Are you exploring the idea of starting a new business or expanding yours? Do you need some good ideas to start your own business? In other words, what are the most profitable small businesses out there?
Sometimes it’s useful to see what businesses are thriving to get some guidance on where to go next. There are certain small business industries that see higher profits than others. Accounting, for example, is always among the most profitable small businesses. Others, like the food truck industry, are up and coming, and we wouldn’t be surprised to see an increase in its profits as the years go by.
Are you afraid of starting your own business because it requires a large budget? Are you yearning to run one of the most profitable small business but still struggling to decide on what would be the best fit for you? Take a look at 35 of the most profitable small business and industries over the last years.*
35 Of the Most Profitable Small Businesses
You’d be surprised at the number of individuals who don’t know how to change a light bulb — or simply don’t have the time! If you’re an expert at building and know your way around a well-manned home, this is definitely the job for you. Handymen are usually paid by the hour and can have multiple clients at once. You can also partner with larger handymen companies as an employee or franchise partner, meaning they will take a percentage of your pay, but give you loads of work in return, generally.
It’s a no-brainer. Any form of education is commonly considered as priceless. Running an online course – learning Chinese or Japanese or even English (particularly for immigrants), news writing or a course on real estate brokering or the stock market, or auto mechanics, or any subject a student is interested in learning is a profitable business venture. You could work out special arrangements with other digital content companies which can provide you with tools to help carry out your lessons. The most costs involved in this would be the minimum amount you pay for your domain name and hosting space or the fee a digital content outfit will charge you for featuring your course in their platform.
Whether is newborn or post-pregnancy services, enrichment activities or daycare, babies are everywhere. The beauty of child-related businesses is that if you’re a true fan of children, you won’t work a day in your life. This business is less likely to suffer as there will always be a need for childcare.
With the increasingly demanding and competitive lives, we’re leading today, students in their formative years are almost always compelled to excel in their studies. Parents are aware of this. They generally don’t mind spending money to help their kids achieve good academic standing – reason enough to make starting a tutoring center a pretty profitable business. If you are or have been a teacher, this is the type of business that’ll be right down your alley. Some people may simply require a background or some experience of helping someone get through his/her school test requirements. If you’ve got some specialized skills (Math, foreign language, creative graphics, etc.) it’ll help promote your business and start getting students right away. It’ll be good to locate your tutoring center in the vicinity of a big school where you can hand out fliers and install posters or small ads. A tutoring program for a student running for 8 weeks with 1- 3-hour sessions typically comes with a fee ranging from $500 – $1800.
Real Estate and Real Estate Brokering
If you have a wide network, this business is especially for you. Apart from setting your own schedule and working on your own time as a realtor, you can also acquire a broker license and establish a brokerage firm. Brokers act as an intermediary between sellers and buyers. With an average net profit margin of 17.4% for leasing and 14.8% in sales, real estate has a lot to offer and once you have acquired experience it can turn to be one of the most profitable small businesses.
Smile big — dental offices are high up on the list of the most profitable small businesses in 2017. Yes, the overhead costs to set up this type of business are high, but with returning patients and good referrals, the practice will pay for itself. Additionally, there’s the added benefit of cosmetic tooth bleaching being a booming business (a $3.2 billion dollar industry to be exact). If you got it, flaunt it — whether that’s pearly whites or a successful dental practice.
Gardening & Landscaping
Calling all Southerners and Californians — we love our gardens! If you live in warmer weather states, gardening can be a lucrative business. Take it a step further and go for landscaping — you’ll not only be contracted by homeowners but also by hotels and larger businesses who love a beautiful outdoors.
Because no commercial space is required outside of storage space, it’s possible to start a landscaping business with a modest investment of up to $15,000 for landscaping equipment.
If people need to travel 30 minutes or more to purchase flowers, a florist shop in your community would draw customers into your store. Just like you, they celebrate weddings, birthdays, Valentine’s Day, Christmas, Easter, and other holidays by buying bouquets and arrangements.
If you’re an expert in your industry and have been working at it for years, consider consulting. Consultants who are most successful tend to embark on the journey later in their careers, have niche expertise and are incredibly organized and well-connected. Plus, they know how to scale a business and have the keys to keeping clients happy. Just like other types of freelancing, being an independent consultant is a business and requires networking and negotiating.
