New year, New business plans! Right?
Just like previous year, we’ve compiled a list of most profitable small businesses and industries with respect to high profit margin.
In August 2017, Sageworks published a report in which they revealed some of the most profitable industries with respect to pre-tax net profit margin. They handpicked profitable small businesses after 12 month analysis of privately held companies.
It is worth mentioning here that the most of the small businesses were from services sectors. To start these businesses, specialized certifications and education are required. These certifications and licenses are the big entry barrier to get started.
However, it doesn’t mean that other types of small businesses will not lucrative. Look at the manufacturing, construction and transportation businesses; you will get an idea about how much these niches have profit returns.
Well, here are the most profitable business ideas which you can consider for starting a new business in 2020.
10 Most Profitable Small Businesses in 2020
1. Accounting, Taxation and Financial Services (18.4%)
Accounts and finance is a compulsory component of business. No matter, what type of business is and what is the size of the firm? Company’s management has to setup an accounting and finance department to manage their business financial matters.
It is a most profitable business in the world because accounts and finance is the backbone of the organizations. If you are a chartered accountant or a certified public account, you can offer your accounting and financial services to organizations. Similarly, you can also offer bookkeeping, Payroll and taxation services.
It is predicted that accounting, taxation, bookkeeping and financial services will the most profitable small businesses in 2018.
If you are planning to start this business at small scale, you will have to acquire accounting certification from your own country’s supreme accounting body.
2. Lessors of Real Estate (17.9%)
These days, the real estate business is on its peak. Those people, who lent their buildings and plots to companies, are earning handsome rental income on monthly basis.
If you’ve an investment and you are looking for most profitable business niche for earning handsome income, then choose this industry.
3. Legal Services (17.4%)
Offering legal services is another most lucrative business idea. Lawyers and barristers usually charge thousands of dollars to resolve lawsuits.
The main reason behind high business profitability is that lawyers invest lots of time and money on their degrees and certifications. So, they charge high due to their specialized services.
You can also start this business independently, but you need to get Law degrees, specialized training and a license to operate in your country.
4. Management of Companies and Enterprises (16.0%)
Busy entrepreneurs and business owners do not have much time to manage their human resource and business. If you are good in HR and business management, you should start this business.
The good thing is that you can offer HR and business management consultancy services and make good bucks each month.
5. Real Estate Activities (14.9%)
Like renting out your real estate property, you can also render real estate services such as real estate consultancy and construction services.
This business has high profitability ratio and considered that it will become the most profitable business idea for 2018.
6. Offices of the Dentists (14.8%)
Just like accounting and legal services, the profitability ratio of dentists’ offices is also high. To become a certified dentist, one must have to get dentist degree as well as a license to start a healthcare business.
No matter whether the economy is on its peak or staggering, people needs healthcare services at any cost. If you want to go one step further, you can study to become an orthodontist. These doctors specialize in moving teeth around with braces, Invisalign and many other technologies.
7. Real Estate and Brokers’ Offices (14.3%)
This is one of the most profitable small businesses for the year of 2018. Last year, the profitability ratio for real estate and brokerage business was low. However, it is expected that the brokerage and real estate business will become a money making business.
In this small business, the entry barriers are quite low. However, you may need a brokerage license to start a business.
8. Non-Metallic Mineral Mining and Quarrying (13.2%)
From last few years, this industry is continuously rising with respect to profitability. Due to high profitability, theses businesses are expanding and creating more jobs such as truck drivers, mining machine operators, construction supervisors and sales workers.
9. Health Practitioners Offices (13.0%)
Everyone wants a good health. For this purpose, people usually contact health practitioners to improve their health conditions. From psychiatrists to physical therapists to podiatrists, all are making good bucks each month.
Just like dentists and other specialized services, health practitioners spend a lot of time on certifications and trainings. If you want to start this most profitable business, you will have to acquire degree as well as license to get started.
10. Religions Organizations (12.4%)
Unlike businesses (for profit purpose), religious organizations run on charity and they continuously need money to operate. These non-profit organizations get lots of funds from public and enjoy good profitability after all expenses. But these organizations are not for profit, so they allocate the remaining funds to other works in order to achieve their goals and objectives.
Finally, these are the most profitable small businesses and industries which you can think about in this year. However, Sageworks have also analyzed more industries with respect to profitability ratios such as
- Medical and Diagnostic Laboratories (12.1%)
- Land Subdivision (12.1%)
- Automotive Equipment Rental and Leasing (12.0%)
- Warehousing and Storage (11.0%)
- Death Care Services (10.8%)
- Other Professional, Scientific & Technical Services (10.6%)
- Management, Scientific and Technical Consulting Services (10.3%)
- Specialized Design Services (10.2%)
- Other Schools and instruction (9.8%)
- Support Activities for Road Transportation (9.7%)
It is also expected that the future technology trends are going to change. So, it is clear that the future small businesses will also be changed. In order to secure your future, you should start a business which will not only make money in 2018 but also survive in the upcoming years. Do a great market research, find a problem and make an excellent business plan to execute your business idea. Best of luck!