This article is a guide to the most successful and profitable small business in 2020.
However, before we list your next significant profit potential, we want to make sure you have a clear understanding of both the risks and rewards of planning business and undertaking entrepreneurship.
Anyone can start a business. You can find tips for starting in almost any publication.
There are tons of small business ideas and types of business.
Finding profitable small businesses can be another story.
Do you have business ideas to start? Great!
Now the question is, “Can you grow your business,” and “Can you make it profitable?”
Many people try. Unfortunately, most people fail. The business trends are undeniable.
You can have a startup idea for a great online business.
Statistically, the trends for the past several decades remain the same.
Out of every one-hundred businesses that start in 2020, only 40% of those small businesses will be successful and make money.
From pet sitting and dog walking to personal wellness and security systems, approximately thirty percent will break even, and some thirty percent will end up losing money.
As you can see, the odds are stacked against you right from the start when looking for a successful and profitable livelihood.
Once you take those stats a step further, it’s essential to know the risks before you quit your fulltime job and start.
Longer-term, twenty percent of small businesses don’t make it past their first year.
The second year in the biz is not too kind as almost thirty percent won’t make it past year two.
The steepest drop occurs by year five as the failure rate is close to fifty percent.
Finally, by the tenth year, almost 70% have closed their doors.
Ideas are bountiful. Profitable small businesses are a bit more challenging.
What are the small businesses that are the most successful?
The simple answer is, those that make money.
The first thing you need is an opportunity.
Once you have identified your profitable business ideas, you need to develop a game plan.
The opportunity may be a great way to make some money, but will it be a profitable venture?
All business owners believe that they can be successful. To be profitable small businesses require money or working capital to get started.
This funding can be SBA loans or business lines of credit.
You may want to review The Ultimate Guide to Small Business Loans to gain a better understanding of your options.
What are the most profitable businesses and profitable industries?
Whether you’re thinking of getting a food truck, real estate, or graphic design, you need a pursuit that provides enough profit margin to cover your overhead costs.
Scroll below to see some of the most profitable small businesses.
Regardless of the size of your company, every business owner needs to know three numbers, Lemonis says:
1. Your annual sales revenue, “based on a trailing 12 months, not the calendar.”
2. Your gross profit margins.
3. And your expenses as a percentage of your gross profit — “not a percentage of your sales. You pay your bills with gross profit — not with revenue.”
If you want to run a successful business, you have to know your revenue, gross profit and expenses “inside out,” Marcus Lemonis.
Your small business needs to leave enough net profit margin at the end of the day to pay bills and save some money for a rainy day or your next great idea.
Profitable small businesses all require owners that make sure they know their numbers and business finances.
At some point, you need to become familiar with balance sheets, business expenses, revenue with an eye towards profitability.
I’m a bootstrapper. All my initial start-ups required small initial investments. Did they all make money?
I’m fortunate (or lucky) that a $20,000 credit card advance turned into a platform that helped me raise $5M from a hedge fund.
So how did I manage the risk? My approach parallels my 17 years of Wall Street experience and the stock market.
I looked at the business opportunity as an investment. In simple terms, I consider the monetary risks and financial rewards.
I think of the opportunity and the investment no different than a stock purchase.
What amount of money would I invest in a stock to realize an absolute gain (hint: don’t ask a stockbroker)?
That’s the simple part. The tough part is determining how much you are willing to lose.
The difficulty is knowing when to cut your losses.
Whenever I purchase a stock or start a business, I determine how much I am willing to invest and, maybe more importantly, how much I close.
When do I call it quits?
To do this, you need to be extremely disciplined. Unfortunately, for most individuals, they don’t have the mental discipline to stick to their decision.
The challenge for most people is you become too emotionally attached to the business.
Once this happens, you become blinded by the need to be “right” versus making money. It’s game over.
It’s the same whether buying and selling stocks or starting and then closing the business.
This strategy serves me well. You must know your numbers. You need to understand how long you can survive at your current churn rate. Losing some money is OK.
