The Types of Small Businesses That Make the Most Profit

The Types of Small Businesses That Make the Most Profit

If you’re looking to start a profitable business idea, it might be time to brush up on your number crunching skills.

Over the past 12 months, accounting services topped the list of the 15 largest sectors in the small business sector by net profit margin, according to financial information firm Sageworks. The list was compiled from a database of more than 1,000 financial reports from private companies with annual revenues of less than $10 million.

According to Sageworks data, accounting tops the list for generating the highest profit margins, but the rest of the list is dominated by service-oriented companies in healthcare and real estate.

Sageworks analyst Jenna Weaver points out that many of these service sectors consistently rank high on lists of “most profitable” sectors. “Service-based industries often have very healthy bottom lines,” she says. “Their overhead and equipment costs are often relatively low, and much of the time, it doesn’t take a lot of upfront investment to get started.”

Weaver adds: “Often times, in cases like consulting, accounting, and legal services, you can get started right inside of your house, without even worrying about renting a space.”

Check out the 15 industries with the highest net profit margins for the 12 months ending July 31, 2014. For aspiring entrepreneurs, this may be a great place to start when coming up with new business ideas. (Note: Net profit margin excludes taxes and is adjusted to include owner compensation above market salary.)

Industry Net Profit Margin
Accounting, Tax Preparation, Bookkeeping, and Payroll Services 20.00%
Oil and Gas Extraction 19.20%
Commercial and Industrial Machinery and Equipment Rental and Leasing 17.70%
Legal Services 16.50%
Offices of Real Estate Agents and Brokers 14.80%
Offices of Physicians 14.80%
Offices of Dentists 14.50%
Management of Companies and Enterprises 14.10%
Lessors of Real Estate 13.60%
Offices of Other Health Practitioners 13.10%
Support Activities for Mining 12.30%
Warehousing and Storage 11.60%
Management, Scientific, and Technical Consulting Services 11.60%
Outpatient Care Centers 11.50%
Activities Related to Real Estate 10.60%


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