May 11, 2022
Kyle Fawcett
Here at ProjectionHub, we have the opportunity to work with many different small businesses, startups, and scale-ups that are either trying to secure funding or create a really solid business/financial plan. At Projectionhub we focus primarily on equipping founders with financial projections which are commonly used in loan applications (either SBA, bank, etc.) or raising investment when launching or expanding/scaling a business. Due to the fact that we offer financial projection products and services to a wide range of industries and business models, we’ve been able to gather some insights as to what types of businesses people are starting and scaling the most in 2022 based on the industries we typically see. We’ll also add a little insight including how much you could expect to make if you started a business in that industry, why we think each industry is trending towards growth, and some more helpful tips!
Last disclaimer(s): First of all, these are not ranked in any particular order but are the most popular businesses we are seeing start and expand in 2022 so far. Second, results could be skewed based upon industries we naturally see more of and that may not be an accurate indicator of the entire market. For example there are more people searching for how to start a vending machine business than any other type of business, but that still isn't something we see that often when it comes to financial modeling.
OK let’s get to it!
1. Trucking Businesses & Owner Operators
Owner Operator Trucking Industry Growth Trends - As you will see us mention many times in this article, due to the Covid-19 pandemic there was a large shift in many industries which has created opportunities as we exit the pandemic. At ProjectioHub, we have seen a very consistent stream of individuals creating projections in order to get a loan for a new truck or multiple trucks. For the trucking industry specifically, there were many supply chain challenges presented as a result of the pandemic as well as an increase in shopping online. This skyrocketed the need for items to be transported across the country and world and created an opportunity for independent truckers. According to policy advice, there will continue to be opportunities for new owner-operators in late 2022 as consumer demand stays high and labor shortages persist for larger trucking companies.
We also see trucking as a business where there is even more opportunity in a recession which may be likely in 2022. Checkout more detail on starting a trucking business in a recession here.
How much can Trucking Companies Make and How much does it cost to start? -Seeing as many people are starting trucking businesses or becoming owner-operators with a large opportunity for growth in the industry, you may want to know how much it costs to start a trucking business and how much you stand to make. As we outlined in our article how to start a striking business, we calculated it would cost between $40,000 - $250,000 if you plan to own your truck(s) or $12,000 - $20,000 if you plan to lease initially. If your business ramps up quickly and you find consistent freight loads, you can average just over $400,000 per year in revenue and generate more than $100,000 in profit annually before even scaling to a larger fleet of trucks.
If you are interested in potentially starting your own trucking business or becoming an owner-operator, you may need trucking financial projections especially if you plan to acquire a business loan.
2. Micro Breweries & Distilleries
Craft Brewery and distillery growth trends - Through financial projection products and services sold, ProjectionHub has seen a strong trend for craft breweries and distilleries planning to start or expand in 2022. According to Statista, you can see in the chart below the dramatic impact that the pandemic had on the craft brewery industry specifically. While this is unfortunate for those who ultimately had to shut their doors in the last few years, you can see the massive difference between how many breweries were once supported in the United States versus where it is at now. Now, pair this with a recent report released by the Brewers Association, who 76% of their craft brewery members expect an increase in sales primarily through taproom sales and distribution. Now, while the days of year after year of double-digit growth may be behind us, it is clear there is a large portion of the market back up for grabs with a promising future.
How much does it cost to start a brewery and how much can they earn? - Referencing our guide on how to start a brewery, we gathered through research that starting a new brewery can cost anywhere from $250,000 to $1,500,000. We also estimate that you can generate between $200,000 and $3,000,000 in sales with an average profit margin of 9% which comes out to between $18,000 and $270,000 in profit. To calculate how much you think your brewery with your unique assumptions could make, check out the brewery specific projections template.
3. Full-Service Restaurants
Full-Service Restaurant Growth Trends - It is no surprise that the restaurant industry has had a tumultuous few years recently. One surprising thing, however, is that the overall number of full-service restaurants remained pretty high with a pretty quick recovery with the number of single unit establishments open already above pre-covid levels. At ProjectionHub, we have seen an increase in restaurant financial projection templates within the last 12 months. Something that has become very clear is that restaurants that are able to implement more technology and delivery options are the ones paving the way. According to restaurant.org, restaurant sales in 2021 were down about $65 billion to $799B compared to pre-pandemic levels, but by the end of 2022 food industry experts are estimating levels could reach up to $899 billion which shows clear signs of growth and opportunity.
