It’s Been a Tough Time, But It’s Now the Year for the Entrepreneur
2020 certainly turned the business world upside down. As an entrepreneur, it’s probably left you questioning what industries will boom in the future. Identifying these is the first step to deciding your next business venture.
Be a PEST to identify the business that will boom in the future
2020 sent shockwaves through the global economy. It has also delivered a window of opportunity that I have never witnessed. Everything that happened last year shifted politics, the way that people work, and the way that society thinks.
This seismic shift has tilted the economy. There is now the potential to start a new business in what could be rapid growth sectors that never made headlines before. How do you identify these? Learn to be a PEST!
What is PEST?
PEST is an acronym for Political, Economic, Social, and Technological factors. It’s an analytical method that is usually associated with determining your strategy in your current business, a little like SWOT analysis.
The difference is that PEST analysis examines high-level external factors, whereas SWOT analysis looks at your business and both internal and external factors that affect it.
When you apply PEST analysis to your existing business, it helps you to understand psychological aspects that affect how your customers are shifting their buying habits. For example, the threat of unemployment makes people more hesitant to spend their money on luxury items, because their mindset has shifted to satisfying their basic needs (food, shelter, and health).
When applied to the broader market, PEST analysis has the power to identify what industries and businesses are set to boom. It can help with your strategic direction and your market timing.
Identifying industries that will boom in 2021 and beyond
Here’s how I have thought about the current economy, what’s actually going on, and how everything in the last year or so will affect the business climate as we move through 2021 and beyond.
What policies, regulations, and laws are impacting us? There are many, such as taxes, trade tariffs, the environment, political stability, and so on. There has certainly been a lot going on! Where shall we start?
Of course, COVID-19 has dominated many of the headlines. So, too, has societal unrest. We’ve seen a growing immigration challenge. Taxes look set to rise. A new government has brought greater political stability. It has also brought greater emphasis on green issues and clean energy. Fossil fuels have been penciled in to be rubbed out. Federal and state governments are promising to spend on infrastructure as a major effort to help stimulate the economy.
What industrial sectors may prosper in these conditions? I have a list that includes:
Accounting and finance
Economic factors that impact spending decisions include interest rates, inflation, exchange rates, economic growth rates, unemployment, and the ability to borrow funds to invest in business.
The economy has begun to grow again, but this is likely to be dependent on the direction that develops with the course of COVID-19. It looks hopeful right now, but uncertainty persists. What we can say is that interest rates and inflation are likely to stay low. Meanwhile, forecasters are predicting that the dollar will remain weak for the rest of 2021.
We have a government that has initiated a huge stimulus package, designed to help businesses and individuals. The $1,400 checks promised to low-income earners and the $600 checks that formed part of the December relief package add up to a huge boost to potential spending power in the economy.
In the light of such factors, industries that could perform well include:
Accounting and finance
House remodeling, and home improvement products
Training and development companies (reskilling for career change, for example)
Social impacts include factors such as population growth and changes in behavior.
This may be the area which has been most impacted because of the last year. We’ve seen a revolution in how people work, how they think, and their outlooks. People have become more aware of their relationships, their colleagues, and issues that affect their communities and the wider world. They are more likely to deal with businesses that reflect their values.
What businesses could be spurred to rapid growth now? Here are my picks:
Businesses that deliver to high social responsibility values
Businesses that source locally
Internet-based businesses that promote deeper connections
Cleaning and trash disposal firms
Businesses that provide environmentally friendly solutions
Technological advances which change the way that businesses operate and how people interact. Looking back in history, we could talk about advances such as railways (making travel easier), automobiles (making commuting more possible), the telegram and the telephone (transforming communication), and, of course, the internet (transforming the way the world works).
We have witnessed a massive shift to working from home, learning at home, and online leisure activities. Social media is leading the way, but new apps and businesses are being developed at a rapid pace. Some businesses that were already in existence have been transformed. Sectors and businesses that should benefit from new technologies and the momentum of technology include:
Success is knowing
Every recession, every shock, is accompanied by many sad tales. My heart goes out to all those who have been affected by the terrible events of 2020 and now into 2021.
But here is something else I know. All shocks and recessions also present new opportunities. The bigger the shock, the bigger the recession, the bigger those opportunities are likely to be. And boy, has the last year been the biggest shock on record?
Now is the time to look forward, though the ‘new normal’ is likely to look different to how the world looked before all of this took an unsuspecting America by storm.
Considering all that has happened and all that is happening, I really like the look of industries that include health, technology, finance, fitness and lifestyle, construction and remodeling, Businesses that incorporate high social values in their vison are likely to do well within these industries.
What does the entrepreneur in you say?
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