The 15 Most Profitable Industries to Start a

Business (and the 15 Least Profitable)

It's no surprise that a number of the most
Want to start a new profitable industries provide services rather than
sell products, which means their operations don't
business? Here are require significant capital investments or major
investments in raw materials--which is good
some ideas for which news for the average entrepreneur who can't
afford to invest millions in a startup.
industries to consider So while you may not be able--or interested--in
and which to possibly starting a business in one of these areas, the
following should at the very least give you some
avoid. good ideas...and some good ideas for what types
of businesses you might want to avoid.
Thinking of starting a profitable small business?
Looking to partner with or sell services to other
profitable small businesses?

Or just hoping to avoid starting a business in an

incredibly challenging industry?

Sageworks analyzed data from thousands of

private company financial statements and used
net profit margin as the metric to rank industries.
Here are the 15 most profitable industries in 4. Grocery and related product merchant
2016, ranked by net profit margin: wholesalers: 1.9%
5. Lawn and garden equipment and supplies
1. Accounting, tax prep, bookkeeping, payroll stores: 2.0%
services: 18.3% 6. Miscellaneous durable goods merchant
2. Legal services: 17.4% wholesalers: 2.3%
3. Lessors of real estate: 17.4% 7. Petroleum and petroleum products merchant
4. Outpatient care centers: 15.9% wholesalers: 2.4%
5. Offices of real estate agents and brokers: 8. Grocery stores: 2.5%
14.8% 9. Automobile dealers: 3.2%
6. Offices of other health practitioners: 14.2% 10. Building material and supplies dealers:
7. Offices of dentists: 14.1% 3.2%
8. Specialized design services: 12.8% 11. Continuing care retirement communities
9. Automotive equipment rental and leasing: and assisted living facilities for the elderly:
12.5% 3.3%
10. Activities related to real estate: 12.3% 12. Other motor vehicle dealers: 3.3%
11. Warehouse and storage: 11.6% 13. Home furnishings stores: 3.3%
12. Offices of physicians: 11.5% 14. Furniture stores: 3.4%
13. Nonmetallic mineral mining and 15. Beer, wine, and liquor stores: 3.4%
quarrying: 11.2%
14. Medical and diagnostic laboratories: Note: The average for all industries was 7.7 percent,
11.1% and the data excludes taxes but does include owner
15. Other schools and instruction: 10.5% compensation in excess of market-rate salaries

And now for the least profitable industries:

1. Oil and gas extraction: -7.6%

2. Support activities for mining: 0.6%
3. Beverage manufacturing: 0.8%