If you’re thinking about starting or buying a business, it’s easy to feel overwhelmed by the amount of information available to you. In an economic climate that is constantly changing and still recovering from the effects of the Covid-19 pandemic, what makes a sound investment?
In this article, we’ve analysed the latest data and market trends to create a curated list of industries that have demonstrated growth and resilience in the UK in recent years. If you’re looking for business ideas that have the potential for high profits and often come with a lower level of risk, you’re in the right place.
We hope these suggestions can spark your imagination and kickstart your own research, setting you on the exciting journey to entrepreneurship.
The production of non-alcoholic beer and other beverages has seen a huge increase in demand over the past few years, becoming the fastest-growing industry in the UK. This has been driven by the prevalence of Dry January and changing attitudes towards drinking, especially in younger demographics. The industry’s total revenue reached £807.6m in 2023, with a Compound Annual Growth Rate (CAGR) of 30% from 2019 onwards.
Non-alcoholic beer consumption isn’t only limited to Dry January. In June 2023, Tesco reported sales of non-alcoholic beer were 25% higher than they were at the start of the year, representing a rise in demand that isn’t just seasonal. The British Beer and Pub Association also reported that sales of non-alcoholic drinks had risen by 23% from 2022 to 2023.
This growth represents an opportunity for budding brewers to 'tap' into a growing market with huge potential. Why not buy an existing brewery and launch a new line of alcohol-free drinks?
Tip: Target urban centres such as London, Manchester and Birmingham, or other areas with a high millennial and Gen Z population.
If you’re looking for a business idea that you can start from the comfort of your own home, e-commerce is a strong option. The market’s value in the UK is estimated at £222.14bn, and is expected to grow to £594.42bn by 2029 – a CAGR of 21.76%.
Tools such as Shopify, SquareSpace and WooCommerce can help simplify the process of setting up an online shop. To help stand out from the crowd and give you an advantage over others joining the e-commerce boom, specialise in products you’re passionate and knowledgeable about. Smartly targeted advertising campaigns can also make a big difference, if you know what your target demographic is.
Tip: Online sales of men’s clothing is one particular area that has seen a big spike in growth over the past five years, with total revenue increasing by 10.3% to £2bn in the past five years.
While the rise of e-commerce has been a prevailing trend in recent years, physical bookshops are one example of brick-and-mortar shops on an upward trend. Book sales in the UK hit £6.9bn in 2022 – the highest they’ve ever been – with more than 669 million physical books sold that year.
The rise in bookshops has been particularly prominent in London, which saw a 217% increase in newly opened businesses from 2017-2022. That makes it the fastest growing enterprise in the city, according to a study by Natwest.
If you’ve got a literary flair and want to hit the ground running with an existing business, why not have a look at some of the bookshops for sale on our website?
Tip: Running ticketed and community events can be a great way to attract customers, making your shop a social hub as well as a place to buy books.
Educational Technology, or EdTech, is an industry that saw large gains during the pandemic. Schools and universities joined the many businesses forced to quickly adopt remote and digital-first ways of working.
As a result, the sector received a big boost in investment: equity investment into UK EdTech companies reached close to £150m in 2021, more than double that of 2020 and 2021. In the Office for National Statistics’ latest ‘Business insights’ report from January 2024, businesses in the education sector also reported the highest expectations for increased turnover.
EdTech could comprise everything from online courses, learning management systems, AI-powered learning tools, cybersecurity and more. For those with a background in tech or a willingness to learn, it could be a lucrative business idea.
Tip: The UK government runs a Knowledge Transfer Partnership programme, which provides support and funding to EdTech companies, as well as connections with academic partners.
The hospitality industry has historically been one of the most significant in the UK economy. It is the third largest employer in the country, generating 6.5 million jobs directly and indirectly.
Although the industry was hit hard by the impacts of travel restrictions during the pandemic, it has been showing some signs of growth recently. In 2022, its gross value added (GVA) to the economy was higher than in 2019, at £214bn.
In the hotel industry specifically, there are plenty of opportunities for those who can get ahead of the curve and adapt to the changing landscape of travel. Domestic travel and ‘staycations’ are on the rise, while international travel has seen a dip. Customers are also increasingly mindful of sustainability when planning their stays.
Tip: Be prepared to face some operational challenges, such as labour shortages. Offering apprenticeships and training programmes to recruit new staff can be one way to offset these difficulties.
VR and Immersive Technology
Virtual reality and immersive technology is another of the UK’s fastest growing industries. Market revenue has increased by a CAGR of 18.1% over the past five years, reaching £2.8bn in 2023.
From gaming to engineering to simulation training programmes, VR and AR have a wide range of applications and will only increase in use as the technology becomes more widely adopted. The UK government has a number of funding and grant schemes in place to incentivise growth in this sector, making it a potentially lucrative idea for those with the right skills.
Tip: A background in 3D modelling and design software will go a long way, but it’s never too late to retrain – there are many certified learning courses available to help you become a VR expert in your spare time.
For a more accessible startup option, you could consider starting or buying a food truck. These compact, scalable businesses have a low cost of entry and are currently experiencing a surge in demand. They’re no longer just the domain of festivals and other events, but can be spotted on street corners across the country.
A used catering trailer could cost you as little as £5,000, while the premises lease to launch a restaurant is more likely to sit in the £50,000 range, according to the Nationwide Caterers Association. You should ensure you have a thorough business plan and know what your target audience is – location is everything when your business is on wheels!
Although food trucks are an accessible option, they do come with some challenges. Be prepared to work long hours to catch the widest audience possible, and manage unpredictable factors like weather and footfall.
Tip: A snappy name and a strong social media presence can go a long way – just look at the viral success of the ‘Spudman’ who racked up millions of TikTok views at the start of 2024.
Long wait times for NHS treatment, as well as a rise in the public consciousness around health and wellness, have driven increased demand for private healthcare in the UK. Offering alternative options for treatment, or auxiliary healthcare services like patient advocacy or life coaching, can tap into this growing demand.
Health and social work accounted for the largest increase in job numbers across all sectors of the UK economy in January 2024. The private healthcare market in the UK is estimated at £11bn, but there is still potential for growth – 55% of consumers in the UK have never used a private healthcare service.
Tip: Private healthcare in the UK is regulated by the Care Quality Commission, which ensures standards laid out by the Department of Health are met.
Ready to start your entrepreneurship journey?
If any of our ideas have got your creative juices flowing and you’re plotting your next steps to starting or buying a business, there’s a few things you should keep in mind.
Firstly, explore all your options when it comes to financing. Business loans, grants and angel investors are just a few of the options available to you to get your idea off the ground. Our Raising Finance guide breaks everything down into easily digestible information.
If you’re thinking of buying a business, don’t forget to do your due diligence. It might not be the most fun part of the entrepreneurship journey, but you need to know what you’re investing in, and make sure you’ve got all your bases covered.
If you’re going down the startup route and creating your own business, our startup guides can walk you through the process, step by step.
What are the most profitable businesses in the UK?
Some of the most profitable industries in the UK include banking, pension funding, construction contracting, legal activity and insurance.
What are the fastest growing businesses in the UK?
Non-alcoholic beer production, physical bookshops and VR/immersive technology are some of the fastest growing industries in the UK.
What kind of online business is most profitable?
E-commerce and educational technology (EdTech) are some of the most profitable online businesses in the UK.
What small business has the highest profit margin?
E-commerce businesses and food trucks are two types of small business that have the potential for high profit returns.
What is the easiest business to succeed in?
All businesses pose different opportunities and challenges, but businesses with low startup costs and expenses often come with lower levels of risk.