Some people venture into entrepreneurship knowing what industry they want to conquer and what type of business they want to start. However, for many new entrepreneurs, it can be difficult to figure out how to start a business and exactly what kind of business is the best choice. It’s tough to find that perfect idea.
We’ve compiled a list of the most profitable small businesses for 2020. Each of these business types is growing quickly and can provide you with a good living. Even better, none of them require a lot of capital to start out with. With the right combination of hard work, determination, and resourcefulness, you can start one of these most profitable businesses in 2020.
Most Profitable Small Businesses in 2020
With the rise of technology, many of these most profitable businesses fall under the realm of online business ideas—but not all of them. You’ll also find ideas that fall within the realm of childcare, others that correspond more to B2B services, and some that suit entrepreneurs who are looking to be on the move with their businesses. This being said, there’s nothing to say that any business idea that you come up with won’t be profitable, but if you’re looking for a good place to start, you’ll want to check out this list of the most profitable small businesses:
1. Auto Repair
Taking a car to the shop for even simple repairs can be a challenge. After all, most of us use our cars to get from place to place— that means taking a car in for repairs often either involves a long wait at the repair shop, renting a vehicle for the day, or coordinating a ride with a friend or spouse. These options are both expensive and inconvenient.
The good news is that while some repair jobs do require the equipment of an auto shop to complete, there are plenty of maintenance and repair services that need just a few simple tools to complete. If you’re skilled as a mechanic, you might consider a mobile auto repair service as one of the most profitable business ideas. You can offer oil changes, fluid refills, battery swaps, headlight repair, and more right in your customer’s driveway or office parking lot.
2. Food Trucks
The food truck movement is slated to keep growing and growing. As rent in major cities across the country increases, it’s becoming more difficult for up-and-coming specialty food artisans to finance a brick-and-mortar location in the bustling centers of town—where their customers are most likely to be.
Food trucks provide a great solution. You can start a food truck by hitting the road and parking yourself at local events, farmers markets, the local town square—wherever you’re likely to draw a crowd. The lower overhead and increased geographic versatility of a food truck mean you can turn your grandma’s famous dumpling recipe or that off-the-wall dessert idea into its own thriving business.
Keep in mind that bigger, trendier cities like San Francisco, Portland, and Boston already have a pretty saturated food truck market—so this might be a more successful business in a smaller heartland metropolis. Food trucks also tend to have their own special set of ordinances, business licenses, and safety compliance standards, so contact your local health department to find out what will be required.
3. Car Wash Services
Next on our list of the most profitable businesses: mobile car wash services. It seems safe to say that many people would pay a premium for a mobile car wash that came to them, instead of having to drive across town to access a car wash. This is especially true for people with upscale cars who prefer more personalized service. As a mobile car wash and auto detailing service, you wouldn’t only benefit from the unique value proposition of being mobile, but you’d also avoid the significant overhead and startup cost of having a physical location.
Not sure how to start your own mobile car wash service? There are a variety of online wholesalers that offer auto detailing startup kits, as well as training for those interested in starting their own business in this niche industry.
4. Electronics Repair
To say that Americans these days are obsessed with electronics would be a bit of an understatement. People spend most of their waking hours staring at a screen of some sort. This widespread tech addiction means that when something goes wrong, people want help as soon as possible.
Therefore, there’s no doubt that mobile electronic repair services are popular and could easily be one of the most profitable small businesses. With this service, you could be the solution for every broken iPhone screen, WiFi card, and laptop battery. Plus, you’ll be even more successful if you’re willing to travel to your customer. Apple stores and other electronics retailers have come under fire recently for long customer wait times, which could work in favor of mobile providers.
This being said, although a mobile electronics repair business involves some overhead in the form of purchasing supplies, keeping your business mobile saves you from the high overhead cost of a physical location—making it an even more profitable service business idea.
5. IT Support
Although two-thirds of Americans think they are tech-savvy, the truth is that they often need to rely on tech support. Some even make their computers or other devices vulnerable to hackers and identity theft. Unfortunately, when things go wrong, often the free customer phone support provided by manufacturers doesn’t feel supportive or fails to solve the problem.
