15 Best Niche Industries for Startups



15 Best Niche Industries for Startups

Statistics tell us thousands of entrepreneurs start businesses every year.  After four years, more than 50 percent are gone. Getting a good start is important to success, and one way to do so is by selecting from among the right niche industries.

Why You Should Start a Niche Industry Business

When starting a new business, standing out can be challenging. Yet, finding and targeting a niche market can offer an array of benefits for budding entrepreneurs.



Specializing in a niche industry allows businesses to focus on a specific segment of the market, leading to enhanced growth opportunities and improved brand recognition. Here are five compelling reasons to consider diving into a niche industry:

  • Focused Target Audience: With a niche business, your marketing efforts are honed in on a specific audience, allowing for tailored messaging and campaigns. This focus often results in higher engagement rates and a more dedicated customer base.
  • Reduced Competition: In niche markets, there are typically fewer competitors, allowing your business to quickly become a recognized authority in your specific area of expertise.
  • Higher Profit Margins: Due to the specialized nature of niche products or services, businesses can often command higher prices. Customers are generally willing to pay more for products that cater specifically to their unique needs or interests.
  • Increased Customer Loyalty: Niche businesses often attract passionate consumers who value and appreciate the specialized offerings. This can lead to increased customer retention, loyalty, and referrals.
  • Easier Branding and Positioning: With a clear focus, it becomes easier to position your brand and communicate its value proposition. Your branding can be more distinct and memorable, helping you stand out in the marketplace.

Identifying the Best Niche Industries for Startups: Our Methodology

Identifying the best niche industries for startups is a multifaceted process, one that requires us to consider current market trends, growth potential, and the unique opportunities each niche presents. Here’s our methodology and the criteria we use, rated on a scale of 1 to 5, with 5 being of utmost importance:

  1. Market Growth Potential (5/5):
    • Predicted growth rate of the industry
    • Emerging trends and consumer behaviors
    • Long-term sustainability and scalability
  2. Barrier to Entry (4/5):
    • Initial capital investment required
    • Level of competition in the niche
    • Regulatory or legal barriers
  3. Innovation Opportunities (5/5):
    • Potential for technological or service innovation
    • Openness to disruption or new business models
    • Availability of untapped markets or customer needs
  4. Profitability (5/5):
    • Historical and projected profit margins
    • Revenue diversification possibilities
    • Scalability of business models
  5. Resource Availability (3/5):
    • Access to necessary materials or skills
    • Availability of industry-specific support or networks
    • Dependency on scarce or nonrenewable resources
  6. Consumer Demand (4/5):
    • Evidence of existing or latent consumer demand
    • Responsiveness to changing consumer preferences
    • Brand loyalty or customer retention potential
  7. Social and Environmental Impact (3/5):
    • Potential for positive social or environmental contributions
    • Alignment with global sustainability goals
    • Consumer perception of ethical practices
  8. Adaptability and Resilience (4/5):
    • Industry’s resilience to economic fluctuations
    • Flexibility to adapt to technological advancements
    • Capacity to withstand regulatory changes

By evaluating each potential niche industry against these criteria, we aim to provide startups with insights into not only the most lucrative sectors but also those that align with broader social, economic, and environmental trends.

Best Niche Industries

Here are the 15 best niche industries for startups.


Small Business Deals


1. Bottled Water

best niche industries

This is a money-making niche thanks to high resource availability and profit margins. However, there’s more to it than just finding a source and bottling the water.  Steps you need to take include sanitizing the bottles and filtering the product. Sell directly to customers or look for grocery store contracts.

2. Organic Skincare

Natural products that don’t harm the environment are on the rise. That includes skincare products for women, which have high market demand and room for growth. These products are so popular now, there’s even a best of list for 2019. A lot of the niche products here are corralled into lines including facial masks and cleansers.

3. Self Improvement

There’s a product for most everything you want to improve about yourself. Courses for everything from improving self esteem to building up your career. There are some obvious ones to start in like how to make money and personal finance. There’s low barrier to entry in this niche, and plenty of room for adaptability.



4. SaaS Software

Selling software as a service to small businesses is big.

