Some companies are inherently more profitable than others. This may be because costs and overheads are low or the company charges a high fee for its services or products. Yet, no matter how profitable, all companies can be a challenge to get started.
The first question often asked by someone venturing into a new business is: What are the margins in this particular industry? While revenue growth is something that everyone wants, if it is not profitable, it will cost you much more than you think. Before switching to a new business plan, entrepreneurs need to consider the size of the market, the degree of competition and the average profit margins. Business owners can improve their profitability beyond the industry average, based on skills and optimal use of resources. Likewise, there are always clues that can help you make informed decisions about your potential business.
Here is the list of different types of companies that will be profitable in 2018
Accounting and tax services
- Accounting and tax services continue to be at the forefront with the highest profit margins. These companies are accounted for by many accounting firms because they prefer to outsource accounting services rather than administering them internally. In many cases, they can achieve significant savings and effectively manage their financial affairs. The profit margin for accounting services is well over 18%, which is the highest among the other small companies due to their constant demand, even in difficult economic conditions.
Private holding companies
- Excluding some of the biggest players among holding companies such as Berkshire Hathaway and still the industry has a profit margin of over 15%. Holding companies have their own investments such as shares and investment funds. Some of their other assets include works of art, real estate or anything of intrinsic value. It’s a pretty lucrative business, but you need specialized knowledge of the functionality of stock markets and how to make it profitable.
- The real estate sector has recovered significantly after recession and is now one of the top companies in terms of net profit margin. The advantage you have with a broker is their low cost of ownership. This will allow you to reallocate the budget for marketing and other functions, ultimately impacting the growth of your business. All you need is a broker license and you are ready to go. However, the industry is quite competitive and you have to do your homework before you intervene. In addition, it is directly related to the economic situation. A favorable environment will increase the profitability of the company and vice versa.
Lawyers and legal services
- Lawyers are among the most respected members of our society and it is not surprising that legal advice offers a 14.2% profit margin. High legal fees and low operating costs are a perfect way for profitable small businesses. To be an effective lawyer requires good communication skills that lead to strong connections with the members of the community. Most customers come from your connections, but you also need to allocate marketing budgets because they cannot be everywhere.
- A dental clinic is a good thing for doctors who do not want extremely stressful work in the medical field, but want to earn a lot of money. The high startup costs are a bit annoying because the equipment is quite expensive. If you can somehow increase the money through a loan or other means, the net profit margin is quite lucrative. There are many patients who return to the dental clinics, which really helps to maintain profitability. Let’s face it, we all have teeth to clean.
Rental of land and real estate
- All types of commercial, industrial and real estate leases are profitable companies. Commercial properties with high customer inflows generate unprecedented profit margins and, while the location is not ideal, the profit margin is stable. The only problem can be the high costs of land acquisition or construction costs. The average profit margin in the industry is 13.8%, which is quite appropriate for an investment.
General practitioners and health services
- Like other health consultants, lawyers and dental services, doctors rely on repeat activities. They cause significantly lower overheads and thus improve their profitability. Other small, profitable companies are health services. There has been some speculation about some ills in the healthcare industry, as they are associated with significant congestion to balance insurance services, but demand for health care is still rising and businesses are in full swing.
Car rental and leasing
- The car rental and leasing industry is still one of the most rewarding. As car dealerships struggle, leasing and leasing activities are booming as more and more people prefer cheap mobility. The initial investment for a lease can be very high, but the operating costs are comparatively lower, provided you have the necessary experience. This is one of the most profitable small businesses and should be on your list if you are planning to start a business.
- Websites have become “windows of all successful companies”, making high-quality and creative website designers very popular. Low expenses and high fees make web design a lucrative business, provided you have the creative and technical know-how!
- Companies are ready to invest in quality business consultants who can help them achieve the desired results. They are also prepared to pay large sums for good advice, which, combined with low overheads, makes business advice a worthwhile business. Of course, effective consultants need a sense of business and knowledge that is not necessarily the right opportunity for everyone.
- Apart from the cost of your vehicle to deliver the goods, independent couriers have no big overheads. Obtaining lucrative contracts from major courier companies can be cost effective. However, in a competitive market, winning lucrative contracts can be difficult.