Despite the pandemic-related challenges of 2020 and 2021, many entrepreneurs have identified and launched lucrative business opportunities. According to the Business Formation Statistics (BFS) report by the U.S. Census Bureau, the overall number of new business applications increased 20.6% year over year from 2020 to 2021. However, some industries saw more growth than others.
Here are the top five types of businesses started during the pandemic based on data from the Census Bureau’s North American Industry Classification System (NAICS).
What is NAICS?
The North American Industry Classification System (NAICS) establishes the standard used by federal agencies in classifying business establishments that collect, analyze and publish statistical data related to the U.S. business economy. It was developed in 1997 with the purpose of being reviewed and revised every five years. NAICS was a joint development by Canada, the United States and Mexico to enhance the comparability of business statistics among countries. The complementing programs in Canada and Mexico are Statistics Canada and Instituto Nacional de Estadistica y Geografia, respectively.
[Read more: Pandemic Startup & New Business Trends]
Top businesses started during the pandemic
Retail e-commerce businesses
According to the Census Bureau's Business Formation Statistics, retail business applications made up the vast majority of new businesses started throughout 2020 — specifically e-commerce, or "non-store” retail.
E-commerce has grown exponentially in the last 10 years, with continued projected growth of 16.1% year-over-year in 2022. E-commerce was and continues to be a viable choice for entrepreneurs. While 84% of retail employees affirm that most of their job can’t be done from home, e-commerce transactions reached a 77% increase from 2019 — an increase that would have taken half a decade based on traditional year-over-year increases.
E-commerce business ideas:
- Subscription boxes.
- Handmade local goods.
- Industrial B2B products.
- Education courses.
The main purpose of the administrative and support sector is to offer general support to businesses across industries — an important job during the pandemic.
Professional and other services
Professional services include consulting, design, research, legal services, accounting and technical services and support. In 2022, the global professional services industry is expected to increase at a compound annual growth rate (CAGR) of 10.9%.
The growth in large part is attributed to companies’ forced restructuring during the height of the pandemic. Cloud-based accounting has seen a dramatic increase in use, as have other cloud-based applications and services. While large companies remained virtual or in a hybrid holding pattern, entrepreneurs capitalized on the opportunity to offer services remotely.
Projections for the future of these services continue to rise, and professional services remain a worthy business idea and investment.
Professional service business ideas:
- Writing, editing and design services.
- Resume building and editing services.
- Virtual accounting services.
- Freelance IT services (including setup, VPN troubleshooting, remote troubleshooting, etc.).
[Read more: 7 Service-Based Business Ideas That Will Be in High Demand]
Administrative and support
The main purpose of the administrative and support sector is to offer general support to businesses across industries — an important job during the pandemic. From working on lease agreements to filling in temporary positions, there is a projected 3.32% increase in growth rate for such roles from 2022 to 2025.
One of the largest gains in the sector lies in janitorial services. From federal mandates to corporate policies, every public-facing business enacted stringent cleaning protocols to keep employees and customers safe. As such, more in-depth cleaning services were necessary.
Administrative and support business ideas:
- Virtual office clerks.
- Niche cleaning services (can be industry-specific).
- Customer service services.
- Account collections agency.
Construction
Though the immediate impact of COVID-19 on the construction industry resulted in a negative impact on 70% of construction companies, the future looks bright. In fact, Deloitte projects major growth for 2022, coming on the heels of an increase in 2021. According to a recent survey, 91% of the engineering and construction employees surveyed characterized the business outlook for their industry as somewhat or very positive.
One of the major propelling factors of this growth continues to be innovative construction technologies that connect people, processes and assets to alleviate communication and supply chain issues.
Construction and engineering-industry business ideas:
- Niche construction capabilities (like the ability to integrate technology into workstreams).
- Online construction inspection training.
- General contracting firms.
[Read more: 3 Pandemic-Fueled Trends Brands Are Embracing Long-Term]
Transportation and warehousing
Though supply chain issues and logistics have been top-of-mind during the pandemic, transportation and warehousing startups have seen success in 2021. Funding for supply chain startups in 2021 increased by 58% over the entirety of 2020’s funding, signaling massive growth. In fact, some have gathered a list of nearly 40 logistics companies that have seen explosive growth within the last five years and are looking at a successful 2022.
Transportation and warehousing startup ideas:
- Logistic technology services.
- End-to-end logistics (including warehousing, fulfillment and last-mile deliveries).
- Outsourced order fulfillment.
- Freight shipping solutions.
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