America is sometimes called the land of entrepreneurship. There are 32.5 million small businesses in the U.S., according to the Small Business Administration – and 81% are solo operations with no employees.
With the internet providing ready access to audiences of potential customers, starting a small business can happen more easily than ever, whether you’re looking for some extra cash or planning a long-term career change. But what’s the most profitable small business type?
These most profitable small businesses are based on 13 published lists, as well as data from sources including the U.S. Bureau of Labor Statistics (BLS).
1. Consulting
A consulting business can take many forms. Consultants work with businesses or individuals in many areas, from how to build social media brands to leadership training, financial planning, and more. Consultants often play to their personal strengths and experience. Like many freelancers, consultants starting out may choose to offer low-cost or free introductory consultations to build their client base and establish their expertise. A benefit to new consultants is low overhead cost – consultants might need no more than their own experience and a computer to get started.
Management analyst and consultant positions are expected to grow 11% by 2031 – much faster than the 5% projected job growth across occupations, according to the BLS. Many consulting roles require specific credentials. Businesses seeking financial consultants, for example, may require applicants to have certifications like Chartered Financial Consultant (ChFC), Certified Public Accountant (CPA), or Certified Financial Planner (CFP).
2. Personal Training
Personal fitness is a large and growing field. Personal trainers can offer the flexibility that many fitness-focused consumers need, like meeting at gyms, parks, community centers, in-home, or online. Personal trainers can scale their business by offering one-on-one or group sessions, with rates scaling with the size of the group. Because of the broad range of services that can be classified as fitness, personal trainers should focus the services they offer and how they market their business on the specific fitness fields in which they specialize. For example, a trainer whose routines require equipment might partner with a gym, while a trainer comfortable with technology can create multimedia experiences, such as exercise videos, online meetups, or partnerships with nutrition-focused apps.
Certifications are available for personal trainers, and some gyms require trainers to have specific credentials, plus cardiopulmonary resuscitation and automated external defibrillator (CPR/AED) certification. But anyone with personal fitness expertise and a camera or access to a public space can get their fitness business started without large startup costs. As the business grows, renting a gym space, buying equipment, or hiring more trainers can bring in more revenue and higher profits. The BLS estimates 19% growth for fitness trainers between 2021 and 2031, making it an industry with lots of potential for health-conscious entrepreneurs.
3. E-Commerce
E-commerce comprises 14.6% of retail sales in America, according to 2022 U.S. Census data. E-commerce stores vary from small, online shops selling homemade goods out of a garage to large distributors. Some entrepreneurs generate all their sales by participating in e-commerce marketplaces like Amazon, Etsy, or eBay. As e-commerce operations grow, many entrepreneurs are expanding to brick-and-mortar stores offering “buy online, pick up in store” and traditional in-person shopping options. Many e-commerce stores specialize in reselling items that retain some value when used, like collectibles, books, or fashion products.
To open an e-commerce store, many business owners use web hosting services that can set up and maintain websites for a monthly fee. These services are often scalable, so startups can increase website resources and online store size as their business grows.
4. Online Teaching and Tutoring
Home tutoring and online schooling businesses have taken off in recent years. As of 2021, they had a global market size of $7.69 billion with an expected compound annual growth rate of 14.9% from 2023 to 2030, according to Grand View Research.
Online education can extend beyond just teaching children and teenagers. Many entrepreneurs teach skills-based online classes for adults who want to learn everything from cooking to marketing to business strategies. Entrepreneurs can teach using one-on-one lessons, full classes, or prerecorded lectures that can continually generate revenue. For courses that focus on life skills, educators may need to develop clever marketing strategies to show potential customers their expertise and earn trust.
With the internet providing ready access to audiences of potential customers, starting a small business can happen more easily than ever, whether you’re looking for some extra cash or planning a long-term career change.
To get started teaching online, it’s important to decide how to present your courses. Prerecorded videos can be put behind a paywall on your own website or generate ad revenue on video sites. Hands-on classes can utilize free or low-cost videoconferencing and screen-sharing software or use a platform built specifically for online teaching. Online teaching and tutoring businesses should consider tools that support their teaching style and material – such as interactive whiteboards for math or high-quality scanners for art history.
5. Cleaning Services
Cleaning businesses have the potential to earn high profits because they can grow very large when done well. Many cleaners start small with a few employees and a vehicle filled with cleaning supplies. As they grow their client base and workforce, many expand into specialized services like carpet cleaning or larger cleaning projects for corporate offices or apartment complexes. As a company builds a strong reputation, it can add premium features, such as floor waxing or power washing, to increase its revenue. But before starting a cleaning company, it’s wise to do market research to identify what cleaning needs are currently unfulfilled in the area. Because a cleaning company is easy to start, there will likely be many competitors – but if they have poor reputations, a reliable and high-quality cleaner may be able to 'sweep up' the competition.
6. Bookkeeping
Accountants need years of specialized education and certifications to offer services like payroll. But businesses also need to accurately record all their financial transactions. Recording transactions and balancing the books doesn’t require the same standardized qualifications as accounting positions, though certified accountants usually oversee bookkeeping roles. Whether bookkeepers are trained by experts or self-taught, they should be able to adapt to whatever accounting system their clients use. “Bookkeeping-as-a-service” companies often help small businesses transition from home-made, rudimentary accounting documentation to standardized accounting books the bookkeeper manages. Many bookkeeping software companies have their own certifications or training for bookkeepers looking to use their programs. These companies may also offer affiliate programs to users and pay commission for referrals – both as bonuses and as recurring revenue.
7. Mobile App Development
Mobile application development appears frequently on profitable small business lists, with the BLS estimating 25% job growth for software developers between 2021-2031. App development may have lower startup costs than many other small business ideas, but it does require extensive knowledge and expertise. App developers without a programming background can take classes and become proficient in common programming languages like Java, Python, or C++ in order to create a profitable company. If you have an idea for an app and the skills to create it, you can sell your own applications on the app stores, generating profit from app sales, in-app purchases, and advertisements. If you have the skills but not the ideas, many programmers contract their services to app development companies or small businesses that may want to create their own apps, like a local restaurant looking to create an online-ordering application.
8. Real Estate
There are many ways to break into the real estate business, but three of the most common small-business real estate models are flipping, renting, and selling as an agent – each with its own benefits and risks. Buying cheap properties, remodeling/fixing them, and selling them for a higher price can be profitable but requires the capital to buy the home and the skills to do the work. Buying properties to rent – either for housing or vacation rentals – can give a business steady passive income but also requires capital to buy and maintain the properties. Selling as an agent or broker is a popular choice for entrepreneurs breaking into real estate and requires less startup capital than the other two, primarily for licensing courses and fees. It can be a great business, especially for agents with large personal networks.
The Takeaway
Starting a small business can be a great way to earn extra money or begin a new, long-term career. These eight options can get you started on the road to owning and operating your own profitable small business.
Further Reading
This ranking of most profitable small businesses aggregates and synthesizes information from the following 13 business websites and includes data from research firms, the U.S. Bureau of Labor Statistics, and the U.S. Census.
Photo: Getty Images
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