SMALL BUSINESS IDEAS


Data on 61 Small Business Industries

 

Choosing the right industry for a small business is both a challenge and an opportunity brimming with potential. Entrepreneurs face the daunting task of navigating through a complex landscape of market demands, competitive pressures, and economic fluctuations. This decision requires not just an understanding of the current market but also an anticipation of future trends and growth areas. However, within this challenge lies immense potential. Selecting the right industry can unlock unparalleled opportunities for innovation, profitability, and long-term success. It involves a strategic evaluation of key metrics such as sales per company, growth rates, profit margins, and operational efficiencies. By carefully analyzing these indicators, aspiring business owners can identify sectors that not only align with their passions and strengths but also offer a viable path to achieving their entrepreneurial dreams.
best small business ideas

What are important financial metrics to evaluate small business ideas?


When evaluating small business ideas, several key metrics play crucial roles in determining the potential success and viability of a venture. These metrics not only provide insights into the current health of a business but also offer foresight into its future growth and profitability. We narrowed the below list to 61 small business industries that have an average revenue per company of $2 million and less. Understanding these metrics is essential for entrepreneurs and investors alike to make informed decisions. Here is a breakdown of the critical metrics included in the evaluation of small business ideas:

  1. Sales per Company: This metric indicates the average revenue generated per business within a specific industry. High sales per company suggest a strong market demand and the potential for significant revenue generation. It is a direct indicator of market acceptance and the scalability of the business model.
  2. 5-Year Growth: This percentage reflects the growth rate of businesses within an industry over a five-year period. It’s a crucial metric for understanding the long-term sustainability and expansion potential of the sector. Industries with higher growth rates are often more attractive to entrepreneurs and investors looking for opportunities with upward trends.
  3. Profit Margin: The profit margin reveals the percentage of sales that has turned into profits, highlighting the financial health and efficiency of businesses in an industry. A high profit margin indicates that a business can effectively convert sales into actual profits, offering room for reinvestment and growth.
  4. Sales per Employee (Rev/Emp): This metric measures the average revenue generated by each employee, providing insight into the operational efficiency and productivity of a business. Industries with high revenue per employee are typically more efficient and potentially offer better scalability without a proportional increase in workforce.
  5. Pay per Employee (Pay/Emp): Reflecting the average compensation provided to employees, this metric helps assess the labor cost relative to revenue generated. Industries with a balanced pay per employee ratio are more likely to sustain employee satisfaction while maintaining profitability.
  6. Franchise Presence: The percentage of businesses within an industry that operate as franchises offers insights into the franchisability and replicability of the business model. A higher franchise presence can indicate a successful, scalable business model that can be replicated across different locations.
  7. % of Businesses with less than 10 Employees: The percentage of businesses within an industry that have less than 10 employees highlights the lack of concentration in an industry. A higher percentage can indicate a fragmented industry, which is usually easier to compete in.

The financial metrics on 61 small business industries


Below are the financial metrics to help evaluate 61 small business industries. Each column is sortable. Just click on the column header and click on the visible down arrow to sort the list. You can click on the small business industries to see more data and a detailed report on the industry.

