Source: US Bureau of Labor Statistics
The Signal: Tradespeople are in high demand. A 2018 report found that skilled trade positions such as mechanics, electricians, welders, pipe fitters, and carpenters were found to be the hardest roles to fill globally and in the US for the 6th year in a row.
One of the main reasons for the shortage is age. For every skilled tradesperson entering the workforce, there are 5 who retire. As many as 32% of billion-dollar manufacturers estimate they’ll lose $100m+ over the next ~5 years as Baby Boomers put down their tools.
Reddit-Confirmed Opportunities: In a recent Reddit post that has 350+ comments, a user asked:
“What are some profitable and high demand businesses [dominated by] mostly older people that are near retiring? What are some businesses that someone could start now and be doing well in the next 5-10 years because most of the current business owners are getting old?”
Unsurprisingly, the thread is littered with examples of various trades, some of which we have highlighted below. They might not be sexy but they are profitable, according to Redditors. What’s more, they are often overlooked by younger tech-hungry entrepreneurs.
According to Thomas Edison, “Opportunity is missed by most people because it is dressed in overalls and looks like work."
Whether you are in the market to buy a business or start your own, skilled trades may be a good place to look.
The COVID Opportunity: Demand for tradespeople has not only recovered in recent months; it is surpassing pre-pandemic levels. According to Australian tradesperson-matching website ServiceSeeking, searches for tradespeople from January to September 2020 are up from the same period last year:
- Rubbish removal: +168%
- Carpet cleaner: +80%
- Door installer: +71%
- Arborist (tree carer): +42%
- Roofer: +23%
Although lockdown restrictions are beginning to ease around the world, plenty of homeowners continue to work from home, with many taking the opportunity to make improvements to their properties. Some pandemic-inspired niches that may offer an attractive route to market include:
- Creating office spaces: Basement and loft conversions into office spaces are gaining popularity.
- Soundproofing: Creating quieter and less distracting workspaces requires soundproofing -- especially for those with remote-learning little ones.
- Getting closer to nature: Demand for garden rooms, orangeries, and conservatories is spiking. Demand for window fitters is also surging as people look to enhance natural light and ventilation in their homes.
Trade school programs and apprenticeships: In a recent survey conducted in the UK, 78% of existing tradespeople surveyed think it’s crucial the industry recruits more apprentices, and 74% believe there needs to be more support for apprentices.
With an estimated 31m skilled trade positions that will be left vacant in the US by the end of this year thanks to Baby Boomer retirements, the opportunity is ripe to provide training platforms, materials, and content to help fill the gap stateside.
There is also an opportunity to create an apprentice/mentor matching platform that helps aspiring tradespeople connect with established mentors in the industry. This could function as a standalone service or as part of a larger trade school training offering.
You could also create a specialized job board for the different industries. Read our deep dive into how top job boards make money for inspiration.
Other support services: Good news for the tech junkies out there: The same UK survey found that 100% of tradespeople who have been working in the industry for less than 2 years are fully comfortable with using technology, compared with the industry as a whole, where only ~75% are comfortable with tech.
This suggests that in years to come, tradespeople will be more likely to use technology solutions to solve some of their biggest challenges, creating opportunities for entrepreneurs to build products and services custom-fit for growing industries.
For tech-savvy tradies, time-saving and money making are their main motivation to adopt new tech. They reportedly use tech to:
- Browse merchant/manufacturers’ websites (66%)
- Purchase products (61%)
- Complete finances (40%)
- Find online training/webinars (34%)
- Complete admin (31%)
- Access loyalty schemes (26%)
One idea: Create a tool that makes it easy for tradespeople to keep track of their receipts and log expenses. Why? Another UK survey has found that nearly a fifth of tradespeople lose money due to poor financial admin, which equates to ~£929m (~$1.2B) in losses across the industry as a whole in the UK.
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