February 3, 2023


Foundr
A magazine for young entrepreneurs
Categories
Written by Mary Kate Miller | August 15, 2022

Want a heads up when a new story drops? Subscribe here
While profit may not be the only impetus for starting a business, it’s certainly among the deciding factors. Whether or not a new business succeeds or fails depends on its ability to generate a profit. Building an audience/customer base, marketing, developing a solid business plan are all important elements of the most successful business, and they all lead back to one place. (Do you see where this is going?)
Turning a profit is a lot easier when you’re starting with a profitable business model. So what are the most profitable businesses of 2022? Let’s take a look.
Ecommerce businesses, the blanket term referring to all businesses where products are bought and sold over the internet, are consistently ranked among the best and most profitable businesses to start. Why? Because they’re easy to launch, don’t require the overhead cost of a brick-and-mortar footprint, and it gives you access to a geographically diverse customer base. With more than 2 billion ecommerce customers online, now is the time to start an ecommerce.
Want to learn how to start a profitable online store in 12 weeks or less? Check out the free course.
Dropshipping is a subcategory of ecommerce that refers to businesses that sell products they don’t actually have on hand. Instead, the product is shipped directly from the vendor to the customer. Dropshipping reduces your inventory costs and as a result, increases your net income. And by 2028, the global dropshipping market is predicted to grow 20% each year.
Dropshipping is common in industries where customers expect a broad range of product that might be cost-prohibitive for a small business to keep on hand, like bookstores. A lot of local bookstores, for example, might use dropshipping to ship directly from the publisher or a partner like bookshop.org. This allows them to offer a wider selection of books without having to contend with the challenges of storing one or 2 copies of a niche title on the off chance one customer might want it. Be wary of the risks of dropshipping, which include quality control, branding, and customer service.
Vacation and home rentals are more popular than ever. The home rental business has boomed as a result of the COVID-19 pandemic, with 2021 home rental annual revenue reaching $40,000 per year. What’s driving the increase in demand? Some travelers are looking for drivable destinations, opting to seek out somewhere secluded where they can achieve some R&R. Others are gravitating toward individual vacation rentals instead of traditional hotels in order to mitigate risk by eliminating exposure to other guests. With the mass transition to working from home, still others are seeking a space where they can work away from the distractions of family. As much as we’d all like to put the pandemic behind us, signs point to vacation and home rentals to remain a top-notch business opportunity for the foreseeable future.
Game changing advice button
Professionals are consistently looking for ways to sharpen their skills and advance their careers, providing a profitable business opportunity for savvy entrepreneurs who want to turn their expertise into passive income. Courses that cover business finances and accounting, strategy, management, negotiation, sales/marketing training, and public speaking drive consistent demand. The course industry is only expected to grow, with the market expected to grow to $375B by 2026. Want to get started? Watch our free training on starting your own profitable online course.
The marketing landscape has been changing, and many businesses and professionals are looking for guidance on how to adapt. Creating an online marketing course covering email marketing, social media management, SEO, or database marketing can generate a profit with minimal investment.
Are you a multi-lingual entrepreneur? Consider creating a language course. The language-learning industry has continued to expand. To stand out from the competition, you want to identify your target market. Who is your ideal student? Identifying your niche and narrowing your audience will drive higher conversion and increase profitability. Instead of offering “Beginning Spanish,” consider something more specialized like “7 Days to Business-Trip Spanish.”
The final sector of the online course industry is hobby-related courses. Think: embroidery, woodworking, or singing. There has been a growing demand in recent years for these online courses due to the cost-effective pricing and convenience. The pandemic has increased demand here, too. People who have transitioned to working from home now have more time to explore the topics that interest them. Others have taken stock of what matters to them and are finally gathering the courage to take a stab at beginner piano. As a result, launching a hobby-related course in 2022 is an exceedingly profitable business idea.
Bookkeeping and accounting service businesses maintain consistent demand because everyone has to file taxes, and many either don’t want to or don’t know how to manage tax preparation. If you work in personal accounting, you’ll likely see a boom in the spring as individuals look for help filing their taxes, but there are greater profit opportunities in the small business space. Your average small business owner doesn’t have the bandwidth or the expertise to manage the bookkeeping themselves, and they might not have the resources to hire an on-staff bookkeeper. With a net profit margin of 18.4%, accounting and bookkeeping services is one of the most profitable industries you can go into in 2022.
There is consistently high demand for graphic design services because stellar graphic design can be a market differentiator. In the age of digital marketing and Instagram-friendly advertising, a company’s graphic design is arguably more important than it ever has been. How profitable your graphic design business depends on how much labor you’re putting into the projects compared to how much you’re charging. On average, graphic designers can earn from $15 – $35 per hour, depending on their experience.
Thankfully, graphic designers can run highly profitable companies due to low overhead. But they can also fall victim to scope creep and other revenue-eating practices. To ensure maximum profitability, build your business model to target higher revenue/lower labor projects. You can avoid scope creep and other pitfalls with a clearly outlined consulting proposal. For tips on how to put together a winning consulting proposal, consult our guide.
Last year, digital agencies earned $20B in revenue. That’s a huge chunk of opportunity to start and build a profitable agency. Want to learn how? Take our free digital agency course.
As we mentioned above, social media marketing is more important than ever. Social media advertising is the second-largest market within digital advertising. The global industry revenue of $138.2 billion is expected to grow to $18.4 billion in 2025. A rapidly expanding market combined with the low investment required to start a social media consulting business makes this one of the most profitable opportunities for savvy digital marketers.
Digital marketing is an ever-evolving industry. For many small businesses, keeping up with the latest trends in email marketing or the next Google algorithm update can eat up too many resources. If you have the skills to offer it all—email marketing, SEO, copywriting, social media—you can package it all into a high-profit digital marketing service.
Copywriting is more than just pretty words and catchy taglines (though of course, it can still be that, too). As companies look to build their audiences, copywriters with a knack for writing viral or SEO content can rake in the money. What makes copywriting such a profitable small business idea? Digital marketing assets—specifically those related to SEO and social media—can be revenue-generating machines for companies, and they come with the metrics to prove it. If you can deliver real value for a client, you can demand a hefty sum for your work, up to $45 per hour. The best part? There’s virtually no startup cost to get this business off the ground.
Want to start a profitable copywriting business? Take our 7-Figure Copywriting course for free.
 
