Every year, the Inc. 5000 honors the movers and shakers of American business. As you’ll see from the 2019 list, some sectors contain more high-growth companies than others. Listed companies are judged by their 2015-2018 revenue growth percentage. They must also have been U.S.-based, privately held, for-profit and revenue-positive prior to March 31, 2015.
The point is, high-growth companies don’t just get that way because their industries are on an upward trajectory. In fact, they themselves can fuel their industries’ growth by the sheer force of their success. A solid handful of the Inc. 5000 executives I spoke to this year said they saw an uptick in industry demand after their own growth exploded.
If you’re thinking about starting a new business in 2020, perhaps take a look at these high-growth industries:
1. Business products and services
Weighing in at nearly a tenth of the total list, the business products and services category is full of Inc.-ranked companies. Around 50 of those companies rank in the top 500, requiring a three-year growth rate of nearly 870 percent.
Top businesses in the category include Dropified, an automation platform that e-commerce firms use to manage drop-shipping products. Another business service company, Support Ninja, allows companies to outsource everything from customer support to content moderation.
Why has the business services sector exploded? Because the space is both profitable and diverse. The SaaS model, in particular, has opened up all sorts of opportunities that did not exist even a few years ago.
2. Advertising and marketing
With nearly as many companies as in business products and services, at 489, advertising and marketing has been dominated in recent years by niche agencies. As the agency-of-record model disappears, power is shifting from conglomerates like Omnicom to tactic-specific shops.
Companies in this category post some of the steepest growth rates of the Inc. 5000. No. 1, in fact, is Freestar, a content promotion company that achieved 36,680 percent growth between 2015 and 2018. Brill Media, a data tool that helps small companies hyper-target local markets, managed 2,466 percent growth with just five employees. All told, 46 firms in this category grew by 1,000 percent or more.
Advertising and marketing is booming partly because of the new tactics tech has enabled. Areas like SEO, programmatic advertising and social media influencing are catching attention in ways newspaper and radio ads simply don’t.
Many of the companies responsible for bringing technologies like machine learning to the healthcare industry are small, fast-growing firms. The 356 companies included in this section run the gamut, from veterinary management firms like Petwell Partners to supplement manufacturers such as Lief Labs.
One of the hottest spaces in this category? Employee wellness. Despite being more than a decade old, Wellworks for You more than doubled its revenue during the covered period. As enterprise companies work to cut their healthcare costs, they’re turning to self-serve tools and behavioral incentives.
Check out all the new wellness services on the market: Everything from personalized fitness plans to meditation programs can help you attract and retain talent.
4. Financial services
The financial services space includes more than just national banks. Many of the upcoming names in finance are small fintech companies, peer-to-peer lending platforms and financing solutions for e-commerce sellers.
Topping the Inc. 5000 financial services category, at No. 17 with more than 10,000 percent growth, is YieldStreet. YieldStreet packages up loans backed by collateral with relatively little correlation to the stock market, such as contemporary art collections and seafaring vessel deconstruction. A close second is Lending Point, an online lender that helps credit-challenged customers build better financial habits.
A combination of relaxed financial regulations and new tech is responsible for all sorts of new investment and funding opportunities. Companies can crowdsource funding and apply for loans, all from the comfort of the office.
5. Human resources
Thanks to new benefits offerings and the low unemployment rate, the HR space has grown by leaps and bounds in recent years. Startups like Paytient, which provides deductible credit to workers who need help paying for services like healthcare, are enabling employers and brokers to think differently about their benefits packages.
Two other active areas are staffing and payroll outsourcing, which some providers now bundle together. TalEx, ranked No. 50, offers employer-of-record services as well as staffing and full-time recruiting assistance.
Others, like government IT consultancy IBEX IT Business Experts, which grew more than fivefold in three years, straddle multiple sectors. Although only 157 companies are listed in the HR category, it would be larger if it included companies that pair HR work, like employee training, with tech or other services.
What Leaders Can Learn
There’s a reason the Inc. 5000 makes such a splash every year: It’s a glimpse at what today’s industries will look like tomorrow.
What does this year’s Inc. 5000 list say about doing business tomorrow? It shows a trend toward high-tech, cross-industry and employer-oriented services. If starting a new company is on your list of New Year’s resolutions, be sure it ticks those boxes.
Think, too, about where growth lies for the services you buy for your business. There may be new ones available in areas like employee benefits, marketing and process automation. Realize, though, that vendors in those spaces may be prone to growing pains.
As this year comes to a close, I’m excited to see which companies make 2020’s list — and change industries as we know them now.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.