Most Profitable Small Businesses Ideas
Looking for hot small-business ideas? Crunching numbers is your best bet. Sageworks, a financial information company, released a list in August 2014. It shows the most profitable types of small businesses during the preceding 12 months. The company came up with the list by combing through more than 1,000 financial statements from companies that brought in less than $10 million annually.
- Accounting, Tax Preparation, Bookkeeping and Payroll Services (20 percent net profit margin) Services such as accounting and tax preparation are always in demand—by companies, by individuals, by the government. Not only that, an accounting business can get started without having to lease space. The business is simple enough to run from a house or apartment. Thus, the overhead, equipment and capital needed is astoundingly low.
- Oil and Gas Extraction (19.2 percent net profit margin) Production of natural gas has increased in recent years—by 27 percent between 2005 and 2011, with shale gas production leaping an astonishing 947 percent. Legislation has also created many opportunities for small businesses. According to the website Roll Call, about 92 percent of oil and gas extraction companies employ no more than 20 workers.
- Commercial and Industrial Machinery and Equipment Rental and Leasing (17.7 percent net profit margin) Many companies always need machinery but don’t want to own it. Buying the equipment in the first place may be hefty but pays for itself after the first few rentals.
- Legal Services (16.5 percent net profit margin) Like with accounting, overhead costs and equipment expenditures are low.
- Offices of Real Estate Agents and Brokers (14.8 percent net profit margin) This is a service-based job like accounting and legal services—small upfront investment and huge profit potential. In fact, other service-based groups in fields such as health care round out the list.
If you are looking to start your small business, here is a guide to help you out.