Losing it all and not having some dry powder to try again is not.
I believe in “go big or go home.” But it doesn’t mean going home empty-handed. It also doesn’t mean that you can’t cut expenses, even if it means layoffs and downsizing.
If that’s what it takes to survive another day, reduce the fat, and lose the weight.
You need to distinguish between two questions.
The entrepreneurs and small business owners across the United States seek their next startup and success stories.
One key aspect of business success is understanding the differences between a great business to start and the most profitable business.
Any time you have a profitable small business, you have a good business.
The bigger question is about the enjoyment and the satisfaction you derive from your job.
Oh yeah, if you are a small business owner, not only are you the Chief Executive Owner, you’re very frequently the only employee.
It becomes a lot less glamorous.
All kidding aside, if you don’t like what you are doing daily, the profit margin is irrelevant.
Do you agree?
For me, success isn’t even about money. It’s about getting to do what you love and supporting yourself.
Everything that comes after that is a bonus unless your only goal is to be rich.
If that’s your goal, you’re going to find out that once you have a little bit, you want a lot.
Then once you have a lot, you want a lot more.
– Bobby Bones
You have a bunch of ideas of business in your head. Here is a great question to ask yourself.
“If I had all the money in the world, what would I do?”
I bet that the answer had nothing to do with profit margins. Right?
That’s how you get to your passion. There are endless possibilities and opportunities. Use your imagination. What are your experiences?
Now ask yourself, is someone willing to pay for your services so you can earn money?
Is what you offer in high demand?
Are your potential customers looking for something different?
Thousands of small businesses offer the same essential services. Take real estate.
How many real estate agents are there in your community?
A dozen? One hundred? More?
If real estate and real estate brokering are your passion, it flat out doesn’t matter.
What we know is real estate will always be in high demand and a top business. You just need to get started.
“A big business starts small.”
Here is a list of businesses that can make it HUGE in 2020. From New York to San Francisco, from homebased businesses to local business, you don’t necessarily need a bachelor’s degree to be successful.
All you need is some good prior work experience, solid well-thought business plans, and a lot of focus and determination.
It doesn’t matter if you’re on a street corner selling products or selling online.
There are plenty of choices we did not list.
Becoming a business accountant is a perennial winner whether you’re looking to start a small one-person accounting firm, or a full-fledged accounting services company with tax preparation and bookkeeping.
There is no question owners have enough challenges running their companies.
The last thing they need is to master the tax code, tax preparation, or becoming a CPA or tax preparer.
Having a staff of accountants and bookkeepers can lead to providing payroll services as well.
If you are a bookkeeper, your services are in high demand by the business owner.
In the beginning, it was eBay and auctions. Take all your junk and sell it. Then it evolved to finding other people’s stuff and selling it.
Now Amazon rules the world of ecommerce.
There are product merchant wholesalers who do not keep any inventory and drop ship to the sellers of unique one-of-a-kind items.
Search the world for something and sell it.
You can even help your customers with tax prep. Most small businesses don’t know their numbers. That’s why your services are so valuable.
Cars get more sophisticated every year. As long as you have automobiles, you’ll need auto repair.
A good repair shop is a gem, especially for the electric, hybrids, and foreign makes that always need repairs.
Better yet, go mobile. Maybe add a car wash?
Think about the vehicle that can’t make it to the shop or the busy exec who wants it done in the office parking lot.
Writers, blogging is an opportunity to get passionate and get paid.
Get enough followers to your blog posts, and you can monetize your blog with advertising, sell digital products, or build your street (or web) credibility.
Perhaps you collect your posts and create an eBook that can you can market.
Think about this when considering this business.
You can turn a part-time gig into a full-time venture that can cost less than $100 to start. All you need is a web site, an email address, and you’re off to the races.
This venture is an opportunity where you can have multiple revenue streams.
For all of the C-suite executives who took early retirement or the executives just tired of the rat race, this is for you.
The consulting business is an excellent opportunity to share your knowledge with the new owner or entrepreneur thirsty for what you know.
