The 10 Most Profitable Small Business Ideas for 2023
When you think of businesses in the United States, the first ones that probably come to your mind are the big ones — Microsoft, Walmart, Apple.
Giants indeed, but small businesses actually dwarf them. The business landscape in the country is dominated by small businesses, according to the U.S Chamber of Commerce, which reports 33.2 million small businesses combine to make up 99.9% of all businesses in the nation.
Make Money With Google Bard and AI: How To Earn $3,000 a Month or More
Learn: How To Get Cash Back on Your Everyday Purchases
And the chamber says that in 2021, a record 5.4 million applications for new businesses were filed, with 5.1 million in 2022. If you want to start a small business, you aren’t alone.
If you’re considering starting a small business, here are 10 potentially profitable ones.
What To Consider Before Launching a Small Business
The U.S. Small Business Administration defines a small business as an independent entity that has fewer than 500 employees, but most have way fewer. In fact, among small businesses, 81.7% — or 27.1 million — are run by a single individual and have no employees. The other 18.3%, representing 6.1 million entities, have paid employees.
Anyone interested in launching a small business should consider the structure it’ll operate under — or how it will be legally organized. The most common business structures are:
Sole proprietorships
Partnerships
Corporations
Limited liability companies
Cooperatives
Choosing the proper structure is important, because a company’s organization affects various facets of a business, including daily operations, taxes, personal assets, legal protections and risk.
According to the SBA, small businesses without employees overwhelmingly — 85.3% — are organized as sole proprietorships. More than half of other small businesses — 52.4% — are classified as S-corporations.
See Also: 18 Legitimate Games & Apps That Pay Real Money in 2023
What Is the Success Rate of a Small Business?
An average of 67.7% of new businesses lasted at least two years from 1994 to 2020, per the Small Business Administration. In the same time span, 48.9% of businesses marked their fifth anniversary, while 33.7% hit the 10-year mark and 25.6% reached 15 years.
Which Small Businesses Make a Lot of Money?
A tremendous concern when coming up with a great small business idea is whether or not it will be profitable. Those seeking to start a small business should first consider what types of businesses tend to make a lot of money. Here are some potentially profitable business ideas.
Web Development
Web developers create, and then maintain, websites. Since a website is essential for small businesses today, anyone who has mastered those skills can open a business that caters to other entrepreneurs. The Bureau of Labor Statistics projects there will be 23% growth in the industry from 2021-2031.
Personal Training
Personal training is another great small business idea that requires few initial resources with a high potential for success. It requires some pieces of equipment — or maybe a gym membership with a guest pass — and considerable knowledge of personal health, fitness and nutrition.
Trainers will need to strive for client satisfaction and consistent results and must have solid personal branding and social media skills. Fitness trainers, who can expect 19% growth in the profession from 2021-2031, can record training packages in their home and sell online, on-demand videos to clients, too.
Cleaning Service
Starting a cleaning service is also a lucrative small business idea, as residences and businesses both require cleaning. This necessity means there will be a steady stream of clients and revenue. Additionally, a cleaning service is a great business to start from home and expands well over time.
Starting a Facebook page and asking customers to leave a review is a great way to spread the endeavor by word of mouth.
Freelance Copywriting
Becoming a freelance copywriter is another profitable business idea. All one needs is a strong writing portfolio, a good internet connection and some key knowledge in search engine optimization and best practices of content and social media platforms. As a small business with low overhead and a great degree of flexibility and creative freedom, freelance copywriter is an attractive option.
Real Estate
Real estate has a high potential for success, but it comes with a cost for those who decide they want to purchase bargain properties, rehab them and flip them for a big profit — or for those who buy property to rent for passive income.
Others who like the idea of working in real estate, without a big cash outlay, can take courses and pass an exam to become a licensed real estate agent.
