In this article, we will list the 30 Most Profitable Businesses You Could Start in 2023. If you want to skip our detailed explainer on how to start a business, visit the 10Most Profitable Businesses You Could Start in 2023.
Although most experts predicted a recession at the end of 2022, the US economy continued to weather the storm. The economy showed continued growth. Inflation and interest rate hikes did make things difficult for Americans, but we may have avoided a recession. The inflation is also gradually losing momentum, and supply chain bottlenecks are being resolved. So, it is a good time to start your own business. With that backdrop, we have compiled a list of the 30Most Profitable Businesses You Could Start in 2023.
How to create and market your brand?
The success of your business depends on the brand you create. Building and sustaining a brand has never been easier than it is today. Meta Platforms, Inc. (NASDAQ: META)’s Facebook is highly adept at showing your brand to the relevant audience. With some digital marketing skills that you can learn within weeks online, you can place your ads on Meta Platforms, Inc. (NASDAQ: META)’s Facebook and Instagram and show them to the right audience. Meta Platforms, Inc. (NASDAQ: META)’s algorithm optimizes your ads according to the people who interact with them and presents them to similar people. Reels, a relatively new feature on Instagram, will help your brand reach thousands of people. As evident from the following comment by Baron Fifth Avenue Growth Fund in the second quarter of 2023, more and more people are adopting Instagram reels:
"Meta reported continued growth in Instagram Reels adoption and other new advertising products. In addition, the company’s advancements in AI continue contributing to its targeting and measurement capabilities, while GenAI innovation presents an opportunity for new products and incremental monetization."
An essential component of your brand is its creative assets. If you want to take the professional route, tools like Adobe Inc. (NASDAQ:ADBE) Illustrator, and Photoshop can do those for you. These are industry-standard tools that are easy to learn, but a little challenging to master. However, with the plethora of tutorials online, pulling off good-looking creative assets using Adobe Inc. (NASDAQ:ADBE)'s Illustrator and Photoshop is not an issue. Still, if that feels like alot of work, Adobe Inc. (NASDAQ:ADBE) Firefly’s generative AI will create your creatives over simple prompts. If everything else fails, you have freelancing sites like Upwork Inc. (NASDAQ: UPWK) to outsource your work. Upwork Inc. (NASDAQ: UPWK) is a great place to find freelance human resources for your business. All you need to do is post a job and set a budget. Upwork Inc.'s (NASDAQ: UPWK) platform will show your job to related freelancers, who then submit proposals for you to choose from.
How do you make your digital storefront?
With content management systems such as WordPress, you do not need to learn coding or web designing. Many people post free WordPress tutorials on YouTube, that will teach you how to host, design, create, and manage a website for your business. WordPress offers drag-and-drop features and third-party plugins to customize your website. If you are opening an online retail store, then Shopify Inc. (NYSE: SHOP)'s e-commerce platform will make it a breeze for you.
It lets you create your own e-commerce store with a few clicks. With services like Shopify Inc. (NYSE: SHOP), you do not need to worry about backend processing and databases. Shopify Inc. (NYSE: SHOP) also lets you build a customer database for marketing. Alternatively, you can open your e-commerce store on Amazon.com, Inc. (NASDAQ:AMZN)'s marketplace, which lets you create your own store. With a store on Amazon.com, Inc. (NASDAQ:AMZN) marketplace, you can easily attract traffic since it already has significant engagement and traffic. For a comprehensive list of the most trending products on Amazon.com, Inc. (NASDAQ:AMZN)'s e-commerce platform, visit 20 Most Searched Products on Amazon.
How to get clients for service-based business?
Finally, if you run a service business you would want clients. The freelance sites you used for outsourcing, can also be used for attracting new clients. However, there is also an abundance of localized services marketplaces. One of these is Bark. It lets people post jobs and hire local services. As a business owner, you pay Bark for leads and get access to potential clients. After getting leads from Bark, all that's left to do is to cold call or email your potential customers.
These business activities, such as setting up a company profile, marketing, making creatives, hunting clients, and reaching out to them cost only a fraction of what they used to a decade ago. So starting your own profitable business has never been easier. If you are wondering which industry you should get into, check out the list of 15 Most Profitable Industries In America In 2023.
30 Most Profitable Businesses You Could Start in 2023
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Methodology
We used a combination of sources such as New York University’s Stern School’s Margin By Sector report, CSI Market, and Step by Step Business, among others, to determine the average net margin for industries and sectors. We picked out industries with the highest net margins and compiled a list of businesses in each industry. Then, we ranked the businesses based on their individual average net margins as reported by reputable sources.