Being a consultant gets you into the coaching industry. You take your expertise and put your stamp on the startups.
Maybe start a newsletter to market your training.
Not to be outdone by Business Consulting, offering a suite of services are in high demand.
These can range from expertise in software to time management, customer service marketing, and more.
It helps to know how business functions.
Whether you go it alone or band together crucial employees, the most sought-after services include web design, accounting, marketing, consulting, and taxes.
Start with one service and build from there.
House cleaning can be a very lucrative field. If you’re a sole operator or a working couple, there is plenty of profit opportunity.
Depending on your location, you charge customers from $8 an hour to as much as $60.
The requirements are minimal, and barriers to entry are low. As an individual averaging $45 an hour, you can make as much as $67K per year.
Establishing a commercial cleaning company and related services can pump up the volume to $150,000 a year.
These businesses can be built quickly, and anywhere, offering lots of flexibility and can even be a great home bases business.
The key to success is having a balance of technical skills and excellent management skills.
If you need additional skills and education, many community colleges offer coursed to brush up on your weaknesses.
Having the tools and knowing how to use them enables you to stand above the do-it-yourself crowd.
You need a background, and each state may require certification or license.
The higher your specialization, or knowledge, the more profit potential you have.
What’s better than a homemade cookie?
If you love making baked goods and have the unique recipe, the easiest way to scale your love for cookies is starting from your home and selling them online.
Once you gain a large enough reach and following and a stream of repeat customers (and referrals), moving your operation off-premises to a kitchen facility can make what starts as a love of cookies to a thriving opportunity.
Social media and some snappy photos can boost your returns.
According to smallbiztrends.com, the daycare industry and childoriented businesses look to enjoy some of the fastest growth in 2020.
Do you have a love for children?
Do you enjoy creating enrichment activities?
The challenge is the cost of starting a childcare center. If you are a teacher, you are perhaps the most natural candidate for these businesses.
Have you noticed all the Amazon delivery trucks on the road recently?
That could be you.
Yup, becoming a part of their team, is within reach. They have reasonable startup costs, and they will help you set up your business even if you do not have logistics experience.
You just need a passion for delivering boxes.
Working for a large organization like Amazon has its advantages.
Are you looking to be more independent?
Try your starting a courier service you run independently. Couriers have lots of flexibility, and you can start by being the only driver.
Smile. Dentists have ranked consistently as a top ten career choice.
You must know to go into the field of dentistry takes eight years to complete your undergraduate degree and graduate dental schooling.
The pay is excellent, and there is always someone needing a tooth extraction.
The average dentist earns $180,000 per year.
This career puts you in the top 5% of all wage earners.
The challenge is the cost of education and repaying your loan.
The truth is that once your practice and patients grow, you must prepare for the highly repetitive nature of the job.
Perhaps this is why dentists rank as having one of the highest suicide rates.
Like the dentist above, physicians can earn a lucrative income.
Rather than the dental school, you’ll attend medical school. They are making $150K a year as a general practitioner to significantly more as a specialist is financially rewarding.
Starting your practice as a medical profession requires the same set of entrepreneurial skills as any other biz-op.
One of the significant differences can include increasing government regulation, insurance, reimbursements, coding, billing, and liabilities make this profession very challenging.
Perhaps consider adding an MBA to that medical degree.
Uber and Lyft both present an opportunity to earn $25 and $35 an hour, respectively.
Although not as profitable as it was several years ago, it still makes a decent side hustle.
Jumping on the app-based delivery trade is one alternative, as well as using your car as advertising by using Wrapify.
Think about this; Do you know anyone without a cell phone?
How about a computer or tablets?
With the average cost of these electronics getting more expensive every year, consumers are more likely to seek an expert in electronics to make the repairs.
Many industries fall under the entertainment umbrella.
These can range from recording studios, events and social media, video editing to online entertainment portals.
Love dancing? Open a dance studio?
The key here, like any business, is to find your passion, skill set, or expertise.
