This story is available exclusively on Business Insider Prime.
Join BI Prime and start reading now.
- 2020 has witnessed seismic shifts in the ways people live, work, and think. For entrepreneurs and business owners, these changes have presented challenges and opportunities alike.
- Regardless of your particular industry or geography, some trends cut across sectors and can have a significant influence on your business plan.
- Business Insider has collected the major themes and ideas that have shaped the year for bootstrappers and innovators of all kinds.
- It would be impossible to capture everything, but this unranked list represents 17 trends that BI has deemed most relevant for entrepreneurs and small businesses.
- Visit BI Prime for more stories.
In the waning days of 2019, few could have foreseen how wildly the new year would diverge from its planned course. Mere months into 2020, a global pandemic disrupted professional and social patterns throughout the world, upending even the most calculated predictions.
In its wake, the tumult of 2020 has forced entrepreneurs and small businesses into a series of creative pivots. This reshuffling of the business landscape has led many in some industries to shutter, while helping other opportunistic markets to bloom.
In the midst of this reorganization, it remains true that entrepreneurs and small businesses have different concerns and priorities than investors and publicly traded companies. There are certainly areas of overlap, but what works for Wall Street isn’t always the same as what works on Main Street, especially now.
To help the bootstrapping business owners and innovators who propel the US economy, Business Insider has compiled a revised list of the major trends that we predict will shape the rest of this year (and beyond).
Our holistic approach is informed by original research, reporting, and analysis from across BI and our newly formed small business desk.
A comprehensive list of trends would be impossible, so we distilled it into the 17 ideas we find most important and exciting for entrepreneurs and business owners.
We lead with health and wellness (our top pick for small business categories in 2020), but the items here are unranked.
Here are our picks of the top 17 trends for entrepreneurs to watch in 2020.
Health and wellness
Examples: At-home fitness, remote exercise equipment, fitness influencers, mental health
Why it matters: The coronavirus has caused more than 380,000 gyms and boutique fitness studios to close, but the need for exercise has not slowed down.
Instead, gym-goers have had to substantially rethink their workout routines, forcing the industry to shift its focus away from in-person workouts to at-home options.
Companies such as Peloton, Tonal, and Hydrow, whose entire offerings centered around at-home fitness, have seized the opportunity. Mirror, which was recently acquired by Lululemon for $500 million, has also benefitted from the shift in exercise trends.
To stay competitive, traditional gyms have been forced to rethink their appeal to customers. “Gyms are in a position where they will innovate or they will fail,” Jeff Halevy, a 20-year fitness veteran and founder of Apex Human Performance, told Business Insider.
Still, as millions of health-minded consumers try at-home fitness services for the first time, many are realizing the convenience afforded by this new normal. Working out at home can be cheaper, safer, and less time-intensive, meaning that this sea change in fitness trends might not reverse when the pandemic ends.
Forty percent of survey respondents from consumer-focused investment bank Harrison Co. said they tried at-home fitness for the first time during the pandemic – and many won’t go back to the gym.
Health services and benefits
Examples: Telehealth, remote medicine, network providers
Why it matters: The coronavirus and its attendant stay-at-home measures have sparked a massive change in the way that patients access healthcare. According to Merrit Hawkins surveys, 48% of US physicians now report treating patients via telemedicine — a huge leap from the 18% who said the same in 2018.
This paradigm shift in one of the country’s biggest industries, healthcare, has massive implications for medical practictioners and patients alike. Ryan McQuaid, CEO and cofounder of virtual health platform PlushCare, told Business Insider that “virtual visits will outpace in-person visits” within the next 10 years.
Telehealth companies such as Doctolib, 98point6, and Sweden’s KRY are among the many players in the rapidly expanding industry.
To cope with the surge in demand, these once-boutique brands have found themselves in a race to scale as quickly as possible, hiring medical professionals at a rapid clip to meet consumer needs.
In turn, network providers will have an opportunity to partner with these new operations to meet connectivity demands, while still while still abiding by the country’s rigorous healthcare security requirements.