How much does it cost to open a full-service restaurant and how much can you make? - According to restaurantowner.com a survey of restaurant owners stated that it costs between $150,000 to $750,000 on average to open a new restaurant. They also stated that restaurant owners can expect to generate $550,000 to $1,880,000 in revenue with $0 to $ $168,000 in profit. You can create a reliable financial forecast for your startup restaurant using this template.
4. Coffee Shops
Coffee Shop Industry Growth Trends - Coffee shops were notably hit hard when the pandemic was raging and an estimated 7.3% closed in 2020, but in 2022 so far we have seen a steady rate of financial models being utilized for new coffee shops. Other sources also point to the fact that the coffee industry shows plenty of signs of being back in demand with a 5.56% estimated compound annual growth rate for the next 5 years.
How much does it cost to open a coffee shop and how much can you make? - Using our coffee shop profit margin guide for reference, we found that it costs on average between $200,000 and $375,000 to open up a coffee shop. Owners can expect to earn between $60,000 and $160,000 from their coffee shop each year as well. If you plan to open up a coffee shop, you can create comprehensive financial projections in on time using our coffee shop financial projection template.
5. 2 Sided Marketplaces
2-Sided Marketplace Software Growth Trends - 2-sided marketplaces (which go by many names like marketplaces, MSP, or multi-sided markets) are gradually becoming part of the foundation of our daily lives. From getting food delivered from Doordash, hailing a cab on uber, booking a rental on Airbnb, or selling a used item on Facebook marketplace. The reality is that there are many 2-sided markets that people use that don’t even realize what the business model is! According to PWC, in 2014 industry revenues for MSPs was just under $20 billion and in 2022 we are trending towards a little over $40 billion. Even more dramatic than that, PWC estimates that the sharing economy alone with reach $335 billion by 2025. As technology becomes more and more common and nearly a requirement for daily life, that continues to open the door for more businesses and software to create a place where suppliers and consumers can meet. At ProjectionHub, we have continued to see a consistent flow of financial projection products & services being purchased for new 2-sided marketplace models as well.
How do marketplace startups compare to other tech companies? - Rather than go into detail about startup costs for a software business because it is so dependent on the development costs of your software, marketing strategy, founding team, etc., we thought it may be more helpful to see how it stacks up versus other software categories to get an idea of scalability and how much they can generate in revenue. Using a comprehensive study we did of 234 tech startups in 2022 marketplace businesses do generate less on average in revenue than B2B saas or D2C tech companies, but they are very competitive when it comes to average revenue generated per employee which is an indicator that they are scalable. An important step to planning a complex model like a 2-sided marketplace is to have reliable 2-sided marketplace financial projections which you will certainly need in order to raise any funding.
6. Salon
Beauty salon industry growth trends - Another industry that we have seen a real surge in new financial projections for is beauty salons. As you can see below on this chart from Statista, the beauty salon industry took a massive hit when lockdown measures were implemented during the pandemic. A relatively secure industry with an ongoing demand is the beauty salon industry, particularly hair salons unless everyone decides to stop cutting or coloring their hair! So, you can see that when the market was literally cut in half in 2020, there will be a large opportunity to recapture some of the market in 2022 and the following couple of years.
How much does it cost to open a salon and how much can you make? - The average cost of opening a salon in the United States is around $62,000 according to thesalonbusiness.com which can be started for a much lower cost if you plan to just rent a single chair suite or could be much higher cost if you plan to build out a whole space. Referencing our guide to starting a salon, a typical profit margin for beauty salons is between 8 and 10% but that can grow based on what you decided to charge. If you’re planning to open a salon and may need a loan to open, check out our easy-to-use salon financial projection template to have realistic estimates.
7. Airbnb, VRBO, Vacation Rental Business
Airbnb, VRBO, Short Term Rental Industry Trends - Very few industries have exploded like the short-term and vacation rental market. Airbnb and similar businesses have revolutionized the way people travel and vacation all over the world. We have seen that trend firsthand at ProjectionHub as many people have been creating financial projections for single-unit Airbnb properties as well as multi-unit properties. Like the tourism industry as a whole, the pandemic had a pretty large impact on Airbnb bookings, especially in 2019. However, the demand for Airbnb bookings has rebounded considerably. Interestingly, according to Alltherooms, in North America, the number of Airbnb units decreased slightly from 2020 to 2021 by about 100,000 units, but the number of nights booked increased during the same period by over 30,000,000. This trend is likely due to international travel restrictions as a result of the pandemic and individuals in the US choosing to vacation domestically. Comparing those two numbers, it appears with the dramatic increase in bookings and the slight retraction in units available, would indicate there continues to be an opportunity in the market.
