Virtual Entrepreneur

The Most And Least Profitable Businesses To Start

Forbes:
Entrepreneurs start companies for all sorts of reasons. Maybe they have a passion, like being in control, want more flexibility - or even hate their current jobs.

But no matter the inspiration, one thing’s for sure: They’d better make money. A rising revenue line might make for good cocktail conversation, but if you don’t turn a profit - and keep turning one - you won’t be an entrepreneur very long.

With the help of Sageworks, a Raleigh, N.C.-based private-company data provider, Forbes.com has assembled a list of the 10 most and least profitable businesses - on a pretax basis - that aspiring entrepreneurs might hope to launch. Average pretax profits ranged from a juicy 25% to a knee-wobbling negative 7%.

The data were drawn from recent financial statements for nearly 100,000 privately held companies in the U.S. - most with annual revenues under $10 million - and bucketed by Internal Revenue Service classifications. We included only industries for which Sageworks had data from at least 50 companies - 750 in all - and eliminated categories too broad to be meaningful.

While based on U.S. companies, the numbers also shed light on global profit trends. ‘The dynamics of each specific industry are slightly different in each country,’ says Sageworks founder Brian Hamilton. ‘[But] the relative profitability of these industries - on a pretax basis - holds, generally, throughout the globe.’ Read on…