Starting a Business? Most and Least Profitable Industries

Development and growth concept. Businessman plan growth and increase of positive indicators in his business.
Recent reports by Sageworks, a financial information company, revealed the industries that are most and least profitable over the studies of previous years. According to their research, businesses that are service based have low start-up costs, although they require specialized procedures of training and function services which fare well in today’s market. This includes law offices, real estate brokerages, and accounting/bookkeeping firms.

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

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. Oftentimes their goods may be considered commodities and to charge extra for a loaf 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.

Most Profitable Businesses

Tax Preparation, Accounting, Payroll Services and Bookkeeping

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

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. All one has to focus on is obtaining effective employees and build a reputable name for their business.

Legal Services

Similar to accounting, legal firms are a service-based industry that have seen a positive growth in sales of around 16.89 percent over the past years. They have small start-up costs that mostly include employees holding law degrees. Although an investment is required in special employee training and education, legal firms are able to generate a good amount of money.

Management of Enterprises and Companies

A 16.75 percent 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 of holding companies that are supposed to advise and further assist other companies in making essential and important management, operational, and financial decisions. Although the offices are niche and mostly offer services that are specialized with skilled employees, these kind of companies often bring in a considerable amount of profit.

Offices of Brokers and Real Estate Agents

The real estate industry has seen an increase of 16.6 percent over the past few years. Although the industry fluctuates and this can be hugely affected by changes in the market, it is wise to invest in this business when an increase in positive trends is noticed because real estate agents make good amounts of money when the business start-up is up and roaring.

Least Profitable Businesses

Gas and Oil Extraction

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

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, due to which beverage manufacturing is declining. Over the past year, more than a 1.49 percent drop in sales growth was noticed.


Whether it is 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 percent drop in sales growth was noticed.

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