Types of Small Businesses: Everything You Need to Know
There are different types of small businesses that come in every shape and size. 3 min read
Types of Small Businesses
There are different types of small businesses that come in every shape and size. One of the first things most people consider when they think about opening a small business is profitability.
Most Profitable Small-Business Industries
Payroll Services, Tax Prep, Bookkeeping, and Accounting Services
These sectors take the lead in the catalogue of profitable small businesses. It’s estimated that there is an 18.4 percent profit margin. Due to the lower overhead and the opportunity for repeat clients the Accounting industry tends to be the most profitable no matter how the rest of the economy is doing.
Management of Enterprises and Companies
These also make for very profitable small business types. With roughly 15.5 percent net profit margin. This industry is made up of privately-owned businesses comprised of holding companies and other bank holding companies.
Real Estate Broker and Agents
These people come in as number three on lists of the most profitable small business industries. The health of the economy plays a very large part in how the real-estate market is doing at any one time, but with low operation costs because all someone needs to get started is a brokerage or agent’s license. Also, the qualifications (professionally or education wise) are minimal. It’s possible to belong to niches within the real estate industry. Friends and family can give you leads which will cost you nothing.
Automotive Equipment Rental and Leasing
This industry has a healthy 14.55 percent profit margin. More and more people are requiring on-demand services. For this reason, people may be renting or leasing more cars on-demand through services and traditional rental companies. People have become accustomed to renting things that they only use occasionally.
This industry is very close to the profitability of the Rental industry with 14.48 percent profit. Because it’s a service industry, the practice of law has relatively low overhead and lots of repeat clients. However, it should be noted that it’s not only lawyers in this industry. Notaries, paralegals, Title search agents, and settlement officers are also members of this industry.
Dentist offices are also at the top of profitability with 14.41 percent profit. Repeat business in the form of recurring patients is one benefit. Being able to handle several patients at once is also beneficial. However, the cost of expensive dental equipment means that startup of such a business can be quite costly.
Landlords enjoy a profitability margin of 14.01 percent, which shows that renting nonresidential or residential properties is very profitable. Of course, there is that little matter of recovering the initial cost of purchase.
People spend years getting education, perhaps going into medical school debt, additional certifications, and licenses. While offices of Physicians are generally within 13.01 percent profit margin range it’s tough to get into the business.
Commercial Machinery and Equipment Rental
This business type typically has a 12.58 percent profit margin. Many, many businesses don’t own their own equipment but instead lease it. They include the cost of leasing in any bids they provide to potential clients.
These have a heavenly 12.41 percent profit margin. Just because the organization is not-for-profit doesn't mean it can’t build profits. It's just that you distribute those profits to a mission of the organization like poor or the homeless.
These cover a wide range of industries and topics (Management, Coaching, Scientific and Technical) with an estimated 12.05 percent profit margin. These businesses provide either consulting or management on a wide-range of expertise, including executive coaching, human resources, supply chain, marketing, training and environmental issues.
Cleaners and Laundromats
Almost all of us have dirty clothes. These services are useful for laundry and ironing for working-class and career-oriented individuals. Or anyone who does not have the time to do their washing because of a busy schedule or business. These services return clothes fresh and ready to wear.
Home Cleaning Service Professionals
These help home-owners and even apartment renters help with "house cleaning'. This is a very wide category. Some will clean your house, wash your clothes and prepare meals while others will wash outside windows and sweep the garage. If you already have a small business go here to find out how to create an unforgettable brand.
If you need help starting any type of small business or have any other legal need, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law School and Yale Law School and average 14 years of legal experience, including work with or on behalf of companies like Google, Stripe, and Twilio.