Profitable & Unprofitable Businesses

Least Profitable Businesses - Complete Controller

Recent reports by Abrigo, a financial information company, revealed the most and least profitable industries over previous years’ studies. According to their research, service-based businesses have low start-up costs, although they require specialized training and function services that fare well in today’s market. This market includes law offices, real estate brokerages, and accounting/bookkeeping firms.

On the other side of the spectrum, businesses and retailers in the food industry struggle with sales, with farming and grocery stores seeing close to no growth.

Bierman, a business analyst, said, “Because of their volume-based business model and competitive markets, margins tend to be smaller. Grocery stores and manufacturing companies are good examples. Frequently, their goods may be considered commodities, and to charge extra for a loaf of bread may drive consumers to a different store over time.”

If you are starting a business or planning to do so, here are some of the most and least profitable businesses in recent years.

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Most Profitable Businesses

Tax Preparation, Accounting, Payroll Services, and Bookkeeping

Not sure which business to start? If you are good with numbers, an accounting firm will be the ideal option to invest in. Over the previous years, tax preparations, bookkeeping, payroll services, and accounting have seen a remarkable increase of 17.84% in sales growth.

They are likely to gain profits because their start-up costs are low, and all you have to pay for is your employees, technology, and training. Alongside, it is a service-based business. Therefore, no amount of money has to be spent on inventory. One must focus on obtaining effective employees and building a reputable name for their business.

Legal Services

Like accounting, legal firms are a service-based industry that has seen positive growth in sales of around 16.89% over the past years. They have small start-up costs that mainly include employees holding law degrees. Although investment is required in special employee training and education, legal firms can generate a lot of money.

Management of Enterprises and Companies

A 16.75% growth was noticed in this business realm. Therefore, it is a wise decision to invest in this industry. Typically, these businesses consist of privately owned banks or holding companies that are supposed to advise and further assist other companies in making essential management, operational, and financial decisions.

Although the offices are niche and mainly offer specialized services with skilled employees, these companies often profit considerably.

Offices of Brokers and Real Estate Agents

The real estate industry has increased 16.6% over the past few years. Although the industry fluctuates, which can be hugely affected by changes in the market, it is wise to invest in this business when positive trends are noticed because real estate agents make reasonable amounts of money when the business start-up is up and roaring.CorpNet. Start A New Business Now

Least Profitable Businesses

Gas and Oil Extraction

Gas prices were lower in 2017, similar to past years. Firms operating in the gas and oil industry have noticed a drop in sales of around 4.24%. With significant fluctuations in the market, competitors, and incredible barriers to entry, this may not be the best business to invest in.

Beverage Manufacturing

According to research, this is not the first time that beverage manufacturing has been on the list of the least profitable businesses to start. Although it covers both alcoholic and non-alcoholic drinks, the latest technology trends have introduced soda fountains and other types of drink dispensaries.

Alongside, people are becoming more health-conscious, so beverage manufacturing is declining. Over the past year, more than a 1.49% drop in sales growth was noticed.


Due to major competition or high costs of start-ups involving kitchen supplies, equipment, and overhead bakeries that are commercial, bakeries have been on the decline for a while now. According to research, a 0.81% drop in sales growth was noticed.

Download A Free Financial ToolkitConclusion 

In conclusion, Sageworks’ recent reports provide valuable insights into the profitability landscape of various industries. Service-based businesses like law offices, real estate brokerages, and accounting firms show robust performance with low start-up costs. Conversely, businesses in the food industry, especially gas and oil extraction, beverage manufacturing, and bakeries, face declining sales growth due to market fluctuations, competition, and changing consumer preferences.

For prospective 
entrepreneurs, choosing among the most profitable businesses, such as tax preparation, legal services, and management consulting, presents lucrative opportunities. However, when venturing into less profitable sectors, careful consideration is essential when considering market dynamics and potential barriers to success.

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