If technology comes easily to you—and you’re a relatively patient person—then the most profitable business for you might be hitting the road, at least in your neighborhood, with mobile IT support. All you need is time, transportation, and your own know-how—so this low-overhead business model is almost pure profit.
6. Personal Trainers
Turning your love of fitness into a career doesn’t have to mean working for a big corporate gym—nor do you need the overhead of having your own location to train clients. Throw a few weights, bands, and yoga mats into the trunk of your car, and take your fitness show on the road.
You can become a personal trainer by offering one-on-one sessions in your clients’ homes or advertising group classes at a local park or community center. Making fitness more available to your clients might just be the ticket to helping both of you achieve your goals. As Americans start to eat healthier and exercise more, fitness and wellness businesses are increasing in popularity and becoming some of the most profitable businesses as well.
7. Newborn and Post-Pregnancy Services
Although millennials are deferring parenthood for longer than previous generations, they eventually want to have kids—in fact, in 2016, 1.2 million millennials became first-time mothers. Therefore, the need for child-oriented businesses is growing, starting with post-pregnancy and newborn-related services.
Demand for doulas and lactation consultants, in particular, have risen among new mothers, and both business options have relatively low overhead requirements beyond education and certification—meaning these professions could easily become one of the most profitable businesses for you to start.
8. Enrichment Activities for Children
While the number of children in the United States grows, shrinking budgets for education mean that both traditional academics and enrichment subjects like music, art, and athletics have taken a significant hit.
As a result, more parents are turning to private businesses for enrichment activities outside of school. This being said then, one of the most successful businesses for you might be a gymnastics center, music school, swimming instructor, kids’ yoga teacher, or other child-centered activity. If you have a skill that could be easily taught to young students, you might already have a profitable business in the making.
9. Mobile Apps and Entertainment for Children
On the other hand, if your interests lie closer to tech or entertainment, consider gearing your technology toward the youngest of consumers. Research shows that regardless of expert recommendations, demand for tablets, apps, and mobile entertainment for children is on the rise.
Do you have an idea for an educational app for children or parents? If so, now’s the time to move forward on your bright idea for the next generation and make this potentially profitable business a reality.
10. Shared Accessories and Attire
Sites like Rent the Runway and Gwynnie Bee have banked on the idea of the sharing economy—where we want and need to own less stuff, so instead, we share resources. This trend has led to small business opportunities for these companies, who offer borrowed or rented clothing and accessories at a fraction of their purchase prices. And because the same piece of inventory can generate revenue multiple times, the profitability of these ventures is pretty significant.
Do you have an eye for fashion and a sense of style not currently offered by other rental services? Maybe you’re ready to be the next big thing.
But even if you’re not prepared to launch a multi-million dollar fashion startup, you can just as easily profit from shared fashion at the local level. Gather some favorite accessories or clothing picks and host a borrowing party for high school students before the next formal dance. If you’re in a college town, Greek life formals are another great opportunity to profit from shared economy fashion. And because you’re taking shipping costs out of the equation, you have the potential to be even more profitable than the larger startups.
11. Shared Home Improvement Equipment
Are you the go-to guy or gal in your neighborhood for every lawn, garden, and home-repair tool under the sun? Why not turn those favors into a profitable business by advertising your available equipment beyond your immediate friend group?
You might even decide to invest in more specific and higher-cost equipment that would be useful to those around you. And if a customer doesn’t know how to use a specific tool, combine your equipment rental with a mobile handyman service for even more cash in the bank. This could be a big opportunity as one of the most profitable business ideas as more people invest in fixer-upper houses and are in need of tools and advice.
12. Vacation Rentals
Sites like Airbnb or VRBO have made it easier than ever to profit from your unused vacation property—or even your extra bedroom. Plus, it’s not too difficult to become an Airbnb host and the demand for these types of rentals has only grown in recent years. Therefore, if you live in a highly desirable tourist destination, you can easily make a profit renting space in your home to travelers.