Freelance Graphic Design
Similar to copywriters, freelance graphic designers can develop a highly successful small business based on their artistic abilities. Numerous businesses locally and online seek expert graphic designers to create logos, websites and other media that establish the look and feel of their business.
With an impressive enough portfolio, nearly anyone with skills in style and visual art can potentially create a successful small graphic design business. Network with other small business owners to get those first clients.
Tutoring
Tutoring is a profitable small business idea, as individuals and families seek assistance with continuing education, test prep and coursework help. With the wide availability of video conferencing platforms and screen-sharing programs, offering tutoring services has become a low-cost, easy-to-start business.
Proof of expertise within a subject is the first step toward becoming a tutor. According to job site Indeed, while a tutoring certification isn’t required, becoming certified can advance a tutor’s business prospects.
Landscaping
Homeowners and businesses want their outdoor spaces to look as presentable as their indoor ones but may not have the expertise or equipment. That’s why landscaping is another great small business one can easily start.
All that’s required is an investment in proper equipment — which you might already own — along with basic knowledge and experience in gardening and horticulture and some online marketing to establish the business’ presence.
Child Care
In the U.S., 28% of mothers stay at home with the kids, while 7% of fathers do, according to the National Fatherhood Initiative, citing statistics from Dad Well Done. That leaves a lot of room for child care, and the Bureau of Labor Statistics reports the field will grow by 6% from 2021 to 2031.
For stay-at-home parents who want to care for other children in their home, they will need to check with their state’s child and family services department about the requirements. In New York, for example, a child care business that regularly cares for three or more children for more than three hours a day requires a license. If you just watch your next-door neighbor’s new baby, you probably won’t face any regulations.
Illumine, a child care app, reports that the average annual cost of care across the U.S. is $14,760.
App Development
Becoming an app developer requires a low initial investment and a few resources to start up, meaning nearly anyone with a solid idea for a mobile app and experience in coding can potentially succeed. The app industry is also highly profitable, with consumers spending more than $167 billion spent on apps in 2022 alone, TechCrunch reports.
What Makes a Small Business Successful?
Even a good idea for a small business requires knowledge of how to operate effectively, especially if new business owners want to succeed in a competitive industry. Here are some key concepts on how to ensure a small business becomes successful.
Seek a Specialty
A successful business brings something original to the marketplace, even if its products or services are similar to those in its area and industry. It can accomplish this by offering specialized products or services that no, or few, other competitors provide.
Consistently Network
Neither individuals nor businesses thrive in isolation. Connecting to other professionals in the same industries, whether in person or online, ensures business owners are always in the loop about new developments. It also gives them the chance to build long-lasting relationships that could prove mutually beneficial in the future.
Achieve With Digital Marketing
For most small businesses, forming and expanding their online presence is a necessity. It’s also among the best and most affordable ways to generate leads and increase revenue. Using the tools of social media, email marketing and search engine optimization to their fullest will pay dividends for any small business in the future.
Adopt Systems That Work for Large Businesses
Just because a large business operates on a wider scale doesn’t mean a small business can’t benefit from using similar systems, like toll-free numbers, interactive voice response and website automation. Adopting these practices will surely lead to good outcomes for any small business.
Path to Success
There are no guarantees in predicting what businesses will succeed or fail, but the U.S. Chamber of Commerce offers some insight into why businesses fail. To be successful, business owners need to avoid these pitfalls:
Poor marketing initiatives
Lack of strong managerial skills
Ineffective business planning
Financing challenges
Takeaway
Anyone looking to launch a small business has several options to consider. The most profitable business ideas tend to stem from a passionate, skilled individual or group of individuals working together in the same field with a strong business plan.
More From GOBankingRates
5 Cities Becoming Popular With Baby Boomers: Are They Right for Your Retirement Years?
The 4 Types of Bank Accounts All Small Businesses Should Have
Jami Farkas contributed to the reporting for this article.
This article originally appeared on GOBankingRates.com: The 10 Most Profitable Small Business Ideas for 2023
