What Are the Most Successful Small Businesses?

Curious what the most profitable businesses are, or what’s the best small business to start? We’ve got you covered. Follow along as we explain the most profitable businesses and explore the best small business to start in 2020.


What Makes a Small Business Successful?

How do you measure whether a small business is successful or not? Success is arguably one of the most subjective words in the English language. In general, though, measuring small business success starts with how much profit a small business generates. The most profitable businesses are deemed to be the most successful.

Starting a small business has its rewards besides money. Starting a small business removes the glass ceiling on how much income an employee can make. A business can make an unlimited amount of income, so there’s no cap on how much money you can make with a small business.

Here are some other measures of success:

  • Being the person in charge
  • Flexibility with your work schedule
  • Do something you’re passionate about
  • Create a business legacy that can be transferred to others
  • Creating value for society in a far bigger way than working for someone else

The 11 Most Profitable Small Businesses

Accounting Firm

Accounting firms track income, expenses, taxes, and other financial-related information for businesses and individuals. Accounting services are constantly in demand. Professional accountants determine the financial health of businesses, implement tax mitigation strategies, and provide other financial benefits for clients. They also file personal tax returns, providing many of the same services for individuals.

Learn how to start your own accounting business and determine if it is the right fit for you.

What it takes to start an accounting firm:

  • Form a business. We recommend forming a limited liability company or LLC. 
  • Register for taxes and obtain an Employer Identification Number (EIN) 
  • Open a business bank account. 
  • Set up accounting. 
  • Obtain necessary permits and licenses. 
  • Purchase business insurance. 
  • Define your brand. 
  • Establish a web presence.

Educational Requirements:

To start an accounting firm, you’ll need at least a Bachelor’s Degree in accounting, finance, economics, or a related field. 

After graduating, it will be up to you to decide your accounting career path. While most graduates go on to become a Certified Public Accountant (CPA), there are other options available.

Other accounting specializations include:

  • Certified Financial Analyst (CFA)
  • Certified Management Accountant (CMA)
  • Enrolled Agent (EA)
  • Certified Financial Services Auditor (CFSA)
  • Certified Internal Auditor (CIA)
  • Certified Fraud Examiner (CFE)
  • Chartered Global Management Accountant

You must pass a certification exam for each specialization.

Earning Potential for Accounting Firms:

CPAs in the US make an average salary of $70,500 per year. This will depend on the size of the firm, how many accountants are working there, and the demand for accounting services in that area.

Healthcare

The healthcare industry is always in high demand for qualified healthcare professionals. In the healthcare industry, there are so many career paths one can follow. Generally, income follows education, meaning doctors tend to earn more than nurses, and nurses make more than nursing assistants. 

Medical Practice

Doctors are responsible for the overall healthcare of the patients under their supervision. They assess a patient’s wellbeing, determine what health problems exist, devise a recovery plan, and prescribe medicines to make the patient well again. For one person, this is a lot of responsibility and the reason doctors can command such a high salary or charge the high prices they do when in private practice. 

Private practices are some of the most profitable businesses to start, not to mention some of the best small businesses that make up a community.

What it takes to start a private medical practice:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a pro forma (similar to a business plan) and obtain bank financing.
  • Rent space and purchase all necessary medical equipment, insurances, and licenses.
  • Hire and train staff.
  • Open your doors for business.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To be a doctor, you’ll need to attend four years of college, four years of medical school, and complete between three and seven years of residency training to qualify for medical licensing.

Earning Potential for Medical Practices:

The average US salary for a doctor with a private medical practice is $311,000 per year.

Private Nurse Business

Nurses are responsible for the healthcare and wellbeing of the patients they serve. They help assess a patient's health and wellbeing, distribute prescribed medicines, administer treatments, and more. 

Registered nurses can start their own businesses, such as working as a private nurse, hospice nurse, or as a legal consultant. 

What it takes to start a private nurse business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location. Many entrepreneurial nurses work out of their homes.
  • Begin practicing and seeing patients in their homes.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To be a registered nurse, you’ll need to attend four years of college, pursuing a Bachelor of Science in Nursing (BSN), and then apply for state licensing.

Earning Potential for Private Nurse Businesses:

The average US income for a private nurse is $65,870 per year.

Outpatient Care Business

Outpatient care professionals are responsible for administering specialized care services to the patients they serve. They help administer MRIs and lab tests, provide counseling and preventative disease information, and more. Outpatient care professionals can start their own businesses, such as safely setting up home health care environments. 

