Odds are only about 50-50 that your small business will survive five years or more, according to data from the U.S. Labor Department, Business Employment Dynamics (BED).
This proves that the road to success isn’t always smooth for small business owners. In practically every market, there are older established businesses, larger competitors with deeper pockets, and a host of other challenges.
How do you win then? By joining a profitable small business industry.
The following are some of the more profitable types of small businesses, along with the key to becoming one of the most profitable small businesses, placing you within the 50 percent who survive five years—and preferably more.
It’s not sexy, but accounting and bookkeeping offices are among the most profitable small businesses. This field isn’t hurt by fluctuations in the economy as people always need to have their taxes done, manage payroll and other financial duties.
Overhead is relatively low compared with many other fields. Although there are a number of software options for both personal and business income taxes, the complexities of tax and labor laws almost guarantee that demand for these businesses won’t subside.
If you live in an area that is typically subjected to a healthy amount of the white stuff each winter, you have one of the most profitable small business industries right outside your window: snow and ice removal. According to John Allin, founder of the Snow & Ice Management Association, snow removal typically has profit margins ranging from 55-65 percent and de-icing is slightly higher, at 70 percent.
The key to succeeding, according to Allin, is being convinced you can make a profit doing this type of work. He adds that it also helps boost your small business success by remembering that you’re a professional, by taking some type of non-refundable retainer (in case it doesn’t snow as much as expected), and by being prepared.
Medical offices are relatively stable businesses, in spite of all the turmoil with the debate about health insurance. This sector includes physician offices, test centers and private clinics. Although there are a few regions that are over-saturated with medical services, this is not the case with most of the U.S. Insurance costs can be high, depending on your specialty, other overhead costs are generally low. Given the aging population, the demand for physicians and other services is unlikely to subside anytime soon.
The aging population is a key factor in the overall health industry, with growing demand for specialists, such as physical therapy, optometry, and dietitians. Additionally, millennials have far more interest in healthy living than their predecessors and an openness to such services as chiropractic, acupuncture and holistic treatments, making these excellent opportunities for small business owners.
Can you speak Chinese fluently? Maybe your second language is Japanese? If you can speak and write in one of these languages (in addition to English), then you already have what it takes to create a profitable small business in translation services, according to Translation Rules. They reported that these are the two languages that have the highest demand and the lowest competition.
Another reason this is set to become one of the most profitable small business industries is because of the expected growth. IBIS World indicates that translation services in the U.S. will grow annually by 5.8 percent until the year 2022, which is more than double the rate of the U.S. gross domestic product (GDP).
Nearly every business needs to be on the web and have a social media presence, making this one of the most profitable small business industries today. While there are major players in this field, they often charge thousands of dollars to create and maintain sites. Many small businesses have found success focusing on the local market, where clients have smaller budgets.
If your small business focuses on helping businesses around town use social media, it can be very lucrative without a lot of overhead costs.
The real-estate market fluctuates depending on the economy. But this area is consistently among the most profitable small businesses as there are low operating costs for real estate brokers and agents. Additionally, start-up costs are low as you simply need a real estate license to get started. It can be very hard to get established, but successful agents and brokers can bring in a lot of money.
Overall spending in the pet industry for 2015 came in at a record $60.28 billion, according to the American Pet Products Association (APPA). With no signs of slowdown, this is a great market for the small business owner. You can start a pet sitting business with little overhead, but it does require hustle to get those first few customers.
Pet grooming is also a great way to get into this market, but your expenses in terms of training and providing a location for your services may be steep.
One way to substantially improve your chances for profit is to be in the right field. As with the general economy, service businesses are among the most successful small businesses, making creating one the key to outlasting the 50 percent that don’t survive long enough to see five years. Service businesses can range from the highly skilled professions, such as medical professionals and accountants, to those which require less formal education, such as pet sitting and creating web sites.
It’s tougher for small businesses that sell products, such as books, clothing or sports equipment, given the competition from larger chains and internet retailers. The key to success—to creating one of the most profitable small businesses today—is to offer unique products and top quality customer service, something that your larger competitors can’t provide.