Since 2020, the number of new businesses formed in the US has remained higher than in the previous decade. In fact, according to the US Census Bureau, new business applications have increased by 20.6 percent between 2020 and 2021. As a result, the demand for small business insurance coverage has expanded.

In many ways, the fallout from the pandemic created a prime environment for new small businesses. As early as April 2020, unemployment rates, particularly in hospitality, service, and other high-contact industries, more than tripled. This created a necessity for new opportunities. Luckily, increased dependence on technology created new possibilities and streamlined e-commerce and website creation platforms, which made forming a business easier than ever.

The success of these new businesses seems to vary across different industries, with some companies based entirely online and others offering in-person services. Here are four types of business that have become some of the most popular—and the most profitable—in the last few years.

eCommerce

ECommerce businesses are among the most popular companies formed in the last few years. Typically, it costs less than $1000 to open an eCommerce business. A domain runs about $10, and a Shopify account costs $30 per month.

Since 2019, eCommerce transactions have increased by 77%, and during the pandemic alone, eCommerce sales rose to $870 billion. According to the International Trade Administration, eCommerce sales are expected to make up nearly 22% of all global retail transactions by 2024.

Still, the growth in the eCommerce industry has also led to increased competition. Small business owners who have built successful online stores often did so by optimizing their websites for mobile browsing, which accounts for more than 26% of conversions, and using social media and email marketing strategies.

Food trucks

The food truck industry has been picking up steam for more than five years. When the pandemic limited indoor dining, many entrepreneurs with dreams of running a restaurant turned to food trucks. That growth is expected to continue, with a Grand View Research report projecting that the food truck market will be worth more than $6.5 billion by 2028.

The great news for small business owners is that the overhead for these businesses is relatively low. Nerd Wallet reports that starting a food truck business costs about a third of what it costs to open a traditional restaurant. The savings continue, as food trucks typically offer more focused menus, and entrepreneurs don’t have to pay expenses associated with maintaining a building.

If you’re looking to open a food truck, it’s worth doing some market research, as more metropolitan areas can be particularly competitive and may have stricter regulations. You’ll also want to check that you comply with all local ordinances, business license requirements, and safety standards. You’ll probably be required to carry small business insurance as well.

Construction

Early in the pandemic, the construction industry was negatively impacted, with nearly 70% of companies reporting some level of decline in business due to lockdown and restrictions on face-to-face business. However, the industry seems to be improving and is looking to grow in 2022. Construction and engineering businesses are also expanding into new markets.

New builder and developer firms have been founded in the last few years using augmented reality technology, automated measuring, and simulated architectural and structural changes. These advances have allowed architects, engineers, and builders to survey sites and collaborate on construction without the need to be onsite. Newer companies in the industry have also shared an increased focus on innovation. For example, renewable energy has become increasingly accessible in the construction industry, since 2019, with trends like greenscaping increasing in prominence.

The pandemic also encouraged the rise of mobile applications in the construction industry so that teams could collaborate and even participate in worksite inspections without physical access to spaces. Overall, the pandemic is thought to have accelerated the construction industry’s adoption of building information modeling technology.

Consulting

Consultants usually provide solutions for other business owners, often specializing in a niche like marketing, human resources, or accounting. Other businesses will pay consultants for their knowledge and expertise in their field, and consulting offers subject matter experts an appealing opportunity to be in business for themselves.

According to the Bureau of Labor Statistics, the demand for consulting services is on the rise, particularly among other small businesses. In 2022, the global professional services industry is expected to increase at a compound annual growth rate of 10.9%.

With the rise in telecommunication use during the pandemic, consulting has become even more accessible. Independent consultants can speak at industry conferences, serve on a board of directors, and even participate in shaping business strategy, all while telecommuting from home.

No matter the business, protect your investmentIf you’re looking to start your entrepreneurial journey, you’ll need to start with a solid foundation. Among the necessary paperwork for taxes, licenses, and business plans, don’t forget to talk to your Westwood agent about small business insurance. The right coverage can give you peace of mind so you can focus on your business.

Please Note: This article is for general informational and educational purposes only. It does not represent any specific insurance policy and does not modify any provisions, limitations, or exclusions of any current policy.