In starting a business, the first question you need to answer is – what industry would you like your business to be part of? In any business, whether it’s a big corporation or a small and medium-sized business, it makes a lot of difference if one would carefully select the right industry.

There are a lot of ways to gauge an industry. But coming up with a criteria compose of not just one factor, would really be a helpful guide in picking the right industry. There are three common measures for an industry and they are – market size, growth rate, and profitability.

The most obvious and easiest measure is market size. An industry’s market size is the total monetary worth of the demand in an industry. In 2008, the biggest industry in terms of market size was the banking at least USD 74.2 trillions of worldwide assets. Another measure that can be considered as a complement to market size is growth rate. If an industry’s market size does not grow or it stagnates, that means its demand is not growing – no business will ever grow if demand does not grow. Banking is not only the biggest industry in terms of market size but also the fastest growing according to Fortune’s 2008 Global 500 with a growth in revenues of 26.5% from 2006. Lastly, the third measure is profitability. In measuring profitability, Return on Revenues and/or Return on Assets are commonly used. Although it is the biggest and fastest growing industry, banking only ranked 8th in terms of profitability with 10.4% change from 2007. Mining and Crude-oil Production was the most profitable industry in 2008 with its 19.8% Return on Revenues and Pharmaceuticals comes in second with 17.7%.