The Best New Businesses with High Profit Margins
While some people might be content just owning and operating a business where they make enough profit to get by, other people want a business with very high profit margins.
Having high profit margins will increase the amount of money you take in, which will maximize your ability to reinvest in your business, hire more people, and extract as much money as you can from the business through your salary.
Because the risks of business are so high [source], it’s no surprise that most people want to ensure the safety of their investments by starting a business that’s likely to deliver a healthy return.
Here are 11 business ideas that have high profit margins.
Accounting services - 18%
Accounting firms have always enjoyed low overheads and high profit rates. Accounting services are, after all, services you can provide as long as you are qualified, and have adequate equipment on hand. Finance is an area of business no company should want to cut corners on, so many companies are willing to pay premium rates for this service.
Accounting is also a field where automation is making its presence felt. Data from the Rosenburg MAP survey [source] found that automation is allowing a lot of firms to maintain levels of service with fewer employees, particularly with entry-level duties like data entry and financial report generation.
With low overhead and the potential to eliminate operating costs through automation, accounting services can be incredibly lucrative.
Cleaning services - 6%
The cleaning industry also boasts relatively low overheads. The only things you really need to invest in are the equipment, staff, uniforms and protective equipment, depending on the type of cleaning your business specializes in. In this digital age, you may not even need an office - some cleaning businesses can be run right out of the owner’s home.
To make a cleaning business really profitable, you’ll need to scale it up as much as possible. One employee working 30 hours a week at a 6% profit margin won’t get you too much profit, but 100 employees working 3,000 hours a week will.
Digital marketing - 10.5%
Digital marketing has overtaken traditional marketing in its importance to businesses who want to get their names, products and services out there. With COVID-19 increasing the trend of companies digitizing their operations, it’s even more important for them to have their own polished digital presence.
A digital marketing agency will offer their customers some of the following services:
- SEO
- Copywriting
- Social media management
- Email marketing management
- Digital branding strategies
- Content creation
- Graphic design
Like our other examples, starting a digital marketing agency has very few overheads. All someone really needs to start a digital marketing agency is experience in the field, computers, and maybe some specialty software.
App development - 20%
As companies go digital, they’ll want their own proprietary software to supplement their online offerings. App developers can work with these companies to bring their projects to fruition by building a dedicated smartphone app.
Most developers have degrees in software development or computer science, but a degree isn’t strictly required. You can take advantage of many learning platforms, including coding boot camps [source] and online learning companies to learn how to code.
Warehousing and storage - 11.6%
As e-commerce continues to rise in prominence, companies will rely more and more on warehousing and storage to store their products. So, those companies that recognize this demand and take steps to meet it will be rewarded.
Building a warehouse can be expensive, depending on the size [source]. However, the initial investment will be offset once you’re able to start charging your customers to rent out your space. Of course, you can also buy the warehouse built, and simply rent it out, too. Warehousing can also be a fairly low-maintenance passive income stream, as there are few resources required to manage a warehouse.
Legal services - 17.4%
Like with digital marketing and accounting services, most individuals and companies will require some kind of legal service at some point in time. That’s why becoming a lawyer and starting your own firm can be so profitable. Different types of law you could specialize in include:
- Corporate
- Family
- Litigation
- Employment
- Human rights
- Criminal
- Wills and trusts
- Bankruptcy
If you want to set up your own law firm or consultancy, you’ll need office space to meet with clients. You’ll also need basic computer equipment, some specialized software, and insurance for your practice.
Funeral services - 10% - 30%
Funeral homes provide a vital service in difficult times for people who need it. Providing this desperately needed service can return a healthy, sustainable business that can last for years.
Investing in the initial start-up costs for delivering funeral services can be very expensive, with furniture, embalming equipment, preparation rooms and other costs can run upwards of $250,000 [source]. But once initial costs are covered, the returns on your business will be substantial, with the average funeral costing around $15,000 [source].
Online learning / tutoring - 11%
Because of the pandemic online learning shot to prominence, out of necessity. With many people forced to work from home, parents and teachers needed a way to continue their children’s education, and online video streaming platforms like Zoom allowed them to do just that.
Once the efficacy and scalability of online learning have been proven, it’s unlikely that learning will revert to traditional classroom modes in every instance. Online learning can be used in all sorts of non-school-based learning styles, such as cooking classes, writing workshops, private tutoring, and more.
To start your own business as a tutor, all you really need is expertise in your field, a good internet connection, and some video equipment. The overheads are low, so your profit margins are likely to stay quite high.
Food trucks - 8%
The restaurant business has a notoriously high failure rate, but that doesn’t mean there isn’t money to be made. Food trucks are a little more viable than traditional restaurants, with about 60% closing within the first three years, meaning another 40% go on to succeed. If you can get the initial start-up formula right, you can cultivate a loyal following that will bring people to your establishment every day.
Some food truck owners are able to make it big with their ventures, raking in millions of dollars [source]. However, more reasonable sales for food trucks in big cities tend to be around $20,000 - $50,000 in the US [source]. In fact, coffee vans have been listed as one of the most profitable small businesses to open in 2021.
The biggest barrier to entry for starting a food truck is the initial investment in the truck, cooking equipment, food, and fuel.
Keep your profit margins high with a top-of-the-line POS
Keeping your business profitable is vital for maintaining its longevity. In industries like retail and hospitality, where margins can be very tight, it’s incredibly important to keep a close eye on all your incomings and outgoings.
With Epos Now’s top-of-the-line POS systems, you can manage things like inventory, sales reports, food cost percentage, clothes prices, and more. You can also:
- Track single item performance so you can forecast with accuracy
- Receive stock alerts so you never miss a selling opportunity
- Easily add, edit and bundle items to create new revenue opportunities
- Access reports and data from anywhere
- Track sales, profit, and trends in real-time to understand more about your business
- Identify your top-performing products and staff members
Contact our team to find out more about our systems.
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