One of the most profitable niches right now is SaaS software products targeted towards legal and medical professionals,” writes Nishank Khanna, VP, Growth Utility NYC. “Both niche segments have plenty of cash to spend on products that can streamline their workflows and save them time.”

5. Inbound Leads from SaaS Software

This is a subcategory of the SaaS software niche. Start ups can make a decent living supplying the software and generating leads for clients. Khanna explains.

“Lawyers and doctors spend a lot of money on getting more inbound customers and often spend thousands each year on existing platforms for growth.”



6. Travel Writer

best niche industries

You can monetize your vacations and maybe even turn travelling into a full time gig. Here’s a tip to start selling blogs. Write personal descriptions/ accounts backed up with facts.

7. Wellness

This one has lots of room to branch out.

“Wellness is one of the biggest industries in North America right now.  Entrepreneurs can branch off into any and all directions that are relevant to what they want to do. You may start up as a personal trainer, open up a yoga studio, or create a nutrition product.”– Deborah Sweeney, CEO, MyCorporation.com



8. Online Dating

What better way is there to get people together than use the Internet to setup an online dating company? There’s good money in this niche thanks to high consumer demand and adaptability. If you live in a big city, you might want to target local singles at first.

9. Home Organizing

Melisa Celikel is the CEO of Let’s Get You Organized! She supplied a quick run down of how she got her business started.

“I created a Wix website, a FB business page, IG business account, and Pinterest business account,” she writes. “Accepting payments through Venmo, Square, and PayPal since there’s no barrier to entry with these free apps was easy.”

Celikel formed an LLC on LegalZoom and got business licensing and insurance within a week.



10. Natural Dog Food

best niche industries

Fido’s health is important to everyone who owns a dog. This is a great twist on the health market that’s worth $21 billion. You’ll need to be familiar with some Food and Drug Administration regulations to start.

11. Animal Rescue

best niche industries

You’ll need to have the proper permits and licences to start this business. You’ll also need to hire a staff right away to make an animal rescue work.



12. Private Label Products

“Find a product that is in high demand on Amazon or eBay. One where the top sellers are currently lacking in some area,” writes Patricia Russel from FinanceMarvel. “Drop shipping a similar product with your own private label can set you up for serious long-term success when done properly.”

Here’s some further information on starting a private label business:

Starting a Private Label BusinessDescription
Why Private Label?Private labeling allows a unique branding opportunity and higher profit margins by selling another's product under your own brand.
Product SelectionUse tools like Jungle Scout to identify high-demand products on Amazon or eBay.
Identifying GapsStudy top sellers to find weaknesses in branding or feedback as your market entry points.
Dropshipping Vs. StockingDropshipping reduces initial investment by selling directly from the manufacturer, while stocking might offer higher profits.
BrandingCreate a distinct logo, packaging, and promotional materials to make your product stand out.
Legal ConsiderationsResearch intellectual property rights to ensure no infringements and protect your brand.
Supplier RelationshipsFoster strong relationships with suppliers to ensure quality and fair pricing.
Feedback LoopActively gather customer feedback to refine your offerings and stay competitive.
ScalingConsider diversifying products or expanding into new markets as demand grows.

13. Monthly Gift Basket Subscriptions

“These have been popularized on Reddit by the Dollar Shave Club,” Russel says.  “The monthly subscription business is incredible because it has a low cost of entry.”

She suggests a collection as-is items from Alibaba, AliExpress, or JD.com to start. Then add your own private label items.



14. Personal Finance

If you’ve got some education and training in this area, this is a great niche business. You can start building up a client base through public speaking engagements.

15. App Development

best niche industries

Almost anything that has to do with IT is startup gold. App development is no exception. Give away one version for free and then charge for more features. This leads to high profitability and adaptability.



For more, check out these 51 business ideas and these most profitable niches.

Image: Depositphotos.com


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Rob Starr Rob Starr is a staff writer for Small Business Trends. Rob is a freelance journalist and content strategist/manager with three decades of experience in both print and online writing. He currently works in New York City as a copywriter and all across North America for a variety of editing and writing enterprises.

2 Reactions
  1. Software is amazing. It can start small but the profits are huge.

  2. Useful information you have shared here for those who want to start their business. You are right, good start is important to success.

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