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Coworking Space Industry Research and Analysis

As opposed to twenty years ago, many more people are making their living as a freelancer or independent entrepreneur. Given the prevalence of the internet, the ability for individuals to make a living on their own has expanded rapidly. As such, many of these people require a small amount of office space if they need to meet clients/customers and do not want to conduct these operations out of their home. Additionally, some independent entrepreneurs and freelancers prefer to work outside of their homes in order to avoid distractions while enjoying the camaraderie of people that operate in a similar capacity. This strong demand has allowed real estate firms to develop coworking styled office spaces that allow for low costs for small office space.

One of the most important aspects to this industry is that these firms generate much higher returns on investment as opposed to standard commercial leases. However, on a per square foot basis – the rental fees are generally much higher. This is primarily due to fact that most coworking spaces (or shared office spaces) do not require long term commitments. This creates a moderately higher degree of risk for the owner-operator of the coworking space. Additionally, most coworking spaces include numerous amenities as part of a flat rate program. These amenities often include high speed internet, complimentary snacks, access to conference rooms, and other benefits. This is usually done in order to create a competitive advantage over other coworking space providers.

As it relates to geographic location, these types of businesses are very popular in major metropolitan area markets where large scale commercial office space is extremely expensive. Major metropolitan areas where coworking spaces are prevalent include New York, San Francisco, Miami, Los Angeles, San Diego, and Chicago. In markets where startups are popular, coworking spaces can be found frequently.

As it relates to the industry, there are approximately 2,000 companies that provide office space in a “coworking styled” capacity. Each year, these businesses aggregately generate $3 billion per year. The year-on-year growth of this industry has remained near 6% in each of the last five years. This rate of growth is substantially higher than that of the economy as a whole as well as for the commercial real estate leasing industry. This trends is expected to continue for at least the next ten years. It should be noted that the revenues of coworking space industry is very sensitive to negative changes in the economy. During recessions, many freelancers will turn to becoming employees of established businesses. This causes demand for rentals to drop substantially. As such, coworking space companies often need to keep a substantial amount of cash on hand to deal with low occupancy rates.  

In order to remain economic stability, well capitalized firms will often seek to purchase the building that houses these operations. This allows for a mix of coworking space rental income coupled with standard long-term leases. This often alleviates the risk associated with leasing a facility with the intent to subdivide it into coworking spaces. Most financial institutions are very welling to provide the necessary capital in order to acquire a commercial building for this purchase given that real estate is excellent collateral for a debt obligation.

Overall, the industry outlook for this industry is moderately strong. The returns on investment can be substantial during times of strong economic growth. As more people become part of the “gig economy”, the demand for shared office space should remain stable. Only severe and prolonged economic recessions have a major deleterious effect on these businesses ability to generate revenues and profits.

Insurance Agency Industry Research

For all aspects of life, most people want to have some form of insurance. This includes home insurance to protect a residence against catastrophe, car insurance for the same reason, as well as ancillary insurance lines including general property & casualty, life insurance, and supplemental insurance. Given this demand, the number of underwriters and insurance agents has exploded over the past thirty years. Additionally, as many more people are now entrepreneurs – the demand among business owners to have comprehensive insurance is substantial. Almost all businesses need to carry some form of business liability insurance while concurrently having often state-mandated workman’s compensation insurance. Nearly all states require that purchases of insurance are conducted through licensed insurance agents that have production licenses.

Within the United States, there are more than one million actively engaged in the sale, marketing, and production of insurance. The aggregate revenues generated by these agencies remains around $150 billion per annum (which includes fees from the issuance of new policies as well as recurring fees). One of the strongest aspects of this business is that recurring fees are continually generated when an initial customer renews their policy on an annual basis. For established insurance agencies, this allows these businesses to remain profitable and cash flow positive in any economic market.

One of the other core trends within this market is to maintain an expansive presence online. This is due to the fact that most people now find local and regional service providers via internet searches. Most independent agencies aggressively use search engine optimization campaigns coupled with social media in order to boost traffic to their respective websites. This is a highly competitive market, and any online marketing advantage that an agent can have always provides them with a strong foothold within their respective region. Many insurance agencies often spend nearly 8% to 10% of their aggregate revenues on marketing expenditures. This includes traditional marketing costs such as sponsorships of schools and local charitable organizations. Many insurance agents maintain very strong connections with their local community.

