New businesses fail more often than they succeed. According to the U.S. Bureau of Labor Statistics (BLS), about half of the new businesses make it past the first five years. Starting a new business is not easy and requires a lot of time and money before even seeing a return on your initial investment.
If you’re a budding entrepreneur or have dreams of becoming one, you may ask yourself what businesses are profitable for young people to invest in. Well, there are many different types of businesses you can invest in. However, some offer better returns than others.
While starting your own business at a young age is not easy, it’s worth it in the long run, so go ahead and take the first step if you have what it takes.
In this article, we’ll look at five profitable businesses that any young person can invest in right now and succeed in the long run:
1. Software Development
A software developer is someone who creates computer programs. There are a variety of different jobs that fall under this umbrella term, but the core skill is to be able to understand how computers work and how to write code. Most software developers need to be proficient in different programming languages, but the top three are Java, Python, and C++.
You can venture into creating websites and apps to develop software for a business. But one of the biggest trends in software development is the rise of artificial intelligence and machine learning. It essentially involves training computers to learn new things, complete tasks, and solve problems without being explicitly programmed.
If you are good at math, enjoy solving puzzles, and are interested in seeing how computers function, software development may be a profitable business. It requires a significant upfront investment of time and money, but once you have your first product, it will be relatively easy to generate additional revenue.
2. Food Service
Food service businesses range from restaurants and hotels to food delivery services and catered events. Becoming a chef is a common dream for many young people. However, it’s not an easy career path and requires a significant investment of time and money before you start running your business due to the stiff competition.
On the other hand, the food delivery business is a profitable investment, especially in urban areas with a high population density. According to market reports, the global online food delivery sector is expected to grow from the current $130.2 billion at a CAGR of 11.44% to reach $223.7 billion by 2027. The statistics can’t be far from the truth, considering the rapid popularity of food delivery apps such as DoorDash, GrubHub, and UberEats. As these food delivery services become more widely used, they will become even more profitable. So, you might want to jump in and take a cut.
3. Healthcare and Wellness
The global wellness industry, including physical fitness, and personal care, is teaming up with the cannabis industry. Although wellness and cannabis are both large industries in their own right, the collaboration is exciting.
According to the market forecast, the global cannabis market size is expected to grow 25.3% annually from its $17.8 B market valuation in 2021. So, it’s wise to invest in the booming cannabis market and profit off the craze. Top Cannabis and THC products like CBD Oil, CBD & THC gummies, etc have shown a great market rise in the past few years.
Generally, healthcare and wellness businesses are becoming increasingly popular as people are more concerned with their health. This can range from creating a small business that provides local services such as meal prep or health and fitness coaching to opening your clinic.
4. Marketing and Advertising Services
Marketing is an integral part of every product or service, and it helps build brand awareness. An entrepreneurial young person with a knack for marketing can make a profit by providing marketing services to other businesses. You can also promote your own products and services by creating content for your website and social media.
With a good online presence, you can charge businesses for advertising and marketing services and make profits as you scale your business. Advertising and marketing services are in high demand as more startups and small businesses are coming up. That means you can easily gain clients by offering affordable marketing plans and building a good client base. To build your client base, you can start by attending networking events in your area and offering marketing services to businesses.
5. e-Commerce Business
An e-commerce business involves selling products or services online. This includes everything from online marketplaces to drop shipping businesses. E-commerce can be lucrative, plus it can require little initial capital. After all, you don’t need a physical location which means affordability, flexibility, and opportunity for young entrepreneurs.
If you’re tech-savvy and good at designing websites, e-commerce can be a profitable business. An e-commerce business allows you to sell products or services online through an online store. You can also sell products on marketplaces like Amazon and eBay.
You can start an e-commerce business sourcing products like clothing, gadgets, books, or food items from wholesale suppliers. Then design a website, host it on a platform like Shopify or Squarespace, and drive targeted traffic to your website to make sales.
An e-commerce business requires an initial investment in website creation and hosting, product sourcing, and marketing. However, the investment is likely to increase profits in the long run. According to Statista, global retail e-commerce sales generated $4.9 trillion. The figures are expected to grow by more than 50% to hit $7.4 trillion by 2025.
Conclusion
Young people are often told that they should start a business and not be afraid to take risks when investing in their future. While creating a business is a great way to earn money, it is essential to ensure that your chosen business is profitable. Fortunately, many different types of businesses are profitable for young people to invest in. Still, software development, food service, marketing, advertising services, healthcare/wellness businesses, and e-commerce businesses are some of the most profitable. Simply choose a business idea, pick a niche, and you are ready to get started with some market research.
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