Starting a business is hard. The last thing you want to do is to start a business in an industry that’s fighting against you. Now, you may have found an interesting niche or a unique product that allows you to break into more difficult industries–that’s great.
But for many, deciding on an industry or type of business can be a difficult decision. Luckily, there’s quite a lot of data available to get us started.
Digging into the Data on Profitable Industries
A yearly study released by Sageworks ranks small business industries according to their profitability. Here’s their list for the top 15 most profitable industries of 2018, ranked according to the percentage of profit growth:
Financial services: 18.3%
Legal firms: 17.4%
Lessors of real estate: 17.4%
Management of companies and enterprises 16%
Outpatient care centers: 15.9%
Offices of real estate agents and brokers: 14.8%
Offices of other health practitioners: 14.2%
Offices of dentists: 14.1%
Specialized design services: 12.8%
Automotive equipment rental and leasing: 12.5%
Activities related to real estate: 12.3%
Warehouse and storage: 11.6%
Offices of physicians: 11.5%
Nonmetallic mineral mining and quarrying: 11.2%
Medical and diagnostic laboratories: 11.1%
Why Certain Industries Were so Profitable This Year
Industries that are human-capital intensive tend to be more stable. These industries include Accounting, Legal Services, and Offices of Other Health Practitioners. The only barrier to entry for these kinds of practices is certification and education.
Practitioners in these industries must invest considerable amounts of time and money in degrees and training. Thus, much of the cost of starting these businesses is paid up front. Also, because these services are so specialized, practitioners can charge a premium.
It’s also important to note that in new accounting and legal businesses, the cost of work space has drastically decreased due to the availability of coworking spaces.
Also, there are certain kinds of legal practices that tend to be more profitable than others. Litigation and intellectual property are currently the highest paying legal fields because litigation deals with high-profile, large-settlement cases and intellectual property deals with innovative new technology.
Landowners are also making a killing these days because the housing market has been doing quite well, increasing demand and filling up vacancies. Because of this, real estate agents and brokers have also been doing very well.
The constant increase in reliance on online goods sold by Amazon and other online retailers has shot up demand for warehouse space.
It’s important to note that some industries are profitable due to market demand shifts and others tend to be stable. Whether you choose to start a stable business or one that capitalizes on a demand moment, be aware of the kind of industry you’re entering.
Financing Your New Business
Once you’ve picked a business, no matter the industry, you’re going to need some capital to get started. We’re a bit partial to lending marketplaces, like Lendio, and here’s why. All you have to do is fill out an easy, 15-minute application to get your business in front of over 75 lenders.
Many businesses start getting offers within 24 hours. And here’s the best part–you can apply even if your credit isn’t a picture of perfection.