From organic beauty to gourmet burgers: the best start-up business opportunities in 2016
Wondering what business to start in 2016? Here are 16 opportunities predicted to be big.
Thinking about starting your own business in 2016? Well Startups.co.uk has revealed the 16 hottest businesses ideas that are likely to take off in the coming year. The annual study What business to start in 2016 has been compiled using market research as well as insights from industry experts and entrepreneurs already making it big.
Gin
According to Mintel the UK is in the midst of a ‘gin-naissance’ with sales of the spirit set to reach £1.31 billion by 2020. The rise in demand has been spurred on by 18 to 34-year-olds who are now the age group most likely to drink the spirit. Startups.co.uk suggests launching a gin distillery (like Heads and Tales), opening a gin bar (think London Gin Club), holding gin cocktail making classes or even starting a gin subscription service to ride the wave of this trend.
Fermented foods and drinks
Fermented foods and drinks could also be the next big thing in 2016, with more people starting to realise the health benefits of products like Kefir (fermented milk), sauerkraut (fermented cabbage), miso paste (fermented soybean) and Korean kimchi (fermented vegetables). The process of fermentation releases enzymes, b-vitamins and probiotics that are said to aid digestion and improve the overall health of your gut. Find an ‘in’ by starting a fermented food pop-up or a subscription service. It’s worked for US start-up BAO and UK-based Bio-tiful Dairy.
Pottery
Pottery is also a hot ticket for budding entrepreneurs looking to turn a hobby into a viable business opportunity in 2016. That’s thanks to BBC2 show The Great British Pottery Throw Down, which has reignited the nation’s love of the craft.
According to handmade marketplace Etsy ceramics was one of its top home trends in 2015 and Nielson Sivalinngham, founder of subscription service Wonderush, says pottery classes were the most popular activity on the site last year. Capitalise on this trend with your own classes at a pottery studio or café where you can also display and sell what you make.
Instapreneur
The rise of the ‘Instapreneur’ (someone who uses Instagram to make money) shows no signs of abating in 2016. The popularity of hashtags like #foodporn and #instafashion have turned everyday people into social media stars and it’s these influencers that brands are keen to do business with.
You’ll need a considerable audience to be deemed influential though. A key way to build your following is to find a niche. Mediakix says beauty and fashion, travel and hospitality, home and design, health and fitness and food are good starting points. With a decent reach you could become a brand ambassador or you may find you become a star in your own right, like Michael Zee of symmetrybreakfast who turned his food posts into a cookbook deal.
Live music festival
Everyone loves a music festival, so why not start your own in 2016? Market research from Mintel says music concerts and festivals have seen the strongest growth of all leisure sectors and it’s estimated that Brits spent £2.1 billion attending music concerts and gigs in 2015 alone.
Your venture doesn’t have to be on the scale of Glastonbury. Niche festivals are becoming increasingly popular as organisers cater to more specific tastes on a smaller scale. The 2,000 trees festival set in the Cotswold Hills, for example, focuses on local craft beers and has an environmentally friendly campsite. Meanwhile L Fest in Staffordshire caters for the lesbian community.
Women's sportswear
Women’s sportswear is enjoying a big boost thanks to the demand for crossover active wear that can be worn to the gym and the office as well as in those all-important Instagram gym selfies.
Major sport brands tend to only target 30% of their range towards women, so this could be a great time to muscle in and launch your own women’s sports label to capitalise on the predicted £8.65 billion of sportswear spend by 2019. All you need is to come up with something practical, comfortable, stylish and affordable. Take inspiration from Vulpine and GymTote.
Posh pet food
Posh pet food is another promising prospect to explore in 2016 according to Startups.co.uk. Pets at Home recently reported strong sales of premium pet food in the third quarter of 2015, which it puts down to the demand from pet owners for more advanced nutrition.
And Mintel indicates that recent scares around commercially produced products have seen people shift to independent producers. To crack the market, you just need to find what's missing. Check out Lily’s Kitchen and Billy + Margot for some inspiration.
Fittech
Fittech – or fitness technology – is also set to grow in 2016 fuelled by a generation that want to get into shape and have their vital statistics on the go. While firms like Garmin, Fitbit and Strava have spawned gadgets, apps and wearable items that have hit the spot, the market is far from sewn up.
Deloitte reckons the digital health market will be worth £43 billion by 2018. So if you think you know what fitness obsessives will need next, you're well on your way to cashing in on the trend.
Natural and organic beauty
Natural and organic beauty is also likely to grow in 2016 as people take more of an interest in what goes into their skincare products. Mintel has noted a shift in attitude toward ingredients, with shoppers seeking ‘kitchen beauty’ (things that look they have been made at the kitchen table) and more environmentally-friendly products free from toxic chemicals.