13. Academics Courses
Again, with the growth of technology, online business owners are making some of the most profitable businesses by offering courses through educational platforms or independently through their own websites. Therefore, you might start with traditional academics, offering supplemental online instruction in grade-level reading math, science, or history, or even standardized test preparation.
You could even create a review course for parents helping teens with their algebra homework. If you’re creative, the possibilities are truly endless. And, academic courses don’t have to end at the high school or even college level. You can create an online course to share your love of political history, Buddhist theology, or rocket science. If you’re interested in a particular subject, chances are high that someone else is, too.
14. Language Courses
Additionally, as communication improves and borders blur, consumers all over the world are looking to learn languages. Whether you take to the online education with expertise in the English language, or you harness your mastery of Swahili, there’s likely someone out there that wants to learn a language from you. And they’re probably willing to pay for it. You might have a successful business on your hands especially if you speak the most in-demand languages in 2020 and beyond—such as Arabic, Spanish, and Mandarin.
If you’re skilled in an obscure language, or you’re especially adept at teaching a more widely-known language, then an online language-based educational session could be one of your most profitable business ideas.
15. Business or Marketing Courses
The sad reality is that while liberal arts degrees might develop critical thinkers, many college graduates don’t come away with marketable skills that make them successful in business. Your ability to fill in those gaps with your own expertise could be one of the best small business ideas that you can start with very little initial cost.
What skills and lessons have you learned the hard way in your own business or career? Share your expertise with fellow entrepreneurs through a B2B-oriented online course. Popular course topics include bookkeeping, QuickBooks accounting, WordPress web development, graphic design, how to develop a great client proposal, or even how to write a great cover letter or resume.
16. Personal Wellness
Are you a therapist or counselor, a yoga instructor, a life coach, or a long-time meditator? If you have a deep passion for personal wellness, you might be able to help others find their own zen—while also earning a significant income. All you have to do is share what you know.
If you’re skeptical about the combination of personal wellness and online courses, look no further than Oprah. She’s the personal wellness queen and has been an early advocate of online courses—including author Brene Brown’s CourageWorks on the power of vulnerability.
Every person has a desire to better themselves, and that’s exactly what online courses are all about. If you have this expertise to share, you could easily turn your knowledge into one of the most profitable businesses.
17. Courses in Other Hobbies
While many courses are designed to further an education or career prospects or to promote major life change, you can just as easily design an online course around any hobby or interest. Do you have a passion for calligraphy or craft brewing? Have you mastered a certain video game? You’d be surprised at the number of people willing to pay to learn about topics they’re interested in.
Not sure how to start designing your own online course? Well, there are even online courses for business owners. You can use one of these courses to propel your own online course business, or any of the other ideas on our list of the most profitable small businesses.
18. Bookkeeping and Accounting
Accounting and bookkeeping are an unavoidable reality of business ownership. But for many entrepreneurs, money management is the very worst part of owning a business. Whether you’re a licensed CPA or just a QuickBooks wizard, you might be the perfect candidate to launch your own business by keeping your fellow entrepreneurs’ personal and small business finances in order. With a net profit margin of 19.8%, bookkeeping, accounting, tax preparation, and payroll services have long been some of the most profitable businesses for entrepreneurs.
As a bookkeeper, you can process invoices and payroll, compile expense reports, and more. If you have a CPA license, you can help business owners file taxes, generate balance sheets and other accounting documents, and make your professional recommendations about your client’s bottom line.
If you’ve been in the business world for a long time, folks may be clamoring for your knowledge and expertise within your industry. Why not turn all that know-how into a new career as an independent consultant?
You can be paid to speak at industry conferences or events, serve on a board of advisors for a fledgling business, or lend your expertise to shape the strategy of an existing business on a contract basis. Whatever your skillset, starting a consulting business is a great way to make the income of your dreams while working on your own terms.
20. Graphic Design
As the number of brands vying for consumers’ attention grows, a slick and polished image has become more important than ever for small businesses. Regardless of whether they can afford a large-scale advertising or marketing agency, almost every small business will need some amount of graphic design work now and again.
