Are you thinking of doing business in Alaska? If your answer is yes, then there’s an array of small businesses and investment opportunities you can find profitable to build your own empire in Alaska. A recent report from Wisevoter reveals Alaska as the eighth richest state in the US with a GDP per capita of $79,139 after Connecticut and Delaware which holds sixth and seventh position respectively.
Some experts say the geography of Alaska both creates and constrains opportunities for its economy. This means as the state occupies the northwestern portion of the North American continent, it makes room for the economy to bloom in certain industries better than others. It is one of the two states (Hawaii is the other) that shares no border with any other state except Canada to the east. Little Wonder is nicknamed the ‘last frontier’.
Meanwhile, Alaska is the largest state in the United States in terms of land area at 570,380 square miles (1,477,300 km2), over twice as large as Texas, the next largest state, and is the seventh-largest country subdivision in the world, and the third largest in North America.
What Are the Best Industries in Alaska?
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The major industries in Alaska include crude petroleum, natural gas, agriculture, mining (gold, copper, silver, lead, and coal), fishing, healthcare, financial institutions, and the growing tourism sector.
The petroleum industry is Alaska’s number #1 industry. According to the International Centre for Education and Training (ICET), the size of the industry is $4.7 billion and it creates 20 additional jobs in the Alaska economy. Every other industry is also represented yet the aforementioned industries have the best foothold in Alaska if you are willing to invest or start a business in the state.
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Is Alaska a Good Place for Business?
Several reports on Alaska’s economy reveal the state as being an average good place for business. Cato Institute, in a report last year after using 17 variables to rank states on freedom for startups reveals Alaska as 25th on the list of best states given to entrepreneurial freedom among the 50 states in the U.S.
In the past, Alaska’s economy used to be characterized by strict business restrictions, corruption, and poor entrepreneurial support for new startups. But, the economy has continued to improve as a result of the government’s pro-business strategy, a skilled workforce, a high rate of gross migration, and a remarkable quality of life.
Recently, it ranked among the most tax-friendly states organized by the Tax Foundation due to its no state-wide sales tax as well as no state income tax on personal income. This means new businesses have low and competitive tax incentives to enjoy.
10 Lucrative Small Businesses and Investment Opportunities in Alaska
Below are the 10 best small businesses and investment opportunities new immigrants from neighboring US States and other foreign investors can consider in Alaska.
1. Sales and Servicing of Fishing Equipment
The fishing industry is highly significant in Alaska to consider operating profitable businesses surrounding it.
You can start selling a wide range of fishing gear and accessories to anglers, both residents and tourists, who engage in various types of fishing activities within the state. The business also accommodates services for maintaining, repairing, and servicing fishing equipment. This is done to ensure its optimal performance and longevity. You will find this business very lucrative if you do your homework well and satisfy your target market.
2. Pharmacy Business
The growing population and the state’s healthcare needs provides great opportunities for clinicians, pharmacists, and other healthcare providers in Alaska. If this is your field, opening a pharmacy business can profit you big time.
Your pharmacy store can serve both urban centers and remote communities. This, you will do to provide access to essential medications and healthcare products.
If possible, you can offer additional services like medication counseling, vaccination clinics, and online prescription refills to differentiate your business and attract more customers.
Note that, you must obtain the necessary licenses and adhere to state and federal regulations related to pharmaceuticals to do this business in Alaska.
3. Petroleum Product Marketing Company
The oil and gas sector in Alaska is highly profitable and welcoming for new investors. When you set up your petroleum marketing company and get the necessary licenses, you will serve a range of businesses.
The petroleum market accounts for the fifth highest number of millionaires per capita income in the United States. Inasmuch as the resources are readily available here, interested individuals with the required funds can easily set up a successful petroleum product marketing company in Alaska.
4. Start an Insurance Agency
Considering the unique risks that Alaskan businesses and residents undergo, smart insurance providers can thrive doing business in the state. More so, the need for insurance coverage increases as the population and businesses grow in the state.
This is an opportunity for entrepreneurs to establish their own insurance agencies. You can provide a wide range of insurance products like home, auto, health, life, and business insurance.
5. Fishing and Frozen Foods Business
Fishing and frozen foods are among the most profitable small businesses and investment opportunities in Alaska. This is due to the state’s abundant natural fishing resources and strategic location.
The state is known for its vast coastline, numerous rivers, and pristine waters. Alaska is one of the richest fishing grounds in the world. The abundance of various species of fish including Salmon, Cod, Pollock, Crab, and Shrimp highly sought after in domestic and international markets, provides ample opportunities for fishing and seafood processing businesses.
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6. Start Your Own Shipping and Transportation Services
Alaska’s vast geography and remoteness create a significant demand for shipping and transportation services. The state heavily relies on air, sea, and land transport to connect its communities, transport goods, and facilitate trade.
Starting a shipping and transportation business in Alaska can involve cargo transportation, freight forwarding, logistics management, and passenger services. Small business startups can focus on serving remote areas with limited access to essential goods and services.
However, competition may exist with established shipping companies, so it’s crucial to offer reliable and efficient services.
7. launch Your Own Photography Business
Alaska’s stunning landscapes, wildlife, and unique cultural events offer ample opportunities for a photography business. Photographers can specialize in various niches, such as wildlife photography, landscape photography, event photography, or portrait photography.
With the state’s growing tourism industry, there’s also a demand for photography services catering to tourists and travel companies. Building a strong portfolio, networking within the community, and marketing through social media and local events can help attract clients and establish a reputation in the industry.
8. Set Up a Tourism Business
Another key opportunity in Alaska is the tourism sector. Investors can target niche markets, such as sustainable tourism, eco-tourism, or wildlife photography tours to offer guided tours, adventure activities, and travel packages.
Alaska’s breathtaking natural beauty, wildlife, and outdoor recreational opportunities make it a popular tourist destination hence you can profit from starting a tourism business while you focus on delivering exceptional customer service to visitors.
9. Start an Oil and Gas Servicing Company
Alaska is known for its significant oil and gas reserves. The industry requires various support services. If you have a huge capital, starting an oil and gas servicing business can be highly lucrative.
However, it’s important you know that it is subject to market fluctuations and regulatory complexities.
The business involves providing equipment rental, maintenance, repair, and logistics support to oil and gas exploration and production companies. It is essential interested individuals have a solid business plan and expertise in the oil and gas sector before venturing into this field.
10. Auto Repair Services
If you have the skills, auto repair service is a lucrative startup idea in Alaska. The state has a large land mass which warrants long trips for car owners who often have to do car servicing, maintenance and other repairs.
All you need to start an auto repair service in Alaska is the required expertise and experience. This will help you to deliver exceptional car repair services to your clients.
Aspiring entrepreneurs and business investors should carefully assess their interests, expertise, and available resources before deciding on the best small business and investment opportunities to explore in Alaska.
As usual, we recommend that you do thorough market research, follow a well-defined business plan and comply with regulatory entities. In addition, focus on customer satisfaction with a strong marketing strategy if you must succeed in any of these businesses.