Health food without compromise
Examples: Vegan, lactose-free, non-alcoholic
Two thirds of the world population is lactose intolerant and lactose intolerance is on the rise in the US, leading to a growing market for dairy alternatives in food and beverages.
Whether consumers are avoiding lactose or alcohol, they still want something that is just as enjoyable as the original product, and grocery shelves are only beginning to see new, equally satisfying offerings.
Moving away from meat
Examples: Plant-based proteins, lab-grown meat alternatives
Why it matters: Beyond the individual health considerations, eco-conscious consumers are driving a boom in demand for more sustainable forms of protein.
The market for meat alternatives could be worth $140 billion by 2029, Barclays estimates, and Gen-Z could drive global sales of plant-based meat to top $5.2 billion by 2020.
Brands like Impossible and Beyond Meat captured the attention of Wall Street, but the market is far from saturated. And you don’t necessarily have to invent a new product. Restaurant owners shouldn’t let themselves get lapped by the likes of Burger King and Dunkin’ in offering diners more choices from the grill.
Plus, as food-delivery has soared in popularity during the pandemic, demand for meat alternatives has continued to rise. Between March 2 and March 16, sales for plant-based alternatives rose 91%, according to Motley Fool. And in the 11 weeks since, faux-meat sandwich sales have continued their hot streak, averaging 72% more sales than in the 11 weeks prior.
Examples: Legalized marijuana, hemp, CBD
Why it matters: Investors went wild over cannabis in 2019, but continuing US federal restrictions limit the options for big businesses.
But as state and local regulations continue to shift toward legalization, the once black-market industry presents significant opportunity for small business. The numbers are hard to calculate, but CBD industry in the US alone could become a $16 billion industry by 2025, according to an analysis from the investment bank, Cowen.
How the trends in cannabis will play out remain to be seen, and permitting and capital constraints are substantial, but many growers, processors, and sellers are seeing success with strategies that focus on local markets and organic growth.
Examples: Solar, wind, batteries
Why it matters: Unit costs for alternative energy are on-par with or lower than the cost of fossil fuels, and more homes and businesses are investing in their own systems.
Jobs in solar and wind are expected to grow at rates of 63% and 57% in the coming decade, and the sector is expanding without the kind of federal subsidies that the fossil fuel industry enjoys.
Battery technologies will play a major role in this transition, since sun and wind aren’t always available, and different regions of the country will naturally emphasize different technologies.
Reaching new geographies
Examples: Innovation hubs, big city diasporas, venture capital, heartland cities and towns
Why it matters: Sky-high rents, living costs, and commuting times have made it harder to live and work in cities like New York and San Francisco.
The coronavirus, too, has motivated many to abandon the city life. For some, emigrating from large metropolitan hubs is just a temporary reponse to the increased risk the virus poses in dense areas. For others, though, the pandemic has thrown into light more sharply the perennial challenges of living in large cities, accelerating migrations that are likely to be permanent.
Companies and individuals are electing to leave the coasts, and some states and cities are offering bonus payments for people to move there.
Although the vast majority of venture funding is concentrated in just a few cities, new investing strategies are specifically targeting the heartland.
With anchor institutions like research universities and large companies, smaller cities around the US are becoming hubs of innovation for particular sectors of the economy, and engines for middle class growth.
Examples: Tax law, enterprise zones, Community Reinvestment Act
Why it matters: The Opportunity Zone program that began with the 2017 tax overhaul is the latest iteration of an approach to local development that has been around for a long time.
But this time, the bipartisan program is bigger than ever, and has the potential to reshape communities all over the country by bringing a Silicon Valley ethos to more than 9,000 distressed census tracts.
Rethinking business structure
Examples: Partnerships, S-corps, B-corps, networks
Why it matters: Another feature of the 2017 tax overhaul was the introduction of new rules for different business structures. For business owners, it may be smart to review how your current structure is treated under the law.
In addition, as more companies like Uber and Lyft come under the scrutiny of state and local regulators, the definition of independent contractor is liable to change and could have broad reaching implications for you or your business.