Business Industry Avg. Sales per Co. (000s) 5-yr Annual Growth Avg. Profit Margin Sales per Emp (000s) Pay per Emp (000s) Ind. Sales from Franchises Businesses w/ <10 Employees
Food Trucks and Street Vendors $577 13.2% 10.9% $173 $25 0% 89%
Recreational Clubs, Ranges, Courts, Camps & Other $1,142 10.9% 11.4% $143 $26 7.5% 73%
Building Inspection Services $724 10.8% 9.1% $227 $62 0% 92%
Alternative Medicine and Other Health Practitioners $1,113 10.4% 8.4% $228 $51 0% 89%
Recreational Goods Rental $1,045 9.8% 8.1% $207 $38 10.0% 78%
Bookkeeping and Billing Services $783 9.5% 17.0% $120 $55 2.3% 88%
Nail Salons $462 9.5% 12.1% $112 $21 1.8% 89%
Hostels and Guest Houses $1,092 9.5% 12.2% $166 $35 3.9% 82%
Graphic Design $878 9.5% 10.7% $226 $73 0% 91%
Bed-and-Breakfast Inns $733 9.3% 12.9% $106 $24 1.5% 83%
Marinas $2,008 9.3% 11.4% $223 $47 1.6% 74%
RV Parks and Campgrounds $1,304 8.9% 12.6% $177 $42 18.0% 85%
Extermination and Pest Control $1,744 8.9% 10.7% $184 $52 20.0% 81%
Self-Storage $1,971 8.7% 21.2% $400 $34 4.4% 96%
Paralegal, Patent, Processing and Notary Services $1,955 8.7% 20.3% $314 $68 .4% 88%
Carpet Cleaning $799 8.5% 11.1% $125 $37 37.0% 87%
Car Washes $1,130 8.4% 8.5% $86 $22 2.8% 67%
Family Fun Centers $1,449 8.3% 11.4% $69 $21 7.3% 50%
Septic Tanks and Portable Toilets $1,742 8.2% 8.4% $229 $55 1.8% 81%
Buildings and Facilities Cleaning $865 8.2% 10.8% $167 $43 6.8% 84%
Hunting, Outdoor, and Adventure Camps $1,907 8.1% 12.9% $178 $45 1.4% 69%
Automobile Towing $1,192 8.0% 5.2% $165 $42 1.1% 76%
Child Day Care $1,143 8.0% 10.3% $65 $24 8.2% 53%
Landscaping Services $1,044 7.6% 10.5% $158 $40 1.4% 80%
Tax Preparation Services $839 7.4% 16.6% $65 $14 31.6% 85%
Pet Grooming and Boarding $513 7.3% 12.2% $85 $24 6.7% 79%
Real Estate Appraisal $976 7.3% 18.4% $319 $64 2.4% 96%
Landscape Design $1,111 7.2% 9.3% $223 $65 0% 83%
Driving Schools $615 6.6% 15.0% $82 $25 4.0% 81%
Tanning Salons, Day Spas, and Other Personal Care $582 6.5% 12.4% $76 $21 36.5% 78%
Exam Preparation and Tutoring $1,059 6.4% 15.1% $70 $22 25.2% 61%
Sports Coaching and Camps $893 6.4% 15.4% $112 $21 7.5% 71%
Fine Arts Schools $530 6.3% 14.6% $74 $20 7.9% 73%
Health and Safety Training and Certification $853 6.1% 14.8% $101 $37 12.0% 78%
Cemeteries and Crematories $1,661 5.9% 12.2% $167 $48 .2% 85%
Bars and Nightclubs $749 5.9% 10.9% $63 $18 0% 70%
Janitorial Services $1,262 5.8% 10.5% $63 $25 12.3% 71%
Private Mail Centers $884 5.8% 9.4% $158 $30 72.6% 90%
Specialized Design Services $1,210 5.7% 10.8% $305 $72 0% 91%
Taxi and Limousine Service $56 5.4% 5.3% $52 $19 2.6% 77%
Locksmiths $738 5.4% 10.9% $162 $48 5.0% 89%
Funeral Homes and Funeral Services $1,791 4.5% 12.4% $169 $43 .6% 74%
Barber Shops $314 4.5% 12.4% $71 $24 30.1% 89%
Laundromats $658 3.8% 12.1% $142 $22 .7% 93%
Gyms and Fitness Centers $1,318 3.7% 10.9% $55 $17 18.2% 59%
Document Preparation Services $1,369 3.7% 9.3% $76 $36 1.2% 84%
Consumer Electronics Repair and Maintenance $1,036 3.3% 9.9% $133 $45 4.0% 89%
Appliance Repair $944 3.0% 9.9% $219 $45 6.7% 91%
Garden Equipment Repair $432 2.8% 10.3% $140 $34 1.5% 96%
Formal Wear and Costume Rental $1,477 2.6% 7.7% $103 $32 11.1% 79%
Computer and Office Machine Repair and Maintenance $1,064 2.4% 9.9% $136 $58 1.6% 89%
Property Maintenance Services $902 2.0% 10.7% $84 $34 7.7% 78%
Party and Furniture Rental $1,565 2.0% 7.9% $131 $44 11.5% 67%
Sightseeing Transportation $1,671 1.6% 5.0% $161 $42 5.7% 72%
Furniture Repair and Restoration $615 1.6% 10.2% $152 $39 5.7% 93%
Caterers $1,092 1.4% 11.3% $77 $23 0% 60%
Beauty Salons $352 .9% 12.5% $52 $26 29.1% 82%
Commercial Photography $630 .5% 13.2% $291 $88 1.7% 93%
Repossession Services $1,619 .4% 9.5% $177 $40 .9% 68%
Portrait Photography Studios $481 -0.9% 13.6% $91 $28 1.8% 93%
Drycleaning and Laundry Services $461 -1.6% 12.6% $58 $25 7.5% 79%

 

Sector Overview of the Best Small Business Industries


In the journey of identifying the best business ideas for aspiring entrepreneurs, a comprehensive analysis across various sectors provides invaluable insights. This overview encapsulates the dynamics within the Transportation, Rental & Real Estate, Professional Services, Basic Services, Education, Care, Arts & Recreation, Leisure & Food, and Personal Services sectors. Each of these sectors exhibits unique trends in growth, profitability, operational efficiency, and market size, as evidenced by specific industry metrics such as Sales per Company, 5-Year Growth, Profit Margins, Revenue per Employee, and more. Here’s a brief look into each sector:

Transportation
The Transportation sector, encompassing Automobile Towing, Taxi and Limousine Service, and Sightseeing Transportation, shows varied growth rates and profitability. With a significant percentage of businesses having fewer than 10 employees, this sector offers opportunities for small-scale operations with potential for growth, particularly in sightseeing transportation, which combines higher sales per company with a moderate growth rate.

