The best and worst small businesses to start in 2013

December 27, 2012

The past year brought continued financial woes for small businesses across a wide array of industries — but not all of them. In a select few sectors, business is booming and sales expectations are soaring heading into 2013.

Small agricultural companies and heavy-duty manufacturers are primed for some of the most rapid growth in the coming months, according to a new report from Sageworks based on financial data from thousands of firms with annual revenue below $10 million. Oil and grain producers, cattle ranchers, architectural and structural metal manufacturers and industrial machinery producers were among the fastest-growing small business sectors this past year (with employment services firms rounding out the top five), and each of them are expected to continue enjoying higher sales next year.

Gallery: The 10 fastest growing small business sectors

In each sector, small firms enjoyed average sales bumps of more than 20 percent last year, according the report. Among the most surpising on the list was the jump in sales for cattle ranchers, one analysts said, considering that many households have been tightening expenses and often cut back on that type of meat purchase.

“Interestingly, the increase may be partially a result of price increases seen in the oilseed and grain farming industry,” Sageworks Analyst Brad Schaefer said. “As grain prices increased, it appears that many cattle producers sold off larger percentages of their herds, thus increasing the sales growth for the industry.”

Gallery: The 10 slowest growing small business sectors

On the other end of the spectrum, real estate and construction firms continue to feel the squeeze of a lackluster housing market. Sales for small businesses in residential construction and real estate services increased less than 5 percent over the past 12 months. Meanwhile, the only sector in which small business sales declined in 2012 was land subdivision.

Death care services, dryclearners, golf courses and bowling centers were also among the sectors the report suggests are slowing heading into the new year.

For the full lists, please check out our galleries to see the small business sectors primed for growth in 2013, as well as the industries that are expected to endure another difficult year.

What is the outlook for your business this coming year, and what are you hearing from others in your industry? Please share your thoughts in the comments below.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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