Adapting to the future of work
Examples: Gig economy, freelancer networks, remote work, work from home
Why it matters: The transition to working from home might be the most visible, ubiquitous effect of the coronavirus. What first began as a necessity, though, has now become the preference of many, companies and employees included.
According to an April Metova survey, 57% of respondents who are new to working from home due to the coronavirus said they would prefer to keep doing so in the future. Companies have also seen increased productivity from at-home employees, and eliminating rent and other infrastructural costs has helped companies save money by transitioning to remote work.
Companies that embrace freelancers and remote workers can access a wider talent pool than those that require physical presence from 9 to 5. According to a survey by Deloitte, half of millennial and Gen Z respondents said they would leave their job within two years if they had a choice, up from 38% in 2017.
These trends present and opportunity for business owners who need additional work, and for entrepreneurs who can creatively provide those services.
Examples: B2B, government contracting
Why it matters: Some of the most successful businesses aren’t household names. In fact they may only have a handful of clients.
But if those clients are large enough — think US government or Fortune 500 company — your business may focus on performing one niche service well, such as event production or graphic design.
Some services depend on scale to be effective, but others are more individually tailored, and being smaller in size could have the advantage of being more nimble and responsive.
Examples: Sneakers, upcycling, vintage
Why it matters: With so many new consumer goods entering the market, the secondary market has become an interesting opportunity.
Footwear enthusiasts have turned a hobby into a business, that some saying sneakers are “the new gold.”
Online exchanges like StockX and other platforms like Poshmark are evidence that for some products, leaving the store is only made its first step in a long journey in the market.
Mobility for people and things
Examples: Last-mile transportation, alternative modes, delivery services
Why it matters: Just as people need to have places where they can settle down, they also need ways to get themselves — and their stuff — there too.
Big companies are generally better suited to tackle the national-scale challenges in mobility, but many gaps remain to be filled at a smaller local scale.
Small businesses can partner with mega firms to develop better logistics strategies and transportation modes that lead to improved solutions for this growing demand.
Harnessing big data
Examples: Artificial intelligence, virtual reality, analytics
Why it matters: The proliferation of sensors, trackers, and other data sources is expected to generate 175 zettabytes of data stored by 2025, according to research from IDC.
Combined with initiatives from tech giants that offer unprecedented new computational tools, businesses that help companies and individuals harness the power of big data could be quite profitable.
The future of money
Examples: FinTech, alternative finance, cryptocurrencies
Why it matters: Traditional forms of lending and credit have been insufficient for many individuals and small businesses.
Cash flow is one of the most commonly cited reasons that small businesses fail, and the list of new sources of alternative capital is growing fast.
Financial institutions and tech companies are racing to offer credit to small businesses, not to mention the new forms of blockchain and cryptocurrencies.
These sources of capital could be a lifeline for your business when cash is tight, but the regulations and protections are nowhere near as robust as they are with traditional banking. Just make sure to read the fine print and proceed with caution.
Examples: Bootstrapping, self-finance, debt-finance
Why it matters: 2019 was supposed to be a banner year for IPOs, with billion-dollar unicorns like WeWork charging to the public market on a wave of venture capital. Things didn’t exactly go as investors expected.
Given the lackluster performance of these startups, there could be a greater emphasis on business fundamentals and sustainable growth.
Equity investors may be more wary of pitches with hockey-stick growth projections, and entrepreneurs may find bootstrapping more appealing than selling ownership stakes of their companies.
Examples: Diversity, inclusivity, access to capital, opportunities for advancement
Why it matters: Reverberations from countrywide protests decrying police brutality and racism have rattled the professional sphere, as companies face a reckoning for their lack of diversity and discriminatory office behavior.
As a result, executives have either created further diversity initiatives or doubled down on preexisting ones. Critics of these efforts have called them empty measures, as 40+ years of equity-minded town halls have failed to yield meaningful diversity in the workplace.
As the country continues to grapple with its collective racist history, companies have made renewed promises to improve their diversity efforts. Their success or failure could play an important role in their ability to hire from an increasingly diverse workforce.