The 10 Most Profitable Small Businesses

By: Susan Ward

Despite the seeming dominance of large corporations, small businesses continue to be the engine of the North American economy. According to the U.S. Small Business Administration (SBA), approximately 550,000 new small businesses are established every month in the U.S., creating two out of every three new jobs. Over half of Americans own or are employed by a small business.


While it is common knowledge that most successful small businesses start with a great business idea backed by a solid business plan, some businesses and industries have higher profit potential than others. If you are an entrepreneur or investor looking for a new small business opportunity, limiting your choices to the most profitable small businesses listed in this article is one of the best ways to ensure success.

In addition to profitability potential, many of the businesses listed below are experiencing strong demand due to the continuing trend by corporations to outsource business functions such as accounting, payroll, information technology, social media, legal services, and even marketing. Many former full-time employees of larger businesses have become self-employed due to outsourcing, and the trend shows no signs of slowing down.

Here are 10 of the most profitable small businesses as ranked by Sageworks in order of average profit margin and listed with the corresponding North American Industry Classification (NAICS) Code. For comparison, the average profit margin of companies on the Standard and Poor's (S&P) 500 was 11% in 2017.

1) Accounting, Tax Preparation, Bookkeeping, and Financial Planning
    Average Profit Margin: 18.4%

2. Real Estate Leasing
    Average Profit Margin (Leasing): 17.9%

3. Legal Services
    Average Profit Margin: 17.4%

4. Outpatient Clinics
    Average Profit Margin: 15.9%

5. Property Managers and Appraisers
    Average Profit Margin: 14.9%

6. Dental Practices
    Average Profit Margin: 14.8%

7. Offices of Real Estate Agents and Brokers
    Average Profit Margin: 14.3%

8. Other Health Care Practitioners
    Average Profit Margin: 13.3%

9. Management, Scientific and Technical Consulting Services
    Average Profit Margin: 12.1%

10. Warehousing and Storage
    Average Profit Margin: 11.6%

Originally published in The Balance Small Business where you can find additional information and statistics.