Who doesn’t love to eat? Foodies are everywhere.
Opening a restaurant can be a daunting financial burden.
Bear in mind that that sixty percent of all new restaurants fail within the first year.
The top 3 reasons for restaurant failure include relatively low startup capital, poor knowledge about competition, and the wrong location.
Starting with food trucks can alleviate many of these challenges.
Lousy location just move your truck.
Too much competition around your physical area? Move your truck.
Just remember you can’t escape Yelp.
An attractive alternative to the restaurant and food truck is the catering business and catering services.
While a startup may only earn $30,000 a year, a high end or more established catering service can earn $80K or more.
If you own a restaurant or food truck, perhaps consider adding another revenue channel to expand your reach.
When you start as a freelancer, you may only earn about $17 an hour.
The compensation is a reflection of your capabilities. A more experienced freelance writer might average closer to $50 an hour.
Based on a 36-hour work week, you’re looking at between $31,824 to just under $100K a year.
Naturally, if you have a more specialized background, you can earn more. Examples include (no particular order)
• Web developer $60/hr.
• Writing copy $35 -$250/hr.
• Legal Advice $120/hr.
• SEO $150 – $250/hr.
As they say, the only guarantees are death and taxes.
While many consider death to be morbid, funeral services are just one of the many functions offered by funeral homes.
The requirements include either an associate degree in funeral service or mortuary science.
Top owners/morticians can earn close to $100K a year.
Have a website or websites?
Want to earn $100, $200 or $300 a day?
Drive traffic to your site, irrespective of the niche and audience, and it can mean up to $140,000 a year with a small home office.
This niche requires a bit of work, but what doesn’t nowadays? What do you have to do to make it possible?
Do you have the ability to copywriting about 200 to 250 fantastic articles or blog posts a year for two years?
That means cranking out about one per day.
Not a bad gig for sure.
If you can do it, then look at Google AdSense.
The beauty here is you can start small to generate search engine results and ramp it up.
Competing against Walmart and Target superstores is not a desirable task.
So, how do you compete?
Think niche. There a lot of ways to skin the cat and focusing on a narrow market can make the difference between profits and loss.
Here are but a few of the hundreds of niche markets you might consider:
Sometimes known as a jack of all trades, the handyman business is growing.
Think Angie’s list or Takl.
If you have the skills and the tools, it’s the perfect part-time opportunity that can grow to something more lucrative.
The significant advantage is being your own boss to do many of the things you might be doing for someone else.
Are you a go-getter?
Making about $90,000 is realistic doing some of the things busy homeowners (or renters) don’t have the time or desire to do.
Let’s look at the macro picture.
Healthcare is huge.
In the United States, they believe that some 20 to 25% of our county’s expenditures will be on personal health care.
That’s $70 to 90 BILLION dollars a year.
The opportunities are too many to list. With more and more seniors, suffice it to say that healthcare is here to stay.
The question is whether you can make money from your hobby.
Let these quotes serve as your motivation.
The $100,000 question is, can you turn your hobby into a profitable business?
Are you an expert in computers, data, or computer networking? IT support is now critical for any business.
Every business, large or small, has computers and needs IT support.
Few owners have the knowledge or skills to do more than plug them into the wall. Enter the IT specialist.
You can start with low overhead, and IT support is in significant demand.
According to the U.S. Landscaping industry, we are spending approximately $61B annually.
There are startup landscaping equipment costs that range between $15k – $20K.
From lawn care and gardening, planting flowers and mowing lawns, the average owner/operator can earn somewhere between $30K to $85 a year.
No pun intended, but if you look to” grow” a commercial business, the profit potential is much more.
To become an attorney, you must attend law school.
According to the Bureau of Labor Statistics, attorneys average about $120 a year in income.
Offering legal services to corporations can range from $150 to $325. Top-notch big city attorneys can earn up to $1000 an hour.
All businesses need legal services at some point.
Graphic designers create posters, brochures, ads, and even websites.
This business model fits perfectly under the home-based and freelance models.