What it takes to start a private outpatient care business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN
  • Open a business bank account.
  • Create a business plan and get financing.
  • Decide on a location. Many entrepreneurial outpatient care providers work out of their homes and in the homes of the people they serve.
  • Begin charging for your specialization and seeing patients in their homes.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To be an outpatient care professional, you’ll need to attend four years of college (typically in a health sciences-related field) and then apply for state licensing.

Earning Potential for Outpatient Care Businesses:

The average US income for an outpatient care professional is $54,391 per year.

Physical Training Business

Physical trainers are alternative health care providers responsible for helping their clients reach their health and wellness goals. They typically work out of gyms, where they assist clients with workout routines and safe practices for building strength and flexibility. 

A physical trainer can start their own business, such as providing one-on-one health coaching services for senior citizens. 

What it takes to start a physical training business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan and get financing.
  • Decide a location to work from. Many physical trainers providers work out of people’s homes as well as gyms.
  • Begin charging for your services, seeing clients at gyms or their home
  • Build your brand through proper marketing initiatives and great customer service

Educational Requirements:

To be a physical trainer, you’ll need to attend four years of college and then apply for state licensing.

Earning Potential for Physical Training Businesses:

The average income range for a physical training business in the US is between $31,000 and $81,000 per year.

Real Estate

Real estate investors have many options for generating profits. Buying properties, improving them, and reselling for a huge profit return is just one option. Purchasing rental properties is another avenue a real estate investor might take for generating ongoing passive income. 

The most profitable real estate investment companies start small and grow exponentially by reinvesting their profits back into the business.

What it takes to start a real estate investment business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide a location to work out of. Many real estate investors work out of a home office.
  • Begin researching and purchasing properties and reselling them for a profit or renting them for passive income
  • Build your brand through proper marketing initiatives and great customer service

Educational Requirements:

You do not need a formal education to be a real estate investor. However, it does help to have some previous real estate experience or business training.

Earning Potential for Real Estate Investment Businesses:

The average income for a real estate investment business in the US ranges between $70,000 and $120,000 per year.

Legal Services

Lawyers represent organizations, government agencies, corporations, and individuals in a court of law. The business of providing legal services is centered on examining legal challenges and providing sound legal advice to ensure justice and fairness are met. Law firms are not only some of the best small businesses you can start, they’re also some of the most profitable businesses in a community.

What it takes to start a law firm:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Choose a location to work from. Many lawyers work out of rented office space near courthouses.
  • Begin working for clients and helping them with their legal problems.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To be a lawyer, you’ll need a four year college degree and a three-year Juris Doctorate (JD) degree from a university accredited by the American Bar Association.

Earning Potential for a Law Firm:

The average US lawyer generates $65,000 to $120,000 in income per year.

Dental Care

Dental offices are a necessary business for all communities. They provide routine and non-routine preventative and corrective dental care procedures. Some of these procedures include fillings, caps, crowns, and correcting existing dental problems. These services help ensure the health and wellbeing of citizens residing in that community.

What it takes to start a dental office:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan and get financing.
  • Decide on a location. Dentists need specialized equipment, so you must carefully plan the proper space.
  • Begin charging for your services and seeing clients in your dental clinic.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To be a dentist, you’ll need to attend four years of dental school, become a Doctor of Dentistry (DDS), and obtain a license to practice dentistry.

Earning Potential for Dental Offices:

The average US income for a dentist is about $159,064 per year.

Warehouse and Storage

A self-storage business provides a place for people to store their personal belongings. These businesses also cater to other businesses that need storage space for business-related items and furnishings.

The driving force behind self-storage businesses is the desire to forget about items cluttering up living and workspaces without completely discarding them.

What it takes to start a self-storage business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location. The proper location must be planned in advance, as there are zoning laws for where you can set up a self-storage business.
  • Begin renting storage units and collecting payment.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

You don’t need a formal education to open a self-storage business. However, some experience in business could be useful.

Earning Potential for Self-Storage Businesses:

The average US income for a self-storage business is between $361,000 and $798,800 per year.

Cleaning Services

A cleaning services business provides a solution for individual households and businesses, ensuring they remain clean and sanitized. The driving force behind cleaning businesses is the desire to maintain a clean living area and workspace.

What it takes to start a cleaning business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location. Many cleaning services began out of someone’s home. As the business grows, you may find it necessary to hire employees and rent a proper business space.
  • Begin cleaning houses and offices and collecting payment.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

You don’t need a formal education to open a cleaning business, though some experience in business is useful. 