Affiliate marketing is a business model where a company pays a third party to generate leads or traffic to the company. These days, everyone from Instagram influencers to major news publications rely on affiliate marketing to drive profit. If you have a robust audience…or plan to build one, you can make bank with affiliate marketing. The industry generated $6.4 billion in 2019, and it continues to grow, making this one of the best small business ideas in 2022.
Ready to start growing your audience? Check out the Instagram Domination free mini-training.
Listen, we’re just going to say it. Most people don’t know how to use the tech they rely on to do their jobs. If you’ve got the chops, you can run a successful business in IT support. In 2022, the IT services market is anticipated to be $852 billion. Not too shabby.
Build your business button
Legal services are probably the most profitable of any service business. It’s high profit, consistently in demand, and relies on specialized knowledge. The specialization also allows legal entrepreneurs to focus on the work they like the most whether it’s working in estate planning, catering to a commercial bank, or providing legal services for real estate deals, there will always be a need for legal service.
While some major repairs require a trip to a full auto repair shop, a lot of fixes can be done with a simple set of tools. The average age of vehicles has risen to 12.1 years, which means more people are holding onto their cars and would rather repair what they have than buy. If you’re a skilled mechanic, you can launch an auto repair service with minimal startup costs and start generating revenue in a flash. Then, when you’re ready to scale, you can open your own auto repair shop and capitalize on those bigger repairs, too.
Businesses can typically handle higher price points and service fees than end consumers, making B2B services a highly profitable industry with a 22% year-over-year growth rate expected through 2027. Many of the other businesses outlined here can be marketed to other businesses, including real estate, cleaning services, bookkeeping and accounting, legal services, and marketing.
Read more: How B2B Sales is Changing Through Virtual Engagement 
Real estate continues to draw investors because it’s a perennially profitable industry. The perks of real estate include the opportunity to generate passive income along with a business model that relies on the asset that generates the revenue (land or a building) appreciating over time. Real estate does come with risk, and it requires a pretty substantial investment. A really successful real estate business typically relies on a slow-and-steady business model, generating a smaller, more consistent profit stream over a longer period. Be wary of house flipping and other real estate models that can veer into the “get rich quick” scheme, especially if you don’t have experience in the industry. If you have the cash flow and the risk tolerance to make it work, real estate can be one of the most profitable businesses out there.
2022 real estate continues to be strong even with market changes and inflation causing rises in interest rates. It’s always a game to decide when the best time is to get in the real estate game, so reach out to relator associations in your area and ask questions before you get your license.
Software development relies on a technical skill set. If you put all your dev skills into proprietary software that can then be marketed to other businesses, you have a highly successful business in the making. Most businesses are in need of technical solutions that they can’t create on their own. While you could also work ad-hoc creating solutions via software consulting, creating proprietary software allows you to market the same product to a wide audience without requiring the project-by-project dev resources, increasing your gross profit.
Data science is an industry driven by expertise. If you can give business leaders the data analytics they need to make informed decisions, you can demand premium pricing, with an average hourly rate near $60. These days data is king, and if you know how to manage data to tell a compelling story, the sky’s the limit. Specializing in a specific platform like a CRM (Salesforce, SAP) or data tool (Microsoft Power BI) can make you stand out to companies looking for third-party advice or expertise for their data tools.
Read more: The Complete Guide to Getting Clients for Your Consulting Business
As concerns over climate change and global warming proliferate, there’s more pressure to do something, especially in fashion (the second most polluting industry). The market for clothing resale and rental is massively expanding, and with Gen Z gravitating more towards vintage and reused clothing, trends look like this industry niche will grow 127% by 2026.
The COVID-19 pandemic caused a massive spike in demand for home improvement businesses, with average spending rising 25% year-over-year to $10,341. There have also been increased material costs due to supply chain issues, squeezing the profit margin a bit, but as supply chain issues level out (as some of them already have) home improvement businesses will continue to be among the most profitable businesses.