Top-notch graphics designers can earn $75 to as much as $300 an hour.
While traditional manufacturing startup costs can exceed $1M, several opportunities are far less capital intensive.
The reason is the advent of new niche products and technology.
Things like 3D printing and custom assembly make this industry profitable, like the old standards of toy and paper manufacturing.
Contrary to common beliefs, there are profitable home manufacturing ideas like Agarbatti, artificial flower, and biscuit making, to name a few.
Digital marketers have a wide range of skills. These include content marketing, blogging, SEO web design, social media, and more.
Like many of the ideas shared above, you can set your price. This price ranges from $10 to $20 an hour to as much as $300.
Determine your area of expertise and use a service like Fiverr or Upwork to test out the waters before you jump right in.
Turn warehouses into storage facilities with inventory from manufacturers or retailers. Turn a soundproof section into a place for meetings.
Maybe take an industrial space and convert it into a hip event or party space. Perhaps a sports or fitness facility will do well.
Extra office space can is ideal for training seminars or workshops. Maybe create a space for entrepreneurs.
Do you have expertise in a subject matter? Why not teach it online as an ecommerce business?
Know-how training is always at a premium. If you need more content, you can always find other instructors.
Check out https://www.udemy.com/ to see what the competition is doing.
Teaching online courses can be a lucrative and profitable venture. Remember, you need to be excellent in your content.
Party planning is not just about birthday parties and weddings. Event planning for corporations puts you squarely in the entertainment or catering business (see above).
Like everything, you can earn a wide range from maybe $50k a year and certainly push it to $75k or more. Not bad for being a party animal.
Are you looking for a great business to run from your home? Payroll services are a viable option.
Having an accounting background is an advantage but not a requirement.
You can even outsource all the payroll functions and just concentrate on bringing in the customers.
While this is not a get-rich-quick opportunity as you add clients, you can build a great long-term residual income.
The most significant thing is to keep your customers happy.
Personal training is an excellent way to stay in physical and fiscal shape.
Whether training at fitness centers, a gym, in a mobile truck or at your client’s home, you can earn between more than $130,000 a year.
As the population gets older and obesity rates increase, there is a need for those that focus on wellness. Be an inspiration to your clientele.
We’ll batch property management, property maintenance, real estate sales, along with working your local neighborhoods and houses, whether its rent or sell.
The average property manager makes about 10% of the rent roll.
Property maintenance involves any of the repair issues from plumbing to electrical to the structural.
Social media, including Facebook, Twitter, LinkedIn, Instagram, have scores of money-making opportunities.
Think YouTube Channel.
Social media is more about connecting people and not selling.
It can be the blend of working with influencers and connecting them to your product or advertising it directly to consumers.
You don’t need a marketing team, but you will need marketing materials to leverage your website traffic.
The highest-paid influencers can make $500,000 for a single post.
Teenagers can start early in the entrepreneurship game. They can help with tutoring or doing homework.
Believe it or not, a top student can earn up to $50 an hour for their knowledge.
Adults who enter the tutoring game can also find it very lucrative.
Whether it’s teaching subject matter to elementary, middle high school, or college-aged kids, there is money to be made.
Plus, you have the ACT and SAT type exams. Full-time tutors can earn substantial 6-figure incomes.
Who says hard work doesn’t pay off.
The transportation industry is a real money maker. However, competition is fierce.
More fail their first year than make it.
Just because you are a great trucker doesn’t mean you’ll be a great owner. But know that if you are, you can make close to $200K a year.
The relative costs to start are reasonable. Plus, there are several options.
These options can be driving services for seniors and grandma to double-decker bus tours.
Would you like to see the world?
Why not do it as a living. There is nothing like recommendations from world travelers.
The typical travel agency makes about $30,000. Top ones earn six figures.
What would we do without the internet?
Here is just a smattering of the almost limitless possibilities:
Take your pick. All can start part-time and can grow into wherever your dreams take you.
Money making small businesses are right in front of you. Just follow the trends.