Which Industries Are The Most Profitable?

Posted in Industry

With the news that small businesses have been primarily responsible for the upswing in U.S. hiring, entrepreneurs hopeful in starting their business in 2012 can be encouraged by the thaw on economic freeze. Seeing this as an opportunity to take the plunge, here’s a look at some of the businesses with the highest profit margins. As covered in a recent article, the results are provided by Sageworks, a financial information company that took the financial statements of privately held companies and analyzed which were the most profitable.

Dentists: With a pre-tax profit margin of 13.84%, dentistry proves that the health industry is one of the most profitable businesses today.

Credit Intermediation: Thanks in part to the economy, more individuals and companies than ever before are having their lives impacted by debt, resulting in real estate foreclosures and bankruptcies. These companies have a pre-tax profit margin ranges from 13.63% to 10.12%.

Technical and Trade Schools: With so many industries falling by the wayside, those left unemployed are looking to learn new skills to re-enter a changing job market. The pre-tax profit margin averages 12.76% for these institutions.

Accounting: More specifically, tax preparation and bookkeeping has shown to have a pre-tax profit margin that averages 13.61%. With a federal tax code that includes 2.5 million pages in regulations, it’s easy to see why so many people would have professionals do their taxes.

Insurance Agencies: Every home or car owner needs insurance, that’s why the pre-tax profit margin averages 11.26% even during bleak economic times.

Science Research & Development Services: In order to compete globally, U.S. companies are constantly in search for the newer, better, faster of their products, drugs, and methods. That’s why this sector shows a 9.44% pretax profit margin average.

Lawyers: Love ‘em or hate ‘em (or love to hate ‘em), lawyers have a pre-tax margin average of 12.98%. Like the healthcare industry, some things are always in demand, like legal services.

Outpatient Care Centers: With many insurers stressing the use of lower costing non-hospitals for many procedures, the pre-tax profit margin averages 10.50%.

Cemeteries and Funeral Homes: The aging population has an impact on this industry as well as healthcare, resulting in a pre-tax profit margin average of 9.59%.

Doctors: The medical industry as a whole continues to thrive, and doctors are no exception: they have a pre-tax profit margin of 10.84%. Despite insurers and the government trying to cut reimbursements, the industry’s attempt at consolidation and technology have helped keep healthy profits.

Software Publishers: Not to be limited computers, software is written for video games, tablets and smartphone apps too. This is why there’s been a boom in this industry, with a resulting 9.30% pre-tax profit margin.

As seen from the list above, the most successful industries tend to be service-oriented, whether in healthcare, legal, or insurance. While not all of us have the necessary degrees to dive into such a market, it’s always helpful to think on a broader scale of what these services need to thrive. From supplies to staff, behind every successful industry is a small business.

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