It should be noted that the vast majority of insurance agents operate in an affiliated capacity with a major underwriter. The draw to this method of operation is that the ongoing marketing expenses are substantially reduced given that the agent can use the brand name of the underwriter in conjunction with their marketing operations. However, this does limit the types of insurance lines that can be offered given that the affiliated underwriter requires that only their products are offered to prospective and ongoing clients. By operating in an independent capacity, an insurance broker or agent can provide a much greater spectrum of choice to customers. This is one of the reasons why independent insurance agents and brokers are able to have a competitive advantage over affiliated agents. Given the complexity of insurance, the demand for agents that understand this market, how to properly insure property, and how to do this cost effectively – is substantial.

Although many people now use online based portals for specific types of general insurance (such as auto, home, and whole/term life insurance), more complex scenarios and business insurance nearly always requires the assistance of an insurance agent. This need will continue indefinitely.

Food Truck Industry Research

Food trucks have exploded in popularity over the past ten years as more people have become food enthusiasts. Unlike a traditional restaurant, a food truck is a relatively low cost way for an entrepreneur to enter the food and beverage business. Most importantly, these businesses reduce their operating risk by being able to travel to different locations on an ongoing basis. Many food trucks generate substantial revenues by attending events that showcase a broad array of cuisine to event-goers.

Currently, nearly $2 billion of revenue is generated each year among food trucks. This represents less than 1% of all revenues generated from food and beverage businesses within the United States. It should be noted that this figure only includes businesses that operate in a mobile capacity only and does not include restaurants that operate food trucks as part of an overall brick-and-mortar operation.

Over the past five years, the industry has grown by nearly 525%. This trend is expected to continue in perpetuity given the low start up costs and low barriers to entry. One of the common trends within this industry is to maintain an expansive presence on the internet via a proprietary website as well as through a number of social media platforms. Many food truck entrepreneurs update their social media pages (FaceBook, Twitter, and Instagram) with the general location of the vehicle on a daily basis. Some companies have taken to integrating GPS tracking functionality so that a potential customer can quickly drive to the food truck’s parked location for breakfast, lunch, or dinner.

One of the other major trends among food trucks is to develop applications that allow for users to receive push notifications when they are nearby a food truck that they enjoy. This type of functionality is typically reserved for food trucks that have already developed an expansive fan base. Generally, the cost of developing this application ranges from $2,500 to $5,000 depending on the level of functionality integrated into the platform.

An additional major driver of expanded functionality among food truck companies is to provide large scale onsite catering. This is method of growth is popular among food truck companies that specialize in general fare such as BBQ. Major restaurants that offer onsite catering services will frequently use a food truck styled vehicle in order to carry out these types of operations.

Competition within the food truck industry is growing substantially, and the industry grows at an average rate of 5% (which is substantially higher than general economic growth). The growth of the industry is primarily attributed to a resurgence in interest of unique foods among the general public (with many televised programs created to showcase this aspect of the food/beverage industry). Even major celebrity chefs have shown a substantial interest in food trucks.

Overall, a food truck is a strong way for an aspiring restaurateur to enter the food and beverage industry while maintaining a low overhead and low risk for their venue.

7 Recession Proof Businesses and Industries

While there are many different types of companies that have their revenues subject to economic fluctuation, there are a number of businesses that are generally considered to be recession proof. In this article we take a look at the different types of companies that always tend to generate substantial revenues and profits in any economic climate.

Accounting and bookkeeping services

Given the complexities of tax laws as well as the difficulty in maintaining a proper set of financial records, accountants, bookkeepers, CPAs, and enrolled agents are always able to generate revenues for their services. Regardless of how the economy is doing, people are always going to be required to file tax returns to both federal and state taxing authorities. As such, the demand for these services does not wane during economic difficulties. These businesses are able to generate very high gross margins from the per hour fees that are associated with completing bookkeeping, managing payroll, filing tax returns, and engaging in other activities that are common to this type of business.

Funeral Homes

It is the unfortunate fact of life that everyone will pass away at some point. Even during times of economic recession, people will continue to pass away and require the services of funeral homes and funeral director businesses. These companies are always able to generate substantial revenues from mortician services, sales of caskets, cremation services, as well as making arrangements for funeral services. These businesses typically are the most stable industry given the fact that they are able to thrive in any economic climate. The start up expenses associated with the new funeral home are considered to moderate, and these businesses – given their strong level of economic stability – have readily available access to capital from banks and financial institutions. Almost all lenders are willing to provide the necessary money needed to establish a new funeral home business.

