– 2023 is set to see significant growth in several areas, including e-commerce, AI, hospitality and travel, and healthcare and wellness.
– To take advantage of multiple new business opportunities, intending investors can use LLCs as their investment vehicle.
The E-commerce industry will be among those with a strong showing providing numerous investment opportunities. Currently, one of every five retail purchases is made online, and according to Statista, the market is projected to hit $1,111.00bn in value by the end of 2023. There are plenty of opportunities, and small and large businesses can explore unsaturated niches from local to across-state markets.
Travel and hospitality
The travel and hospitality industries are bouncing back strongly from the pandemic and will be significant growth drivers. Revenue for the hotel and motel industry from 2023 to 2024 is projected to grow by 22.8%, boosted by the rise in domestic and international tourism. People are now acting upon planned holiday trips. The vacation rentals industry will also enjoy a 5.5% year on year on year revenue growth, and AirDNA projects occupancy levels of 56.4% in 2023.
With travel, there is considerable growth among tour operators, who expect a 24.4% growth in revenue. On the other hand, sightseeing transportation like helicopter rides, whale watches, bus tours, and cruises should see their revenues rise by 20.6%. In these cases, it is not just the people providing the services who will benefit but also industries around the services, including those who are selling and maintaining the various transportation means.
Green energy solutions
Green energy solutions will also enjoy high revenue thanks to demand and government incentives at the state and federal levels. The solar power industry, for instance, will be one of the fastest growing industries in the US in 2023 thanks to improvements in technology for electricity generation and government tax incentives and grants. Electric and hybrid vehicle manufacturing will also enjoy high revenue growth of about 22%, boosted by factors like a rise in sales as oil prices rose and environment-conscious buyers. The government is also investing plenty in infrastructure funding and providing incentives.
Artificial Intelligence
In 2023, the AI industry is expected to grow tremendously, raising its current valuation of $328.34 billion. AI’s applications impact various industries, including healthcare, transportation, and finance. 2023 should see AI further integrated into business, educational, and personal spheres.
These and more sectors provide numerous investment opportunities for private companies and individuals. One could use different business structures to pursue these opportunities, but the best one is using an LLC.
Potential benefits of using an LLC for investment
As this article best illustrates, an LLC is a unique blend of the positives of a limited partnership and those of a corporation. Due to this structure, it can offer unique benefits to an individual or a group of interested investors. The main ones are tax benefits and limited liability.
Limited liability
As its name suggests, an LLC offers liability protection to its owner or owners. In case of a lawsuit or debt claims against the business, the members are not personally liable. Only the business may incur losses to either creditors or other parties filing successful lawsuits. Your personal property is not touched as it is separate from the business. Sole proprietorships and partnerships do not offer this kind of asset protection, and thus you can lose your house, vehicles, and financial assets to meet debts and other claims against the business.
Tax benefits
LLCs enjoy several tax benefits, unlike other business formations. First is the federal pass-through tax on profits. With this benefit, the profits from the company go to the members without being taxed by the federal government at the company level. Members only pay tax on them in their individual income tax returns. This benefit helps them avoid double taxation. It also makes filing tax returns more effortless than if taxes were made at the corporate level.
Another benefit is the qualified business income deduction. LLCs are among the entities that benefit from it and can get a tax deduction of up to 20% of their qualified business income. LLCs can also claim tax deductions on business expenses, lowering the members’ income tax. Some tax deductions include startup costs, advertising, and insurance costs.
Conclusion
2023 is set to see significant growth in many sectors, especially e-commerce, travel and hospitality, Artificial intelligence, and green energy solutions. Experts recommend that businesses seeking to venture or expand in these sectors use an LLC structure. It is easy and affordable to set up and maintain, and it does call for numerous filings and holding shareholders’ meetings.
More importantly, it offers significant asset protection and tax benefits. Members of an LLC are not exposed to the risk of losing personal property, as is the case with sole proprietorships and partnerships. On the other hand, they enjoy tax benefits unavailable to corporations. Having the best of both options is a good foundation for launching your investments.