There has been consistent demand for cleaning services, especially given the COVID-19 pandemic. High demand offers high-profit potential, with cleaners getting paid an average of $40-$45 per hour. Cleaning services are also scalable, require minimal overhead costs, and they have high levels of customer retention. Given that customer acquisition is one of the highest costs for many businesses, that gives cleaning services an extra boost in the profit department.
Look for archaic businesses that need to get with the times. Currently, vending machines and laundry mats are 2 business opportunities with old models and systems. If you have enough cash up front, you can quickly spruce up a laundry mat with some fresh paint and an updated logo. The best part about these types of businesses is that they are still primarily cash-based. This means there is less overhead for implementing technology systems to get them up to speed.
Read more: How Codie Sanchez Built a TikTok Following on “Boring Businesses” 
More than ever, people are willing to spend money on personal health. The health and wellness industry is $4 trillion and growing. Thanks to the COVID-19 pandemic, more people are working out from home and getting medical consultancy over Zoom. That means that buildings and equipment costs, the most expensive part of a health and wellness business, can be cut. Use your personal experience and brand to start coaching people 1-on-1 online in fitness, diet, mental health, career, or all of the above.
2022 is the year of the content creator (the term formerly known as influencer). It’s never been easier to start a brand and build profitability around it. So here are some brand-building ideas that help you grow an audience that can give you back cash:
Remember, if you start a brand to ONLY make money, then your audience will quickly unsubscribe, unfollow, and ignore you. Building an audience that can support you financially takes patience, consistency, and dedication. Most content-driven brands take years before they have a dedicated audience that will support them via membership, merchandise, and spin-off products.
Being a profitable business means that your revenue minus expenses results in the black. When you’re just starting, this formula is simple, but the more you grow, the more complicated the numbers can get. Take our Finance for Founders course to refresh on financial concepts you need to know before starting a business.
At foundr, we’ve interviewed and collaborated with leaders across industries and business sizes. One of the commonalities for success is passion. You need to be motivated by solving a problem or the mission of your brand. That could be as simple as wanting to help people in your neighborhood drive safe cars or as big as solving the archaic printer and ink system. Whatever your business idea is, it won’t be profitable year over year if you don’t love what it provides for society.
Starting a business is hard. Staying in business is harder. Your business will have an inflection point when you need to invest more to grow. That’s when you’ll need to decide what you’re willing to risk for what you want. Do you want to be the CEO of a 50-person agency or have enough clients to pay your bills? These decisions will dictate your profitability, whether it’s raising prices, hiring an employee, or purchasing a new software. Remember that overhead kills your profitability, and the biggest profit suck is people. Don’t hire unnecessarily. Otherwise, you’ll overstretch your bottom line.
Ready to start your business? Here are some helpful resources to take your business from idea to reality.
Exclusive free training
Building a Business
About Mary Kate Miller
Mary Kate Miller writes about small business, real estate, and finance. In addition to writing for Foundr, her work has been published by The Washington Post, Teen Vogue, Bustle, and more. She lives in Chicago.
Business Ideas for Women Entrepreneurs in 2023
GrubHub Founder Mike Evans is Back to Fix the Home Repair Industry — Exclusive
The 12 Best Business Startup Books Every Entrepreneur Needs
What Can I Sell Online To Make Money (20 Profitable Business Ideas)
Need Shopify Help? Here Are 5 Ways to Increase Your Shopify Sales
How Much Do Consultants Make? Time to Find Out.
Find a Business Partner Who’ll Help (Not Hurt) Your Business
How IRVINS Pivoted from a Humble Restaurant to a Pioneering Snack Brand – Founder Q&A
How Leah Toth Built a Business from a Love of Journaling
After $1 Billion in Exits, Gabby Leibovich Is Still Hungry for More
Breaking Down Barriers Led to Billions with Alex Bouaziz of Deel – Exclusive
Ecommerce Strategies for Beginners from a Veteran
Business Startup Funding: A Beginner’s Guide
10 Things to Do Now for the 2022 Holiday Shopping Rush
How to Boost Your eCommerce Sales This Holiday Season
FREE TRAINING FROM LEGIT
FOUNDERS
Actionable Strategies for Starting & Growing Any Business.
Watch now
Join 300,000+ entrepreneurs worldwide in learning the latest insights & tips you need to build a game-changing business.
© 2022 Foundr Magazine
Terms of UseTerms of SalePrivacy Policy

source

Leave a Reply