Earning Potential for Cleaning Businesses:

The average cleaning business owner in the US makes between $26,000 and $69,000 per year.

Funeral Homes

A funeral home provides a solution for families of a deceased person, ensuring family members stay comforted and that the body of the deceased person is properly taken care. Funeral homes are a necessary business in developed communities, as death is a constant, and proper disposal of bodies requires a mortician.

What it takes to start a funeral home business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location. Many funeral homes require refrigeration and other specialized equipment.
  • Begin performing mortician and cremation services and collecting payment.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To open a funeral home business, you’ll need either an associate’s degree or bachelor’s degree in mortuary science, as well as two to three years in an apprenticeship. You must also be state-licensed. 

Earning Potential for Funeral Home Businesses:

The average income for a funeral home business in the US is $92,000 per year.

Personal Training Business

Personal trainers work with individuals to help them manage their health and fitness goals. Personal trainers help provide multiple services to help people improve their health. This can involve creating personal workouts and diets routines as well as helping to establish specific goals for their clients.

What it takes to start a personal training business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location. Many personal trainers work out of the gym or the client’s home. 
  • Begin customizing fitness plans and charging for your services.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To open a personal training business, you’ll need an undergraduate degree in kinesiology or exercise science, along with national certification from the American College of Sports Medicine.

Earning Potential for Personal Training Businesses:

The average hourly wage for a fitness instructor in the US is $18 per hour.

Schools and Instruction

Schools and educational institutions like charter schools work with students to help them learn academic subjects and life skills like behavior management and interpersonal skills. Educators develop lesson plans, utilize instructional design frameworks to teach lessons, and act as sources of help and support for students.

What it takes to start an education business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan, and get financing.
  • Decide on a location.
  • Begin customizing lesson plans for your students and recruiting students to teach.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To open an education business you need a four-year undergraduate degree in teaching, along with state teacher certification.

Earning Potential for Education Businesses:

The average income for a teacher in the US is $62,500 per year.

Childcare

Opening a daycare is a great option for individuals who love to nurture and influence children. For entrepreneurs interested in opening a business with stable demand and regular customers, a daycare is a great choice. Daycares free up parents’ time, so they can work or attend school. This alone creates steady business.

What it takes to start a childcare business:

  • Form your business. We recommend forming an LLC to protect your personal assets.
  • Register for taxes on the IRS website and get a free EIN.
  • Open a business bank account.
  • Create a business plan and get financing.
  • Decide on a location.
  • Begin working with children and collecting payment from parents and guardians.
  • Build your brand through proper marketing initiatives and great customer service.

Educational Requirements:

To open a daycare you do not need higher education; however, having an associate’s degree in child development can help you better succeed in this industry.

Earning Potential for Childcare Businesses:

The number of children being cared for determines the income for daycares. On average, the hourly rate for childcare in the US is $6 to $10 per child.

The 5 Least Profitable Small Businesses

Oil and Gas Extraction

Oil and gas extraction is heavily regulated and requires a lot of upfront investment, making it a long term investment. Since the world is transitioning away from non-renewable energy, it is probably best to stick to alternative energy businesses, like solar, hydroelectric, or wind power.

Mining

Mining is a risky business because it is costly, can be dangerous (making it expensive to insure), and most mines are located in remote locations away from civilization. It costs lots of money to enter into this industry without guaranteed profits.

Beverage Manufacturing

The beverage industry has a lot of competition, making it a high risk for new entrants. Regulations have increased over the past few years, making this business much less profitable and more costly.

Grocery Wholesale

Grocery wholesalers are intermediaries that primarily get food from producers to grocery stores. This industry is influenced heavily by the transportation industry. Today, consumers and grocery store chains are sourcing their own products directly from producers, erasing most of the need for grocery wholesalers.

Garden and Lawn Supplies

The garden and lawn supplies industry is oversaturated and dominated by big box retailers like Lowes, HomeDepot, and Walmart. Garden and lawn supplies are a seasonal business at best, and the profit margins aren’t favorable for most business minded individuals.

How to Start Your Own Successful Small Business

For the right person, starting a small business is extremely rewarding. Small businesses support local economies and provide jobs to the citizens living in those locations.

How to start a small business:

  1. Choose an Idea
  2. Plan Your Business
  3. Form a Company
  4. Register for Taxes
  5. Get Business Banking Accounts
  6. Set up Accounting
  7. Obtain Permits & Licenses
  8. Get Insured
  9. Define Your Brand
  10. Establish a Web Presence

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