Tips on starting an Airbnb business and how much you can earn - A good reason the short-term rental market has taken off is that it can be very affordable to enter the market and can be very lucrative if you have a popular property offering a great experience. Referencing our guide to starting an Airbnb, the average cost to start a single-unit Airbnb is about $6,000 which does not include how you choose to acquire the property if you’re buying or renting it. And the average host earns about $9,600 annually with many earning much much more than that. It’s important to note that while this can be a lucrative business opportunity, it can also be risky if you don’t do your research. Particularly as the economy and housing market begin to come back down to Earth, interest rates rising, and more. Check out different ways to finance an Airbnb property ranked from most to least risky and what impacts interest rates can have on the market.
8. Day Care
Day Care Industry Growth Trend - In the first 5 months of 2022, we’ve seen a large number of people create projections for a new daycare center. When looking at the opportunity for daycares in the current economy, it’s important to consider the impact the pandemic had on the industry. According to fortune.com, 9% of childcare centers closed and that was even after many parts of the United States already struggled to have enough childcare options. Now that employers are reopening offices and many working parents are in need of regular childcare again, they are struggling to find many affordable options in a timely manner. Although this has been a sad scenario for many, it does create a significant opportunity for those looking to start their own daycare whether that be in their home or at a facility. The average cost of childcare has increased so you can expect there to be demand as well as a higher rate to be earned.
Why daycares are good businesses to start and how much you can hope to make - the childcare industry is one of the few industries that is mostly recession-proof outside of pandemic-related lockdowns or slight retractions if working parents are out of a job and can watch their kids at home. The cost to get your daycare open is relatively low as it can be done within your home and most equipment and supplies can be thrifted and provided by the parents of the children. IBISWorld says that the average profit margin for a daycare is around 15% which is a solid rate of income depending on how many kids you are watching. If you are interested in opening your own daycare and need some financial projections to secure initial funding, checkout our CPA developed daycare projection template.
9. Cannabis CBD Dispensary
Cannabis CBD Dispensary Industry Growth Trend - The cannabis industry for recreational and medical use is one that possesses some of the most obvious growth potential. In 2021 cannabis sales reached $26.5 billion and are expected to hit at least $32 billion in 2022. Wall Street predicts the industry could hit $100 billion by 2030 which is understandable as more and more states legaize cannabis use and sales for medical and recreational use. The trends we have seen at ProjectionHub align with the growth in the industry as we have seen more custom financial models and templates being used in 2022 than in prior years.
How much does it cost to start and how much can you make - Starting a dispensary is not a small or cheap endeavor. Our dispensary startup guide shows that the average cost to start a dispensary business is $750,000 as the licenses required are very expensive. However, the upside is significant as revenue averages at $3,000,000 and higher with an average of 15 to 21%. As a capital-intensive industry that typically requires investors or significant financing, it is important to have airtight financial projections for your dispensary.
10. Ecommerce & Online Stores
Ecommerce and Online Store Industry Growth Trend - Last on our list and certainly not the least in terms of opportunity, online shopping was already popular prior to the pandemic but it was much more centralized to a smaller number of large companies like Amazon. The pandemic pushed many businesses, small and large, to pivot and ensure they could offer their goods online and now that an even greater percentage of people are comfortable shopping online, it presents an ongoing opportunity for business owners. According to digitalcommerce360, the pandemic created over 30% annual growth in online sales and then in 2021 another 14%. Another contributing factor to the growth of the industry is that there are many resources making it easier than ever to launch your own web store including easy-to-use website builders, etsy, and others.
The cost to get an online store started is very minimal and really costs only scale with physical inventory which can be reduced oftentimes by using drop shipping. If you plan to launch your new online store at a larger scale or plan to pair it with a brick-and-mortar boutique shop, make sure to prepare ecommerce financial projections.
There you have it, 10 types of businesses that we at ProjectionHub have seen trending upwards in startup and scaleup in 2022 so far. If you have any questions about the business you are planning to start, drop us a line at support@projectionhub.com and we’ll help you get started!
