Forbes.com article, "The Most and Least Profitable Businesses to Start," gives potential entrepreneurs some direction to profit potential. If you’re a parent and want prosperous kids to care for you in your old age here’s the direction to steer them.
The Most Profitable Businesses to Start:
- Accounting Services-return a whopping 25% pretax margin
- Legal Services,+21.6%
- Dental Services,
- Specialized Design Services–interior, graphic, industrial
- "Other" Health Practitioners–chiropractors, optometrist, physical therapy, speech therapy
- Outpatient Care Center
- Insurance Broker
- Physicians’ Offices
- Medical and Diagnostic Labs
- Depository Credit Intermediation–small banks, credit unions with cooperative ownership structure
Characteristics of these most profitable businesses are
constant demand (no matter what the economy is doing, people will still get sick and still sue each other) and relatively low overhead.
The Least Profitable Businesses to Start:
- Community Care Facilities, -7.2%. Overbearing overhead plus worldwide nursing shortage. Pricing limited by Medicare and Medicaid
- "Other Support" Services, -2.6%. Event organizing, labeling, gift wrapping and other services with low barriers to entry and plenty of competition.
- Beverage manufacturing. Wineries, brewing, soft drinks, water. Lots of competition and small outfits do not have scale to compete.
- Real Estate Related Services. Appraisers, property managers. Low entry barrier and need volume to be profitable.
- Bakeries/Tortilla Manufacturing
- Amusement and Recreational Services–golf clubs, ski resorts, marinas, fitness centers
- Motor Vehicle Parts Manufacturing
- Specialty Retail–sporting goods, music, hobbies
- Beer, Wine, Liquor Retail
- Travelers’ Accommodations
To be fair, these numbers are something of a snapshot, as the profitability of any industry ebbs and flows, at least somewhat, with the overall economy.
As a homeschooling mom and CPA, I’ve got to agree with Forbes that accounting can be very profitable. It is always needed, even in a recession, and can be started with very low overhead-if you don’t count my college education(!)
I’m encouraging my number-oriented 17 yo dd to study accounting because it is such a flexible career. She has seen how my home-based business has grown as she has grown up, allowing me to stay at home, homeschool and still earn money!
And accountants are in demand because there is a CPA shortage. Starting salaries are about $44,000/year right out of college!
Thanks for the post and food for thought!
Carol Topp, CPA
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