Lucrative Sectors SA Entrepreneurs Should Be Looking at in 2016 and Those to Avoid

Posted on January 14th, 2016

Lucrative sectors SA entrepreneurs should be looking at in 2016 and those to avo“New sectors will offer fertile ground for entrepreneurs to start businesses in 2016,” says Christo Botes, executive director of Business Partners Limited, a specialist risk finance company.

Botes predicts new opportunities in growing industries such as the green and education sectors – with constant favourites such as tourism and manufacturing continuing to be lucrative industries for entrepreneurs to venture into this coming year.

There are, however, industries that will struggle. Botes predicts that the mining, agricultural and retail sectors will take a knock.

Here are Botes‘ predictions for industries that will offer fresh prospects, old favourites that will continue to do well and the industries which will come under strain in the coming year.

New industries = new opportunities

The green economy is becoming a real sector to consider, says Botes, and should be an area of focus “for both existing businesses and also in potential new business ventures,” he says.

Here are some ideas from Botes in the sector:

1. Better waste management systems ideas

  • Split waste at source in your business and instead of paying for waste removal you will be paid for your waste.

2. Business opportunities to handle the recycling of waste from source is a reality and could also be a great employment creator, including:

  • Glass bottle collection, washing plants and redistribution into the market
  • Paper collection, pulping and the production of recycled paper products
  • Plastic collection to pelleting plant and on to plastic extrusion and blow-moulding plants using recycled plastic pallets as a raw material on scale

3. Better water management practices, including:

  • Fresh water and grey water uses in your business and how to deploy it in your business
  • Businesses specializing in installing the equipment and infrastructure for the different water supply lines in your business

4. Energy efficient technologies versus current energy intensive technologies, including:

  • Use of the sun and the wind
  • Low energy heating equipment
  • Low energy equipment in general for any business
  • Long-life rechargeable batteries/energy storage facilities

Education is key

The education sector also offers opportunities for entrepreneurs, says Botes.

“Education and training is another sector undergoing transformation at various levels from pre-school, primary, secondary and tertiary institutions specialising in not only the traditional curriculums but more specialised technical training that is industry specific and could be short courses building up credits for further qualifications.

“The traditional route of a degree or diploma at a university or college will still have its place, but should not be the default for each and every young person.”

Old favourites

Some popular industries will continue to offer opportunities, says Botes.

“In the current weak economic conditions with a weakening rand, rising interest rates and inflation increases likely to follow we should look at the following favourites.”

Here are established industries that still offer opportunities, according to Botes.

– Business and leisure tourism should be promoted like never before as the weak rand should draw foreign visitors. Do not forget the industries linked to tourism such as hiking, mountain biking, para-gliding, rock climbing, sand boarding, vehicle and motorbike renting, kayaking, sailing and many more  activity based activities that should be available on the menu of offerings to tourists.

– Manufacturing should grow in certain sub-sectors where capacity might already exist, but could be converted and/or used to produce products replacing currently imported products due to the weak rand exchange rate.

– Manufacturing should grow in certain sub-sectors where export opportunities are now much more viable due to the weak rand against the currencies of our trading partners.

Industries under strain

There will be sectors that will struggle, says Botes. These include:

– The agriculture sector will be battling due to the drought and downstream agricultural processing plants will struggle to add value and use their production capacity due to a lack of product and the excessive cost of the imported product.

– The mining sector remains under pressure due to weak demand for commodities in the world and a levelling off of demand from China

– Retail, in general, will struggle as consumer spending will be under pressure due to fewer job opportunities in a stagnant economy, weak rand exchange rate resulting in higher imported prices, rising interest rates resulting in higher debt servicing costs.

Retail in the rural  and semi-urban parts of our country will be under even more pressure due to the drought and farmers battling to survive and then also mining activities being lower due to less demand for the commodities worldwide.