Do you know your way around Photoshop, Illustrator, and InDesign? Have you taken a few design classes, and do you have an eye for good branding? Turn your skills into a business as a freelance graphic designer. You’ll have almost no overhead and can charge significant hourly rates to do what small business owners can’t do for themselves—create awesome marketing graphics.
21. Social Media Management
Most millennials were born and raised on social media. As customers, they expect a business to have a strong social media presence and to be responsive in social customer service.
However, although most fellow small business owners know that they need to engage in social media marketing, few have the necessary time or expertise to “do social media” well, let alone manage all of their social media accounts.
If you’re fluent in Twitter, live your life on Facebook, and have gotten every job you’ve ever had through LinkedIn, you might consider turning your social media expertise into your own solopreneur business venture, offering support to business owners who need help managing their brand’s social media platforms. There’s no doubt that in this day and age, starting a social media consulting agency can easily become one of the most profitable small businesses.
22. Marketing Copywriter
Similarly, if you’re particularly adept with words, you can use your talents to write copy for various companies’ marketing efforts. The content marketing industry is slated to be worth a whopping $412 billion by 2021.
Whether you’re coining a catchy slogan or writing an in-depth description of a company’s offerings, if you’re doing it as an independent contractor, then you know you’ll be earning a profit for your services, no matter what.
23. Virtual Assistant Services
Finally, last on our list of the most profitable small businesses: virtual assistant services. When the pre-Recession economy was at its peak, every entrepreneur, manager, or executive had a personal or executive assistant. Years later, many still have the workload and full schedules that make having an assistant useful (if not necessary), but many still can’t or don’t want to pay for a full-time helping hand.
To fill the gap, virtual assistants have become the quintessential hybrid of freelance gigs and side hustles. As a virtual assistant, you can choose your clients and create your own schedule managing emails, scheduling meetings, booking travel, and completing other basic tasks to make your customers’ lives run more smoothly. All you need is a laptop and an internet connection to start this profitable business.
3 Steps to Start a Profitable Business
As you can see, the most profitable businesses span different industries, time commitments, and startups costs. This being said, regardless of which most profitable business idea you’re leaning towards, there are a few things you’ll need to get your business started.
Therefore, if you’re still in the initial planning stages, you can consult these three steps to get the ball rolling:
Step 1: Find the perfect idea and do your research.
A business starts with a good idea. But in order to make that idea a reality, you need to do your research to make sure the concept will succeed. Go through an idea validation process—including market and competitor research, and financial feasibility analysis—before you’re too far in. Consulting this list of the most profitable businesses will be your first step in this process.
Step 2: Get organized and make it official.
When you’re sure that you have a good idea to work with, it’s time to plan out the logistics of the business with a well-formulated business plan. When you’re confident that you’ve got it all down in writing, you’ll want to take steps to make it official. This includes choosing a business structure, applying for an EIN, registering your “Doing Business As” name (if necessary), and getting the business licenses and registrations your specific business needs to open its doors.
Step 3: Find the right financing.
Every business needs capital to grow, and startups are certainly no exception. But as a new startup owner, you might struggle to qualify for traditional business loans right off the bat.
That’s why we recommend you start funding your initial growth with a business credit card. Not only will you have an easier time qualifying for a credit card than you would a traditional business loan, but you’ll also kick-start your business credit history, earn perks and rewards as you spend, and take advantage of interest-free 0% introductory APR periods (that’s like a free loan).
Business Startup Toolkit
As we’ve alluded to in the last step, finding capital and managing your finances is a significant part of starting your business. Even if you don’t yet have a ton of finances to manage, getting yourself set up for success can be the key to ensure that your business will be profitable.
To help you with this process, therefore, we’ll break down some recommendations as part of our most profitable business startup toolkit—including top business bank accounts, business credit cards, and accounting software.
Business Bank Accounts
Opening a business bank account is one of the first and most important steps that you’ll need to take in order to separate your business and personal finances. Luckily, there are a number of different business checking and savings accounts to choose from, depending on what you’re looking for.
