York, USA.