Healthcare Practices

Healthcare practices which include doctors, dentists, nurse practitioners, and allied healthcare professionals are always able to produce substantial income for their owners given the demand for the services in any economic climate. One of the interesting aspects of this type of business is that they enjoy very high barriers to entry given the fact that the practitioner must have completed a substantial amount of education while conforming to a number of licensing requirements. As such, this is not a business that can readily be started by any individual that is looking to become an entrepreneur. As it relates to licensed healthcare practitioner seeking to establish their own practices, almost all financial institutions are willing to provide nearly 100% of the capital necessary in order to establish a new medical, dental, physical therapy, surgical, or related healthcare business.

Information Technology

Given the ubiquitous nature of the Internet and secure information technology networks, the demand for IT consulting firms and IT networking companies is substantial. These companies always generate highly recurring streams of revenue given that they typically operate on a month-to-month service contract with their clients. For entrepreneur that is looking to establish a recession proof business, this is an outstanding opportunity. There is no formal licensing or educational requirements in order for company to hold itself out as an IT consulting firm. Additionally, many of the instructional courses needed in order to provide comprehensive IT services can be acquired from a local community college. Additionally, there are substantial online resources where an individual can quickly become trained in the field of information technology. These businesses have minimal startup costs, and they can be started for as little as $10,000 if the owner-operator establishes a very small office and primarily works at the site of clients.

This is one of the fastest growing industries within the United States, and it will continue to become one of the largest and most profitable industries over the next 20 years.

Pet Care Businesses

As many people own dogs and cats, the demand for comprehensive dog walking, pet sitting, and general pet care businesses is substantial. Yearly, more than $50 billion is generated on services specific for pets that live in the homes of their owners. These businesses have next to no startup costs given that an individual can simply establish a small website, distribute business cards, and post flyers in community centers in order to create a local brand-name. Once established, these businesses are able to generate highly predictable streams of revenue from the daily services rendered to the client base. Additionally, these businesses are very scalable as additional pet care technicians can be hired to render services to a greater number of clients.

Retail Entertainment Businesses

Although retail entertainment businesses, such as arcades, bars, and related entities offer a service that is not a necessity – these businesses are almost always able to generate substantial revenues and profits given that they are low-cost form of entertainment. During sharp economic declines, many people will opt to go to retail entertainment facilities rather than taking an expensive vacation. As such, the high gross margins generated from services allow these businesses to provide entertainment that is affordable in all economic climates. One of the recent trends among these businesses, especially among arcades, is to develop a membership base that allows individuals to pay monthly fee in exchange for being able to access the facility on an ongoing basis. These recurring streams of revenue further add to the economic stability of these companies.

Commercial Cleaning Services

Most commercial enterprises need to have clean and neat offices in order to attract a customer base. Most commercial cleaning businesses often provide their services on a monthly contract basis, which allows them to generate highly recurring streams of revenue. Additionally, many wealthier homeowners – who are less swayed by negative changes in the economy – are typically always able to afford in-home cleaning services. As such, these businesses are generally able to remain profitable at all times given their strong demand among commercial, residential, and industrial clients. These businesses do have moderate sort of costs, but these companies can be found for about $50,000 depending on the type of equipment and vehicles that we purchased for the start up.

Specialized Contractors

In any economic climate, individuals are going to continue to have issues with their homes and buildings that they own. As such, most contracting focus businesses are able to continue to remain profitable in any economic climate. It is no secret that homes will often have certain appliances and systems that break down, and regardless of how the economy is doing – people are going to need repair services for the systems. Specific types of contracting businesses attend always remain profitable include HVAC contractors, roofing contractors, plumbers, electrical contracting businesses.

10 Best Business Opportunities in Philadelphia

Within Philadelphia there are a number of exciting business opportunities that an aspiring entrepreneur can capitalize on given the rapid growth of this market. In this article, we discuss several different types of businesses and services that are in demand within Philadelphia:

Restaurants, Bars, and Nightclubs

Foremost, one of the most exciting areas to enter within the Philadelphia market is the food and beverage based businesses. Given the large population, there is always a substantial demand for food as well as nighttime entertainment. Within many of the major up-and-coming areas of Philadelphia, there are a number of people that are interested in experiencing unique cuisines. Additionally, the demographic profile of the Philadelphia metropolitan area is now skewing towards younger people. As such, the demand for nighttime entertainment – which includes bars, sports bars, nightclubs – is fast growing. As more and more young people move into cities in order to find higher-paying jobs, the demand for quality venues for nighttime entertainment and eating become greater. In many areas of Philadelphia, there are still retail locations that can accommodate a large-scale food and beverage business affordably.