Rental & Real Estate
This sector is booming, with Self-Storage standing out due to its impressive 21.2% profit margin and significant sales per company. The high percentage of businesses with fewer than 10 employees across this sector indicates a favorable landscape for entrepreneurs looking to enter the rental or real estate markets, especially those interested in niche markets like Formal Wear and Costume Rental.

Professional Services
Professional Services offer substantial opportunities, highlighted by sectors like Building Inspection Services and Paralegal, Patent, Processing, and Notary Services, which combine high growth rates with lucrative profit margins. The prevalence of small operations (with fewer than 10 employees) suggests a welcoming environment for startups and consultancies.

Basic Services

From Extermination and Pest Control to Locksmiths, the Basic Services sector provides essential services with steady growth and profitability. Carpet Cleaning and Janitorial Services, in particular, show high potential with considerable franchise presence, indicating scalable business models.

Education
The Education sector, covering areas from Driving Schools to Health and Safety Training, presents significant growth opportunities, especially in niche markets with high demand for specialized training and coaching services.

Care
Focusing on services that enhance well-being, the Care sector includes Alternative Medicine and Child Day Care, offering solid growth and the potential for rewarding ventures, especially given the societal shift towards holistic health approaches.

Arts & Recreation

With businesses ranging from Recreational Clubs to Gyms and Fitness Centers, this sector caters to diverse interests, showing robust growth in areas that enhance lifestyle and leisure, with Marinas and Family Fun Centers highlighting the mix of high sales and growth rates.

Leisure & Food
This vibrant sector, including everything from Food Trucks to RV Parks, illustrates the changing landscape of leisure and dining. Notably, Food Trucks demonstrate significant sales growth, catering to the growing trend of mobile and accessible dining experiences.

Personal Services
Encompassing a wide range of services from Nail Salons to Appliance Repair, the Personal Services sector shows a strong presence of small businesses and high potential for entrepreneurial ventures that cater to everyday needs and personal care.

Each sector presents unique opportunities and challenges for small business owners. By analyzing the detailed metrics provided, entrepreneurs can better understand the landscape, identify niches with high potential, and leverage trends to their advantage, ensuring a more informed and strategic entry into the market.

About Kentley Insights


At Kentley Insights, we’re deeply committed to providing entrepreneurs, investors, and business leaders with the detailed market research and industry analysis necessary to navigate the complex business landscape of today. Our comprehensive reports delve into essential metrics such as market size, growth trajectories, competitive landscapes, and profitability benchmarks, offering a rich source of data for informed decision-making. By combining rigorous primary data collection with sophisticated analysis techniques, we ensure the reliability and actionability of our insights. This meticulous approach has established us as a trusted advisor for those seeking to explore small business opportunities, understand industry dynamics, or identify emerging trends.

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What are other Resources for Small Business Ideas?


Exploring the idea of starting or buying a small business involves thorough research and planning. There are numerous resources available online that can provide valuable insights, guidance, and tools to help you make informed decisions. Here are some essential resources to consider:

U.S. Small Business Administration (SBA)

The SBA offers a wealth of resources for small business owners, including planning tools, financial assistance programs, and guides on starting and managing a business.
Visit SBA
SCORE

SCORE provides free mentoring from experienced business professionals, workshops, and educational resources for start-ups and existing businesses.
Visit SCORE
Stratechi.com

Stratechi.com offers a vast collection of free business samples, templates, and planning tools to help you start your business on the right foot.
Visit Stratechi.com
Entrepreneur

Entrepreneur.com is a leading source of news, advice, and inspiration for entrepreneurs, including articles on buying and starting new businesses.
Visit Entrepreneur
BizBuySell

BizBuySell is the internet’s largest business-for-sale marketplace. It offers listings of businesses and franchises for sale, along with resources on buying a business.
Visit BizBuySell
Franchise Gator

For those considering buying a franchise, Franchise Gator lists franchise opportunities and provides resources on franchising basics.
Visit Franchise Gator
Inc. Magazine

Inc. Magazine offers articles, advice, and tools for small businesses and entrepreneurs, covering everything from startup strategies to growth tips.
Visit Inc. Magazine
Forbes – Small Business Section

Forbes provides insights and analysis on small business and entrepreneurship, including trends, advice, and success stories.
Visit Forbes Small Business
National Federation of Independent Business (NFIB)

NFIB is a member-driven organization advocating for small and independent business owners. It offers resources on starting, managing, and growing your business.
Visit NFIB
Small Business Trends

An online publication for small business owners, entrepreneurs, and the people who interact with them, offering news, tips, and resources.
Visit Small Business Trends

These resources provide a comprehensive toolkit for anyone looking to dive into the world of small business, whether through starting a new venture or purchasing an existing business or franchise.