Over the past year, the strengthening housing market has been helping small businesses grow – and fast.
Sageworks, Inc.'s most recent analysis of companies with less than $5-million in annual revenues finds that four of the ten fastest-growing sectors of 2013 are related to housing.
Building finish contractors and real estate agents' offices saw sales grow by nearly 15 per cent over the past year. Architectural and engineering services, meanwhile, grew sales by 14.2 per cent, and foundation, structure and building exterior contractors' sales increased by 10.6 per cent.
Sageworks analyst Libby Bierman says the partial government shutdown had a "notable impact" on the number of mortgages being processed, which may slow the growth spurt.
But since the shutdown lasted only a couple of weeks, Bierman says it is unlikely to cripple these expanding businesses.
"It will show a slight blip, but not all revenue is tied to home mortgages. It will have some impact, but not something that in the long-term will put businesses out of business, most likely," says Bierman.
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Perhaps surprisingly, grain farming showed the strongest growth of all sectors analyzed by Sageworks, posting a nearly 20 per cent increase in sales.
"There was a drought in 2012, so they increased prices dramatically because the supply was cut so much," says Bierman, who says the sector was new to the list. Bierman predicts that grain farming is unlikely to make a second appearance on the list of fastest-growing small-business sectors, but says there's room for another surprise.
"I imagine we'll be seeing similar externalities that will change [the list]," says Bierman.
The full list of the fastest-growing sectors:
- Oilseed and Grain Farming
- Building Finishing Contractors
- Offices of Real Estate Agents and Brokers
- Architectural, Engineering, and Related Services
- Management, Scientific, and Technical Consulting Services
- Computer Systems Design and Related Services
- Other Fabricated Metal Product Manufacturing
- Utility System Construction
- Specialty Food Stores
- Foundation, Structure and Building Exterior Contractors
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