Professional Cleaning and Janitorial Services

Given that there are many busy professionals within the Philadelphia area, the demand for clean houses and offices is substantial. As such, janitorial and home cleaning services are another very popular and economically viable business that can be started at a moderate cost within the greater Philadelphia area. One of the nice things about these businesses is that they generate highly recurring streams of revenue especially when companies engage in janitorial services for commercial and industrial enterprises. Given the high median incomes of the Philadelphia market, especially among busy professionals, the demand for quality in-home cleaning services is also very significant. These businesses can be started for as little as $50,000 and they typically become profitable within the first year of operation.

Accountants, Lawyers, Doctors and Dentists

The large population base of Philadelphia lends itself to having a number of professionals that need to render services to the general public. This includes practices such as CPAs, attorneys, physicians, surgeons, and dentists. In major metropolitan areas, the demand among licensed professionals is always substantial. Additionally, the per-hour billings are typically higher than that of when these services are rendered in a suburban or more rural market. One of the other interesting things about these businesses is that they enjoy high barriers to entry given the substantial educational requirements of the owner.

Personal Transportation Services

Transportation services are also extremely popular in major metropolitan areas; especially Philadelphia which has a substantial issue with the amount of parking that is available for residents. Given that this is a major metropolitan area, many people opt to not have a car when living or residing in the greater Philadelphia metropolitan area (and especially within the city limits). As such, taxi services, limousine services, and other companies that maintain large fleets of vehicles for personal transportation are almost always profitable in this market. Additionally, with the advent of applications such as Uber and Lyft – these businesses can immediately begin to generate revenue once they acquire their vehicles.

Freight Transportation


Trucking and transportation businesses are also extremely important in the Philadelphia area given that many wholesalers and retailers need to move large amounts of merchandise throughout the city. Much like transportation companies that focus specifically on individuals that need to get from point A to point B – freight services are another highly profitable and highly economically stable business within the Philadelphia metropolitan area.

IT Consulting and Networking Services


Given that the greater Philadelphia market has a substantial business startup scene, the demand for high quality information technology services and information technology consulting is also significant. One of the nice things about owning an IT focused business is that they almost always generate highly recurring streams of revenue on a month-to-month basis for service contracts. These businesses are able to provide secure networks especially for businesses that handle a substantial amount of sensitive materials. One of the other great things that these businesses is that their revenues are completely immune from negative changes in the economy given that both companies and individuals need to have properly installed and maintained networks in their businesses and homes. This will continue to be a major source of growth within the Philadelphia area.

Coworking Spaces and Rentals


As relates to real estate, co-working locations are also very popular in this market. This is due to the fact that many people now work as freelancers or as small entrepreneurs and need to have office space on a short-term basis. Coworking companies have become extremely popular in almost all major metropolitan areas given the trends of more and more people working within the gig economy rather than having a full-time job. These businesses typically have moderate startup costs depending on whether or not the owner acquires the building that is going to be used as a co-working space. However, one of the slight downside to these businesses that during times of economic recession – their revenues often suffer a bit given that more people will seek to have full-time employment rather than operating as a freelancer or independent entrepreneur.

Real Estate Agents and Brokerages


Further into real estate, real estate brokerages are almost always able to remain profitable and cash flow positive in the Philadelphia market given that people are always looking for business space, home rentals, and to purchase a real estate. This is one of the most mature industries within the United States, and their revenues typically mirror that of the general economy and the housing economy as a whole. Given the substantial demand for real estate within this market, almost all real estate agents and brokers are able to make a decent living providing the services to the general public.

Property Management Firms


Finally as relates to real estate, property management firms are very much in demand in Philadelphia. There are a number of companies as well as wealthy individuals that own a number of properties that need to be properly maintained on a month-to-month basis. Property management firms always earn a highly recurring stream of revenue from providing the services on an ongoing basis. One of the common trends within this industry is to offer flat rate property management services rather than taking a standard 10% of aggregate rental fees. This is one of the ways that many newer property management firms are able to effectively compete with established companies within these markets. For individuals or companies that have the proper license to operate as a property manager business – there are substantial and lucrative opportunities in the Philadelphia metropolitan area for companies that want to be engage in this type of activity.

Pet Care Services


As with the rest of the millennial generation, pets have become an important part of daily life. Many people between the ages of twenty to thirty-five have decided to either not have children or start a family much later in life. As such, many people acquire a dog or cat in lieu of starting a family right away. As such, the demand for quality pet care services – including daily pet walking services – is substantial in this market. Although some people do bring their pets to work, this is very uncommon and most pet owners need to have their dog cared for during the course of the day while they are at work. As such, a pet care agency that offers both pet walking services as well as overnight care can be a highly profitable business for an entrepreneur that is looking to start a low-cost business. These companies are highly scalable.