As we become increasingly technologically inclined, the IT field is one of the more profitable careers. Those who know how to deliver IT support are in high demand in every industry and can charge high fees for their services.
Write about what you know and offer an ebook or paperback online for passive residual income. High-quality content sells, especially series novels and books on technology, fitness, cooking, parenting, and non-fiction books about business and money.
This falls into the previous category, but it’s worth highlighting. Provided you are technology savvy and creative, this could be an excellent choice to run one of the most profitable small businesses. Every single company, big or small, has its own website, and the demand for good website designer is only increasing. Consider the low cost of starting your own website design service company, since you can run it from home. If you think you need some extra education on technology, you can find a course that suits you on this list.
Again, another freelance position worth considering. You need to be a visual type of person and highly creative, and be able to show a shining portfolio. Make sure you can come up with unique ideas, and do the homework of researching the potential market: while the demand for logo designers is high, also is the competition.
Accounting & Tax Preparation
Every year, accounting makes the list as one of the most profitable small businesses. This category also encompasses payroll services and bookkeeping. Most people would rather pay someone than do it themselves or learn how to do it. Anything from a small accounting firm to a tax accountant will always be in style.
We all love a good party, and even better — a good party planner. Even in times of economic despair, weddings and birthday celebration still happen. Party services can be flexible and versatile, covering planning, catering, bartending, and serving, among other functions. Since you can use contractors for most of these services, the overhead costs can be as low as you negotiate them.
If you have a passion for helping others feel like their best self, personal training is the route for you. This is last on the list because although it is a booming small business field, it’s also not a field for those who are shy or not willing to get out there. It’s all about networking and sharing your passion. Helping others look better is not a simple task; so be proud of your work, get out there and train hard.
They say there are two things you can’t escape from: death and your taxes. As morbid as it may sound, we’re all going out to pass someday and funeral services will always be a booming market. Funeral homes generally see a steady stream of customers, providing a largely recession-proof business model for business owners who don’t want to experience economic downturns. Do the research beforehand because getting started requires at least a Bachelor’s degree and be prepared for a high overhead cost.
The foodie movement continues to grow! A few years back consumers were hesitant to buy food from a truck parked in a parking lot. Now, there are actually food truck festivals for foodies who can’t get enough. If you have a mouthwatering recipe and want to make a business out of it, the days of brick-and-mortar are over. You can pick a truck, paint it your favorite color and get to ridin’ and cookin’. Before you begin considering a food truck business, head to your local health department to inquire about the required permits. In addition to being a street food vendor, you can offer your services to cook for weddings, barbeques, festivals, and other celebrations.
Like the previous one, you don’t need a large investment to start your own catering business. If you have a suitable kitchen, equipment, and a recipe book worth-sharing, you can operate your service from home. If you are extremely well organized and can count on a pair of extra hands to help you (as well as suitable transportation), this is a good way to set a foot on the food industry. Think that those requesting catering are willing to pay well for this type of service since it serves in celebrations, important events or meetings. If you are willing to maintain a high standard not only in your food but also in your customer service and every single small detail, this could be one of the most profitable small business for you. Learn here the 5 steps you need to take to start your own catering business.
Health Food Kitchen & Delivery
As we become increasingly busier, the time to cook becomes slimmer and slimmer, yet we become bigger and bigger if we don’t make sure to feed our bodies the right nutrients. That said, individuals are always looking for healthy food options that are already prepared. Setting up a service that caters to health-conscious individuals, or perhaps vegan or vegetarians (niche markets), can be profitable if you know how to market the services.
Auto Repair and Auto Leasing
Car emergencies happen 24/7: oil needs changing, headlights go out, you get a flat tire, you name it. Reportedly, auto repair companies made big bucks in 2017. On the other hand, with the rise of ride-sharing companies like Uber and Lyft, consumers are more hesitant to buy cars. Although it was down by 2.4% net profit, the automotive industry still made the Entrepreneurs 2017 list, making it one of the most profitable small businesses.