This has helped businesses like Tropic Skincare, founded by ex-Apprentice contestant Susan Ma, to become successful. According to Startups.co.uk opportunities in this sector are rich and it suggests starting a vlog with a focus on natural beauty, launching your own niche brand or designing a subscription service for DIY skincare.
Gourmet burgers
The growing appetite for gourmet burgers makes it another strong venture opportunity for entrepreneurs in 2016. A report from Mintel in August 2015 revealed 7% of Brits had switched from visiting a fast food burger chain to a gourmet burger restaurant, rising to 12% for those aged 16-34. And with UK burger sales set to reach £3.8 billion by 2020 there’s still money to be made.
Opportunities are available for those with inventive flavours. Mintel claims that 26% of Brits want a bigger selection of fillings and 24% are interested in burgers which offer more premium buns like sourdough. Check out how Annie’s Burger Shack and Northern Quarter have done it and make a move with your own burger bar, street food pop-up or even a burger delivery business.
Edtech
Edtech – or education technology – is one of the fastest-growing tech sectors in Britain and is worth £45 billion globally. There are now 1,000 start-ups across the country and in October 2015 the UK government launched EdTech UK, a strategic body to promote even more growth in the sector.
The latest UK Education Market Opportunity Report suggests that demand for edtech will only increase as schools and colleges have to adjust teaching methods. There is an exciting range of edtech prospects you could consider such as something to aid revision or make classroom learning more fun. Just take a look at RefME, an app for university students to make automatic citations, and Gojimo, a revision app with over 180,000 quiz questions for students.
Online watch shops
Startups.co.uk also reckons starting an online watch shop is a good move in 2016. According to Mintel watch sales hit £1.1 million in 2015, and with smartwatches becoming more popular the market is set to really take off in the next few years.
An e-commerce platform makes sense to take advantage of this trend with more and more people shopping online and the ability to reach a global audience. There’s opportunity as a reseller or even starting your own brand from scratch like Henley-on-Thames-based Bremont, which launched 14 years ago creating handmade British pilot’s watches.
Activity bars
Activity bars, which combine drinking with an experience, are also tipped to be big in the coming year.
A 2015 Mintel report found that young people are "constantly on the lookout for new experiences, which can be as simple as trying a new food or going to a pub quiz". In its survey of UK internet users aged 16-35 it found there would be demand for alternative bars offering food tasting, footgolf and even Netflix streaming.
Bounce, for example, is a social ping pong bar that also offers cocktails and pizza. Co-founder Adam Breeden commented: “Evidently, the trend is for businesses to be a jack-of-all-trades, providing customers with a one-stop destination for food, drinks and entertainment, with customers increasingly looking for more than just alcohol to fuel their nights out."
Fitness franchises
If you are looking to start a business this year a fitness franchise may be a smart move. Franchises are said to have a 15% better five-year survival rate than start-ups and one in five are more likely to buy from a franchise.
According to Cathryn Hayes, head of business support at the British Franchise Association, franchising gyms and health clubs is one of the bigger growth sectors. She said: "It's a growing marketplace – arguably the UK population has never been so health-conscious and fitness franchising has been big business for a while now."
Budget gyms are said to be growing faster than any other part of the sector. Children’s sports and coaching franchises also have potential as do franchises that capitalise on the latest fitness trends like Bollywood dancing and extreme spin classes. Pure Gym and Anytime Fitness are evidence of how this can work.
Venue booking platforms
Startups.co.uk predicts the booming sharing economy will make launching a venue booking platform a good business opportunity this year. Mintel in its European Consumer Trends 2016 report notes that a rising number are creating sharing solutions to "maximise the usage and availability of temporary, transient space for storage, parking, working and sleeping".
While businesses like Airbnb, “unhotel” Onefinestay and home exchange club LoveHomeSwap have been successful targeting travellers, new ventures like Headbox, Appear Here and Vrumi which target companies and business owners are now entering the market in response to the dwindling supply of UK office space.
Smart products
Smart products is another area tipped to be big in 2016 as the ‘Internet of Things’, innovations that give everyday objects network connectivity allowing them to send and receive data, grows. Juniper Research estimates the 'Internet of Things' market will be worth £1.17 trillion by 2020.
The great news is it doesn’t take a rocket scientist to innovate in this area. Simple tweaks like sticking a sensor in something or making it Bluetooth enabled can make something ‘smart’. On Kickstarter for example there’s smart luggage Néit, which is GPS enabled to keep track of it on your travels, while Smarter has announced plans to produce a FridgeCam, a camera which can be fitted to your fridge door and give you a snapshot of what’s in your fridge when you’re out.
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