The 5 Most Profitable Small Businesses in 2018

The 5 Most Profitable Small Businesses in 2018

(Last Updated On: January 30, 2019)

Some people know exactly which small business to start and where their passion lies.

But what if you’re not one of those people? What if, your passion is to have a profitable small business, but you’re stumped for small business ideas? Not to worry, here we’ll help to open your mind to ideas and present you with five of the most profitable small business ideas. 

1. Accounting/Bookkeeping Services
2. Real Estate Leasing
3. Automotive Equipment Rental
4. Warehousing and storage
5. Design Services

To find out why, keep reading…

5 of the Most Profitable Small Business Ideas

With the help of Sageworks, a financial information company, we’ll enlighten you on the most profitable small businesses and industries in the US. These industries offer huge potential for those seeking a more stable environment in which to launch their dream enterprise. We’ve picked our top 5 from the top 20 list.

Full list by Sageworks 2017:

What is a profit margin?

The businesses are rated in terms of their profit margins but what is a profit margin exactly?

Profit margin is defined as the percentage of selling price that is turned into profit. It’s calculated by finding the net profit as a percentage of revenue. In other words, it’s the ratio of profit to cost, the US average falls at 8.9% and the higher, the better.

Getting Started – Most Profitable Small Businesses:

A great small business will always start out as just an idea, but the fact is, some businesses and industries have a much higher profit potential than their counterparts. As an entrepreneur or someone seeking a new independent career path, you may want to focus on one of these ideas.

1. Accounting/Bookkeeping Services

Of course, this is number one. Turns out, accounting, tax preparation, bookkeeping, and payroll services have an 18.4% profit margin! Financial services are needed in every business guaranteeing huge demand no matter the weather. Accounting certifications require a degree, however, bookkeeping and tax preparation training isn’t too difficult to get your hands on. Once certified, the only overhead costs are space and a computer, making it the perfect business to launch from home, near-guaranteed to turn profits, and heads.

2. Real Estate Leasing

At 17.9% (not far behind the top spot), real estate leasing is one of the most profitable businesses to be in right about now. One report suggests that there are most households renting than at any point in the last 50 years, especially young adults struggling to get on the property ladder. Leasing agents can work from anywhere, no office space needed than a desk and working computer.

To become a real estate lessor, will depend on which state you live in. in some locations, you’ll need a leasing agent license whereas, in other, you’ll need a real estate agents license. From where we’re standing, this looks like a pretty good investment.

3. Automotive Equipment Rental

With net profit margins of 12%, it seems that more and more people are putting a hold on purchasing cars. The automotive equipment rental and leasing industry is projecting to continue growing. Most cars are known to depreciate in value and are costly to maintain, add on top of that growing cities and traffic jams, more and more people seem to be turning away from buying cars and towards renting or leasing them. This way, they can use public transport or companies such as Uber and Lyft to get from point A to B.

With no hard qualifications needed, this is a fairly easy industry to enter!

4. Warehousing and storage

Many businesses have ‘things’, lots of things. Whether their inventory is clothes, furniture, equipment, technology, businesses that thrive off of e-commerce or sales will need space to store all of their products, and space is limited. On top of that, homeowners are often looking for space to store their beloved belongings when moving or even need it for their extra things. Whatever the reason, space is a hard thing to come by and has lead to a demand for warehouses and storage facilities in both the commercial and residential industries.

With an average profit margin of 11.6%, the great thing about this business is that no education or training is necessary, though having guts, a few brain cells and perhaps a bit of experience in the industry would be helpful (though not necessary). Here’s the catch: constructing, renting or purchasing large amounts of storage space requires a hefty capital investment. Especially those close to the city.

5. Design Services

Calling all creatives among you, hear your calling. Got an itch for creativity and don’t want to let your inner child down? Don’t! Design services rake in on average 10.2% profit margins. Design services could mean a number of things, it could be:

    • Graphic design
    • Home-interior design
    • Landscape design

Design services more often than not, require little to no certification or prior training, they simply need big bursts of creativity and the will to succeed. The great thing about this type of business is again, you can start it from your bedroom. You could decide to become a graphic designer for example, and independently freelance your services. With online services such as Fiverr and Upright, you have a platform to find your clients. Alternatively, you could create a simple website and market your product.

What to Know Before Starting a Small Business:

First things first, before leaping into your new business journey, no matter what industry or path you choose you’ll need to:

Do your homework

Don’t run before you can walk! Make sure you’re set on your idea and do as much research as you can. Find out what your competitors are doing, find out what the market looks like and how you’ll fit in (or better yet, stand out).

Prepare the paperwork

    • Make a solid business plan
    • Get an EIN number (also known as a Federal Tax Identification Number)

Get the right financing

Remember, according to a U.S. Bank Study by Jessie Hagan, 82 percent of businesses that fail do so due to cash flow problems, so if you really want to make sure you have a successful business, find something you are passionate making seeking, and make sure you have the funds behind you to get the business started off on the right foot!

According to the Wells Fargo Small Business Index, $10,000 happens to be the average amount that a business needs to get off the ground. If you can’t yet qualify for a business loan or startup loan, you could always look to fund your business with a credit card.

What Defines a Profitable Small Business?

 When it comes to small businesses – those that employ fewer than 500 employees that is, there are those deemed more profitable than others, but what actually defines a profitable small business? A profitable business is the ability to generate a revenue that covers all the expenses, taxes and costs of the business but also has enough left over to feed the business owners’ pockets.


According to Sageworks analyst Jenna Weaver, service industries “are very common to find on the most profitable small-business list”. This is majorly down to their lower overhead and startup costs with many having the ability to start from a home office.

Now you know the top industries that turn the most profit, which one would you consider getting into?

Make sure you have the funds to start your new business, check out Lending Express to see what type of funds you can qualify for.

Disclaimer: The information contained in this article is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. The author accepts no responsibility for any consequences whatsoever arising from the use of such information.

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