The Most Profitable Types of Small Businesses
If you’re aiming for a lucrative business idea, it may be time to brush up on your number-crunching skills.
Accounting services topped the list of the top 15 small-business sectors by net profit margin over the last 12 months, according to Sageworks, a financial information company. The list was compiled using a database of more than 1,000 financial statements from private companies with less than $10 million in annual revenues.
The Sageworks data found that accounting led the pack in delivering the best profit margins, but service-based businesses in health care and real estate dominated the rest of the list.
Sageworks analyst Jenna Weaver notes that a lot of these service sectors are consistently at the top of the “most profitable” list. “Service-based industries often have very healthy bottom lines,” she says. “Their overhead and equipment costs are often relatively low, and much of the time, it doesn’t take a lot of upfront investment to get started.”
Related: Start a Service Business
Weaver adds: “Often times, in cases like consulting, accounting, and legal services, you can get started right inside of your house, without even worrying about renting a space.”
Check out the top 15 industries with the best net profit margins during the 12-month period ending July 31, 2014. For aspiring entrepreneurs, this may be the best place to start when considering new business ideas. (Note: Net profit margin has been adjusted to exclude taxes and include owner compensation in excess of their market-rate salaries.)