This is probably one of the easiest industries to get into. Not a lot of investment is required. It’s a great business opportunity to help people get their plane tickets, or arrange for other transportation options, hotel reservations, tours and much more. By tying up with a host agency, you could open up a home-based travel agency. It’s advisable that you obtain your IATA (International Air Transport Association) and your ARC (Airlines Reporting Corporation) numbers. These numbers allow you to issue air tickets while earning a commission.
With tourism on the upswing in most parts of the world, getting into this travel business should prove to be a profitable business.
Social Media Consultant
Many business owners know that social media contacts drive traffic to their products and services, but they don’t know how to go about making that happen. If you know how to engage an audience to attract hundreds and thousands of viewers, business owners will pay for your services.
Marketing & PR Services
Speaking of marketing services… Every brand has a story but not every business owner knows how to tell it. Here is where marketing gurus enter. Marketing & PR professionals have the skill-set and tools to tell your brand’s story and make sure the right audience hears it. It is an ever-changing field with the rise of influencers and the decline of print media, but lucrative nonetheless within the new avenues that are at the marketer’s disposal.
This can go many routes: graphic design, freelance writers, and social media gurus. The outsourcing services are continuing to make a difference in the way companies interact with their employees. Which means more opportunities for freelancers to take on projects. Websites such as UpWork and Creative Circle make it much easier for freelancers to become visible.
For the past couple of decades, the increasing number of hours people spend on the internet has raised the demand for quality web content. This is where somebody with a true talent for language and creative imagination can succeed as a copywriting entrepreneur. Good copywriters create advertising and marketing materials that a lot of online and offline businesses need. What’s more, you don’t have to have a big, expensive commercial space as most copywriters work from their homes as freelance writers with practically no overhead expenses.
Without leaving your home, you can translate blogs, website pages, and other documents into a language you speak fluently. Check out platforms like Fiverr and Upwork to connect with clientele looking for your skills. Because the demand for translators is high, make sure you don’t undersell your abilities.
Warehouse and Storage
Time and space tend to be some of the factors most people lack. When people have to move, or when they go through a life change, they need the extra space for storage. This industry solves that problem of space. There will always be a need for storage!
Are you a handyman (or woman!)? If you can multitask and are willing to get your hands dirty, this could be a good choice for you. There is and there will always be a demand for people who can repair lighting, fix plumbing problems, clean gutters and pools, paint fences, replace doors and carpets… you name it. While the hourly rate for property maintenance is not high, this can turn into one of the most profitable small businesses if you live in an area where apartment complexes and rentals abound.
Like the previous one, other than the right attitude, you don’t need much to start this business. All you need is basically some good cleaning equipment and products, a vehicle, and a catchy website to attract potential customers. If you already do your own cleaning at your own home and people praise your place for being spotless, why not turning this into one of the most profitable businesses you can find?
Some restaurants or other local business in your area may provide a delivery service to customers. If you go this route to start a profitable business as a self-employed delivery person, other than a reliable vehicle you don’t need a large budget. However, make sure you research the demand in your area. And of course, that your vehicle (car or motorcycle) is in excellent condition and up to date regarding inspections.
A courier service is a service that allows someone to send a parcel or consignment from one location to another. Courier services are distinguished from ordinary mail services by features such as speed, security, tracking, signature, specialization, and individualization of express services, and swift delivery times. Delivery doesn’t cost much — other than gas. However, getting contracted by a large firm, such as Amazon, can prove to be profitable for couriers. You can even go fully independent if you have established the right connections of people who will use your services, especially if your fees are more affordable than the fees at larger companies.
You don’t need to have all your ducks in a row to put together a business. You can make some extra cash by renting out a spare room. Many rent out their space to Airbnb users to make a living. But it can be as simple as renting out a bedroom once a month for extra income. To recoup costs for advertising, cleaning, and supplies, you need to decide how many days to rent the property and for how much.
Pet Handling Service
Most people regard their dogs, cats and other pets as family members. They’re not a big fan of leaving their pets alone without anybody looking after them. Many pet owners on many occasions go away for short or long periods of time and need to have someone to look after their pets’ welfare. If your business can offer a place to keep the pets, you could earn some good money depending on the duration of their stay. Along with this, your services could include dog walking, training, and grooming. Some start-up capital will be needed to cover the costs of setting up a website, getting a mobile pickup and stocking up on grooming materials.
