If you’re thinking of starting a small business in the Boston Metro, there are a number of service industries that offer good profit margins. Entrepreneur magazine listed the following businesses in a recent article, pointing out that most have low overhead while attracting repeat clients.
Overall, the service industry has low startup costs, and modest commercial space requirements. Some of these businesses can be operated as a sole ownership from a home office; others require more specialized equipment, and therefore greater investment.
Barriers to entry can be greater or lesser, depending on the type of business, and the education, regulation and equipment involved. Please keep in mind that the profit margins shown are averages, and that there are no guarantees of success in any particular industry.
Here’s a list of 10 profitable small businesses types, and their net profit margins:
1. Accounting, Tax Preparation, Bookkeeping and Payroll Services: 18.4%
- Low overhead, repeat clients
2. Offices of Real Estate Agents and Brokers: 15.19%
- Low barrier to entry, low overhead and startup costs
- High competition
3. Automotive Equipment Rental and Leasing: 14.55%
- Growing demand, good profit margins
- Higher startup costs
4. Legal Services: 14.48%
- Law offices, public notaries, settlement offices, title agents
- Requirements and income varies widely by type of service
5. Dentists: 14.41%
- Repeat clients, ability to handle many patients in a small office
- Specialized education required, expensive equipment and startup costs.
6. Landlords: 14.01%
- Multiple investment strategies, opportunity for passive income
- Capital requirements vary with type of property and financing
7. Offices of Other Health Practitioners: 13.30%
- Chiropractors, optometrists, acupuncture specialists. Repeat customers
- Specialized education required
8. Commercial Equipment Rental and Leasing: 12.58%
- Machinery, tools, vehicles, entertainment equipment, specialized products
- Expensive startup costs, equipment maintenance costs
9. Management, Scientific and Technical Consulting Services: 12.05%
- Includes human resources, marketing, specialized consulting, environmental experts
- Overhead minimal, but specialized education/experience required
10. Specialized Design Services: 11.4%
- Marketing, product development, graphic design, web services
There are many more businesses and industries to consider! The key is to match your talents, education and resources to a business that you feel enthusiastic about. And while profit margins are important, choosing a business by profit potential alone will not assure you of success. Think about your own “mission statement” and reasons for being in business.
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