30 - Food Truck
Average net margin - 9%
If you have always wanted to dip your toes in the restaurant business but are short on budget, see if you can open a food truck. Its margins are higher than a fine dining restaurant and costs less to set up. It costs roughly $10,000-$120,000 to set up a food truck. Do remember that with food trucks, the concept is everything, so work hard on that.
29 - Property Management
Average net margin - 10%
Setting up a property management company will require working relationships with several vendors. However, if you can get good clients, the 10% net margin makes it an attractive business.
28 - Funeral Homes
Average net margin - 10%
The cost of starting a funeral home ranges from $150,000 to $300,000, which includes downpayment on building preparation of the space, equipment, and hearse. However, it is a business that will never go out of demand.
27 - Home-Building
Average net margin - 14%
Starting a home-building business requires at least a $50,000 investment. In addition, you would need to establish contacts with subcontractors and obtain licenses and permits. However, with a 14% profit margin and steady revenues, the investment of time and money is worth it.
26 - Information Systems and SAAS Companies
Average net margin - 15%
One of the most rewarding things you could do is to open up a software company. You do not need any coding knowledge, but you do need to familiarize yourself with the industry and its trends so you can hire the right talent. The average net margin for this business is 15% because of large blue-chip companies. Your net margin can go up 60% or even higher, which is why it is one of the most profitable businesses.
25 - Dropshipping
Average net margin - 15%
The dropshipping business model has always existed but it has been in the limelight after people started using Shopify to drop-ship products. The best thing about dropshipping is that you do not have to store the inventory. You put someone else’s products on your website at a higher price and collect the difference. Margins for dropshipping can be as high as 60%. This is one of the best businesses to start with little money as you can start with $1000.
24 - Graphic Design Services
Average net margin - 15%
If you are a graphic designer, you can offer your services on freelance websites. Alternatively, you can open up your graphic design agency and offer services to other businesses.
23 - Travel Agency
Average net margin - 15%
Travel agencies have always been one of the most profitable businesses. For this one, you need to connect with hotels and airlines and create lucrative packages that you can market on social media.
22 - Investment & Asset Management
Average net margin - 16%
Starting an Investment and Asset management company requires registration with the securities and exchange board of your country. If done correctly, this can be a very lucrative business.
21 - Computer Peripherals
Average net margin - 17%
Computer peripherals such as keyboard and mouse will always be in demand. Given the rise of PC gaming and work-from-home culture, more and more people are looking for computer peripherals. You can source your products from China after a proper quality check and sell them through a Shopify website. You can also dropship PC peripherals.
20 - Legal Services Business
Average net margin - 17%
If you are a lawyer, you can open up a legal services business. Hire a team of lawyers and specialize in a particular area.
19 - Renewable Energy
Average net margin - 18%
Renewable energy business is one of the most profitable businesses and its demand is ever growing. You can source panels and renewable energy generators from manufacturers and create your brand.
18 - Social Media Management
Average net margin - 18%
As a social media management agency, your company will look after your client's social media accounts, create ads, bring in engagement, and run paid ads. You might require a graphic designer, social media copywriter, and digital marketing expert.
17 - IT Support, Technology Consulting, and Repair
Average net margin - 18%
As an IT support company, you will provide technical support to other businesses and fix problems with their technology. This is also one of the easiest businesses to start as you can get started with less than $10,000.
16 - Delivery Services
Average net margin - 19%
Starting a delivery services company would require hiring delivery boys and vehicles. It can be an extensive business so we recommend starting with one city and then moving up from there. You can also specialize based on the type of items you deliver.
15 - Gaming Software
Average net margin - 21%
Building a gaming software company requires hiring game developers among others that your business will need. You can also hire someone who works on game concepts and outsource the coding. This business can be capital and expertise-intensive, so we recommend starting with easier platforms and simpler games.
14 - Bookkeeping and accounting
Average net margin - 26%
If you have an accounting background, starting a bookkeeping and accounting business can be very lucrative. Hire a bookkeeper, finalize a bookkeeping software, and market your services to your potential clients.
13 - Stock Brokers
Average net margin - 26%
You can expect to spend anywhere between $50,000 to $100,000 to start a brokerage. However, if you have a successful trading background and portfolio to show, you can easily turn your investment into profit through a 26% net margin.
12 - Tax Preparation
Average net margin - 26%
Starting a tax preparation company requires knowledge about tax filing and laws. The business can easily generate a 26% profit on revenue.
11 - Cake Business
Average net margin - 30%
If you aspire to run your own bakery one day, you can get started with a cake business. If you know baking and are good with cakes, a 30% net margin is attractive, given that you can run the business from your home. You would need to set up your website and social media pages, receive orders online, and fulfill them using a delivery service.