Dash Cam Business
People use dash cams in vehicles to capture driving and parking accidents, to record a road trip or take videos of sunsets. You can set up a website and post dash cam videos to garner interest from potential customers. Instead of allocating space for inventory, the manufacturer can drop ship orders via your purchase orders.
10 Of the Least Profitable Small Businesses
Naturally, the other side of the coin will give you several least profitable small businesses. Here are 10 of these:
- Oil and Gas Extraction – Market volatility is the main reason small business owners stay away from this kind of business. Crude oil prices have dropped since 2014 and profits average, minus 7.6%. If your goal is to strike it rich, this isn’t the business for you.
- Manufacturing beverages – Capital-intensive manufacturing equipment. Large warehouse space. Low-priced products. Sophisticated technology. An extremely fierce competitive environment. These are the big reasons why it’ll be too tough to break ground in the beverage market. With these things working against you, you’ll be old and gray by the time you get your ROI in the black, and who needs to be profitable when you’re 91?
- Assisted Living – Baby boomers face the possibility of needing elder care. The need is real but small business owners have high overhead costs, a shortage of skilled professionals, and must abide by Medicaid and Medicare pricing regulations.
- Photographer – Costs for cameras, studio space, lenses, business insurance, and training are ongoing. Photographers need to have a steady stream of clients to break even.
- Online Surveyor – Here’s another part-time business that might provide income for gourmet coffee but not much else. Advantages are that you can fill out surveys anywhere and there’s no investment. If you have an hour commute each way on a train, you could earn money filling out surveys.
- Wholesale business –Think twice if you’re planning to put up something like this. The profit margins here are low and thin. Those wholesale businesses that thrive have extremely sophisticated and efficient working systems and procedures, rigid credit and collection control and more importantly, they have huge volumes of sales over which they’re able to spread their overhead costs, which are a-plenty.
- Retail business – When you’ve got the Walmarts and the Kmarts of this world (and other large discount department store chains either incessantly increasing their market share or threatening smaller retailers in various kinds of categories), retailing gets to be tougher than ever before. Not only that – you will also have to contend with big names like Amazon and a host of other online retail shops. Retail business is simply too competitive and making a decent profit is like pulling teeth. It hurts! Sure you can compete with these giant retailers but it’s hard. You will need a strong strategy that will clearly give your business a relevant motivation for shoppers to choose your store.
- Lawn garden tools and supplies store – This is a niche market. We have seen above that it can actually be a very lucrative business in rich states with warmer climates like Florida and California, but in most of the other states, there’s no need for year-round access to lawn and garden supplies and equipment. Winters are bad and your potential customer would most likely stop tending their lawns from about mid-October to about March. And, when the tough times come – what non-essentials do you think homeowners will cut? Outsourced lawn care. What you need is an all-year business that will provide you with good, steady revenue.
- E-commerce – Putting up an e-commerce site sounds easy enough. Set up your website and wait for a surge of orders, right? Nope. It’s a lot harder than you think getting internet users to visit your site. It’s an uphill battle to have your website ranking on the first page of search engine results. Of course, there’s advertising you can buy to drive traffic to your site but it’ll cost you plenty. And, when you do get people to visit your site, you’ve still got to worry about converting these into sales and revenues. If e-commerce is in your mind as a business venture, it won’t hurt to think again.
- Inventor – You may have plenty of ideas for products but you’ll need to convince someone to invest in your ideas if you don’t have money. It takes capital to create prototypes and secure patents. Only 5% of patents see the light of day commercially with only 1% reaching 5 figures.
We hope this gave you an insight into the most – and the least profitable small businesses currently out there. Did this give you some ideas? Maybe you found the inspiration you were looking for, but if you need more useful information, learn here about the businesses you can start with a small budget and the resources you need to start a small business. This info will help guide you in determining where to invest your hard-earned money. Also, remember to subscribe to our Newsletter: it’s free every week you’ll receive in your mailbox the latest trend in business and inspiring ideas like the ones you just read.
*For this compilation we have used the following sources, among others: the annual report made by the University of Arkansas, Fundera, and online publications like Self-Made, Shopkeep, Medium and Passive Airbnb. For the ranking, we have used the data provided by BizStats.com for sole proprietorships with $400,000 in annual sales.