The 3 Fastest-Growing Industries for Small Business
What do farmers, building contractors and real estate agents have in common? They're the three fastest-growing industries for U.S. small businesses, according to a recent study.
SageWorks, a financial information company, analyzed businesses with yearly sales under $5 million. Its October 2013 study found that 10 industries posted double-digit growth percentages over the previous 12 months.
Oilseed and grain farming topped the list with nearly 20 percent sales growth. Next were building finishing contractors - post-construction drywall, painting and flooring - at 15 percent. Real estate agents and brokers came in third, with 14.6 percent growth.
We spoke with local entrepreneurs in each industry to get their take on being ranked cream of the crop.
1. OILSEED AND GRAIN FARMING
David Black, co-owner of Heritage Farms, grows wheat, corn and soybeans - the holy trinity of oilseed and grain - on 1,350 acres in Charles City. His grandfather started the original farm in 1945. Today it's a limited liability company, run by Black and his father, George. As modern farmers, they use high-tech sprayers, self-steering tractors and sustainable practices such as no-till cropping.
Why did you choose this field?
I grew up in it. It's a way of life. You either love it or you don't. And if you don't love it, you don't do it.
What do you love?
The challenges. There's always a challenge. And it doesn't matter whether it comes from government intervention or the weather. That's the fun part. Even though we're technically doing the same things every year, as far as planting, it's different every year. And the idea of sitting in an office, I couldn't imagine. [Laughs.] It's being your own boss. And being outside.
How has the business grown?
Initially, when it was my grandfather and dad, it was a mix of cattle, swine and row crops. Swine were the first to go. Once I became more involved, the cattle were the next to go. I'm not a fan of livestock.
When my dad and I became a partnership, we expanded acres. When we went into the LLC, there was more expansion. In the last five years, we've relied more on equipment, getting away from having to use employees. That's my focus, to reduce the need and expense of employees. [Before], we could have anywhere from three to four, and now we have no more than 175 hours of part-time labor, between my dad and I. And we're farming about 50 percent more than 20 years ago.
We supply a grain that's not typically grown here on the East Coast. We're working with a durum processor, producing semolina flour for pasta production. We work with a [company] producing bread wheats. Our wheats are used for pastries, cake flours, gravy mixes. We're also pursuing some different avenues with barley for human consumption, and using some barleys that have higher starch and sugar content for ethanol.
Describe an industry-specific challenge.
Producing a profitable crop but also being [environmentally] aware and using practices to limit runoff or contribution to water-quality problems. It hasn't been cheap, but it makes you a better steward of the land and the rivers and streams in the bay.
Can you give an example?
It runs the gamut, from different types of testing with the soil to... how we plant using [fewer] pesticides. We're able to do things so much quicker and so much more accurately than we were able to even 10 years ago.
The crop sprayer is a prime example. Used to be that all the settings were done manually. You calibrated and hoped everything was running properly, but you had no way to verify it. The sprayer we have now [has] GPS, and literally it shuts itself on and off. It maintains the proper heights; it's mapping out every field you're spraying, so you can download it.
When I read that grain and oilseed farming is one of the fastest-growing industries, it blew my mind. I've always heard about the struggling family farmer. What do you attribute the recent growth to?
Actually it kind of threw me. I said, 'Wow, I didn't realize that.'
Well, in the last six years, [growth's] been driven by higher commodity prices, no question. Also, we have a global economy now.
U.S. production may determine prices for a certain amount of time, but then South America's flours start coming online in the winter. It's changed how a lot of us do our marketing, but it's also made it more profitable. Consequently, with the huge demand from China for soybeans, it's made it a lot more attractive to the younger generation that was actually leaving the farms.
Now we're in a downturn with the prices. How that's going to affect in the long term remains to be seen. But it is interesting to attend meetings and see a lot younger guys than you were seeing 10 years ago.
Click below to read interviews with local entrepreneurs in the next two industries: