Most Profitable Businesses To Start
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Is Your Business Profitable?
Entrepreneurs start companies for all sorts of reasons. But no matter the inspiration, one thing's for sure: They'd better make money. If you don't turn a profit -- and keep turning one -- you won't be an entrepreneur very long.
With the help of Sageworks, a Raleigh, N.C.-based private-company data provider, Forbes.com has assembled a list of the 10 most profitable businesses aspiring entrepreneurs might hope to launch.
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Next: Accounting Services -
No. 1: Accounting Services
Average Pretax Margin: 25%
This industry includes services like bookkeeping, designing accounting systems, payroll billing and preparing financial statements and tax returns. A big yawn -- until you see the profits start to pile up. Three reasons: pricing power (everybody needs accountants, no matter how the economy is doing), low overhead and marketing scale, thanks to plenty of repeat clients.
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Next: Legal Services -
No. 2: Legal Services
Average Pretax Margin: 21.6%
Lawyers enjoy healthy economics for many of the same reasons their bean-counting brethren do. Overhead is relatively low (a secretary, an office lease, some computers, and a decent expense account). Business tends to come through referrals, keeping marketing costs down, and repeat business is high, thanks to perceived "switching costs" of trading one counselor for another.
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Next: Dental Services -
No. 3: Dental Services
Average Pretax Margin: 20.9%
Good teeth make for a bright smile. A big reason: operating scale. Dentists can handle several patients at once -- depending on the number of "chairs", dentists can run through multiple patients in one hour. Some of the equipment is expensive, but hygienists don't cost much to employ. Better yet, a lot of customers pay out of pocket. That gives dentists more pricing power relative to other medical providers.
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Next: Specialized Design Services -
No. 4: Specialized Design Services
Average Pretax Margin: 17.6%
This hodgepodge includes interior designers, industrial designers (not architects) and graphic designers. Efficiencies derived from technology, such as computer aided design software, have been a boon to these businesses. Meanwhile, design firms can charge a good buck for their talent.
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Next: "Other" Health Practitioners -
No. 5: "Other" Health Practitioners
Average Pretax Margin: 17.5%
Chiropractors, optometrists, podiatrists, physical therapists, speech therapists and mental health professionals know that it pays to specialize. These health practitioners often have more pricing power than general physicians, as many are able to circumvent the large health insurers and health maintenance organizations skilled at taking their pounds of flesh.
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