You want your time to be used wisely when you start your own business. That means you should know the most profitable businesses to start. Without knowing the most profitable ideas, how will you reap the rewards?
What’s considered ‘profitable’ is always changing, of course, and that’s why we continually update our rankings. Every year the most profitable businesses will change slightly as our economy evolves, products become obsolete, and technology advances.
What follows is a freshly updated ranking of the most profitable small businesses, plus the info and resources you need to get started.
Industries With Most Profitable Business Ideas
First, some context. We took a look at financial reports from January 2023 to get the most recent data. When you consider industries with the most profitable businesses in demand, you’ll find:
- Financials: The monetary sector leads Login Baccarat Online the most profitable companies, with over 30% net income and gross profits for banks nearing 100%.
- Transportation Companies: Railroads are a close second with nearly 28% average net profit, 41% pre-tax and pre-stock compensation profit, and EBITDA of nearly 47%. Ship makers also have been making a great living.
- Energy: Whether they are solar, gas, refineries, or other aspects of the energy production market, companies focused on energy make up nearly 20% of the Fortune 500 and have record profits. Plus, almost all of them are short-staffed, which means they hire small businesses to help meet their ongoing needs
- Technology: Four companies in the top 10 and 47 of the top 500 companies are tech-related businesses like Apple, Amazon, and Tesla. Many software companies have taken a beating, but they are still some of the smartest business ideas.
- Healthcare: Four of the top 10 and 45 of the top 500 companies are in healthcare. On top of that, healthcare jobs are 19 of the top 20 jobs, according to the Bureau Of Labor Statistics. That means there is room for businesses to open.
- Investments and Asset Management: Managing other people’s money is an easy startup business with 25% net income.
- Real Estate Investment Trusts (REITs): Real estate is a necessity. Everyone needs a home, and businesses need buildings. With the spike in remote work, REITs are making more money than ever because rents and home prices are at historical highs. Just be careful about overleveraging yourself.
But if you wonder what the most profitable and successful small business ideas for small business owners to start are, that’s often a separate category. Most of us don’t have access to venture capitalists or the ability to run a business for ten years before it starts making money. So, I’m constraining the list to the most profitable and best small businesses to start.
We’ll identify what small businesses are most profitable, look at some of the most profitable small businesses to start from home, study the current small business landscape, and provide examples of successful business owners in those fields.
Before we get started, be sure to check out our courses!
Let’s get started!
What Small Business Is Good To Start?
I love using NYU’s Margins by Sectors page for benchmarking. It makes it easy to categorize what are good businesses and what’s a good business to start or invest in. Profitable businesses include:
Not all of these profitable businesses are necessarily profitable small business ideas. You’ll need to consider the startup capital and regulations to decide which types of businesses to start. Let’s look at some of the most profitable small businesses and why they make the most successful business ideas.
What Is The Best Business To Start?
1. Cleaning Services
Cleaning businesses are virtually gold mines—easy to start and they have high success rates. In fact, our friend Chris Mondragon is pulling in over $125K a month with his company, Queen Bee Cleaning! In his words:
As you start out, your margins are 40-50%.
Forty to fifty percent! Seasoned business owners and aspiring entrepreneurs know how significant that is! With only 13 weekly cleaning contracts, you can rake in $7,800…not in revenue, but pure profit! Now imagine signing 20 or 30 of these high-paying contracts.
Cleaning is a business built to scale. But be careful: You can’t scale to millions of dollars just anywhere. There’s a tried-and-true calculation that reveals the earning potential in your area. If the numbers line up, you have excellent chances of scaling to seven figures.
If you’re curious about how to use the calculation and want to know how to start your cleaning business from scratch—no franchise required—check out this free masterclass with Chris Mondragon.
You can read Chris’s incredible story here or watch the interview below.
2. Investment & Asset Management
A small business managing assets can easily grow because it’s in the most profitable industry. Fortunately, it doesn’t require enormous amounts of startup costs. You’ll need to comply with state and federal regulations, but most businesses charge a percentage of all assets managed. Most Asset Managers make between $60K to $160K per year, but the sky’s the limit, depending on how many assets you manage.
3. Real Estate Investment Trust
A REIT is one of the best businesses to start from home. REITs are a unique business structure that pools multiple investors’ money together to buy real estate. Most REITs don’t have to pay business taxes because most profits are paid to investors and taxed personally. Find out how Thach Real Estate Group earned $100 million in real estate investment properties.
4. Gaming Software
Video game companies are great businesses to start. Most games have recurring revenue through monthly subscriptions, add-ons, and other monetization strategies. With a 21% net profit margin, gaming studios are one of the best start-up business ideas.
5. Renewable Energy
If you have electrician skills, renewable energy is one of the most profitable small businesses. It has an expected 9% compound annual growth rate. With a nearly 18% net income margin and lots of government subsidies, green energy will be one of the in-demand businesses for years.