The 15 Most Profitable Small-Business Industries
While a number of small businesses flop in their first year, a safe way to help your new venture be a success is by tapping into the right industry.
From accounting to legal services to real estate -- there are certain industries that tend to see higher profits than others. By analyzing net profit margins of privately held companies over the past 12 months, financial information company Sageworks sought to uncover exactly which industries are the most profitable.
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For the second year in a row, accounting and tax services takes the cake for the most profitable industry. Real estate, legal services and management of companies and enterprises follows closely behind, also landing on the top of the list for most profitable types of small businesses.
“Many of the top performers are service industries in which certifications and education requirements are barriers to entry,” Sageworks analyst Libby Bierman said in a press release.
However, that doesn’t mean other major industries didn’t see higher profitability over the past year either. From healthcare to manufacturing, check out this year’s list of the most profitable industries for small businesses.
Accounting, tax preparation, bookkeeping and payroll services
Lessors of real estate
Like accounting and taxes, here’s another industry that requires specialized training and certifications. While you may have to invest in degrees and training, you can charge a considerable amount for specialized services.
Management of companies and enterprises
Activities related to real estate
Offices of dentists
Offices of real estate agents and brokers
Nonmetallic mineral mining and quarrying
With strong construction markets and manufacturing, the nonmetallic mineral mining and quarrying industry has seen a rise in profits over the past year. While there are a number of jobs within the industry, common ones include mining machine operators, truck drivers, sales workers and construction supervisors.
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Offices of other health practitioners
From physical therapists to psychiatrists to podiatrists -- there’s always a need for niche health practitioners.
“Healthcare and dental practices do have to invest considerably in technology and supplies, but their services are inevitably in demand even during slow economic times, which reduces pressure on their profitability levels,” Bierman says.
Medical and diagnostic laboratories
According to Sageworks, businesses in construction-related industries have seen high sales growth over the year. That’s why land subdivision, which is comprised of companies that service land and divy properties into lots, has seen high profitability over the past year.