Which Industries Are the Most Profitable for Small Business?

Date: August 24, 2017

Financial information company Sageworks analyzed which industries are the most profitable for small businesses over the past 12 months. Is yours among them?

Launching a business already requires overcoming many obstacles: accessing capital, finding qualified workers, picking the right location, and more. Keeping your business up and running in those first rocky years can prove even more difficult. Entrepreneurs don’t always consider whether they’re in the right industry—or which industries are the most profitable for starting a small business.

Over the past year, financial information company Sageworks evaluated the net profit margins of privately held companies in order to rank which industries yield the most profit. Here’s what they found. 


1. Accounting, tax preparation, bookkeeping and payroll services

There’s always a need for financial help, so these types of businesses are bulletproof to unpredictable economic environments. This industry also doesn’t require big expenses or upkeep like equipment, so the overhead is manageable early on.

2. Lessors of real estate (landlords)

This industry has seen a big jump from eighth place last year, as more people are choosing to rent instead of buy. Purchasing land and property calls for a significant amount of money upfront, but rentals can bring in big returns.

3. Legal services

The legal service industry is always in high demand, but there are barriers to entry and necessary investments like degrees, training, and certifications.

4. Management of companies and enterprises

Businesses consistently seek out help for making management decisions or operational strategies, so this industry is growing more profitable.

5. Activities related to real estate

Activities related to real estate refer to construction and appraisals. This year has shown considerable growth in the real estate and construction industries, and the greater demand is increasing profit.

To find out which other industries stand out as the most profitable for small business, check out this Entrepreneur article.



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