Chase Total Business Checking
First, if you’d prefer a business bank account from a traditional financial institution, you might consider Chase Total Business Checking.
With this account, you’ll only have to pay $12 per month (if you enroll in paperless statements) and you’ll receive 100 free transactions monthly, plus unlimited free electronic deposits. Additionally, you’ll be able to deposit $5,000 in cash per month, without an additional fee. Moreover, Chase has a network of 16,000 ATMs across 26 states and requires no minimum first deposit. Plus, Chase is currently offering a $300 cash bonus for business owners who open a new account.
Azlo Business Checking
On the hand, if you’d prefer an online-based bank with no fees, you might look into Azlo Business Checking.
With Azlo, you’ll be able to open and manage your account wholly online—plus, you’ll have no minimum first deposit and no monthly fee. Additionally, Azlo includes free electronic payments, free incoming wire deposits, unlimited in-app invoicing, mobile check deposit, and free bill pay. Moreover, although Azlo is an online-based bank, they give you the ability to withdraw cash fee-free, at over 55,000 in-network ATMs.
This being said, although these are two of many business bank accounts that you might decide to open, it’s important that you find the right one for your business and check off the first item in our most profitable business startup kit.
Business Credit Cards
Once you’ve chosen a business bank account, the next thing that you’ll want to get to help manage your finances—and in this case, actually finance your business, is a business credit card. With a business credit card, as we mentioned above, you’ll be able to cover business expenses, build business credit, and even earn rewards along the way. So, like business bank accounts, there are a number of business credit card options to choose from including those with cash back rewards, rewards points, and travel-specific rewards.
Here are three top options you might consider:
Chase Ink Business Unlimited
First, for a flat-rate cash back card that also offers one of the longest 0% intro APR periods on the market, you might choose the Chase Ink Business Unlimited. This card allows you to earn an unlimited 1.5% cash back on all purchases, has no annual fee, and offers a $500 welcome bonus if you spend $3,000 on the card within the first three months after opening your account.
Moreover, and particularly notable for new business owners, is this card offers a 12-month 0% intro APR period, meaning you can carry a balance on purchases you make interest-free during this time. After the 12 months are up, however, your APR will set in at a rate that will vary based on the market Prime Rate and your creditworthiness.
American Express Blue Business Plus
Next, you might consider the American Express Blue Business Plus. Like the Chase Ink Unlimited, this card offers a 12-month 0% intro APR period, however, in this case, it applies to both purchases and balance transfers. Once again, after the 12-months are up, you’ll receive a variable APR based on the market Prime Rate and your creditworthiness.
Additionally, the Blue Business Plus has no annual fee and offers rewards in the form of points, instead of cash back. You’ll earn 2x rewards points for the first $50,000 you spend on purchases and 1x rewards points on all purchases after that threshold is met.
Capital One Spark Miles Select
Finally, for a business credit card with travel-specific rewards, you might consider the Spark Miles Select from Capital One. This card earns 1.5x miles on every purchase with no limits on the amount you can earn. The Spark Miles Select also has no annual fee, no foreign transaction fees, and offers a 20,000-mile welcome bonus if you spend $3,000 within the first three months with the card.
Moreover, the Spark Miles Select offers a nine-month 0% intro APR period on purchases, meaning you can carry a balance on the card interest-free during this time. After the nine months have ended, however, a variable APR will set in based on the market Prime Rate and your creditworthiness.
Once again, there are many other options for business credit cards on top of these three. Therefore, you’ll want to explore all of your options and find the credit card that will work best for your business.
The last item within our most profitable business startup toolkit is accounting software. Choosing a business accounting software is crucial to help you automate your day-to-day bookkeeping tasks and keep your finances up-to-date and organized. This being said, you might look into either of these top two accounting solutions for your business:
Perhaps the most popular accounting software for small business owners, QuickBooks Online can serve businesses of all shapes and sizes. With QuickBooks, you’ll be able to manage your basic bookkeeping and accounting tasks, prepare your taxes, invoice customers, and more.
There are five different QuickBooks Online plans, each ranging in price and functionality. Plus, with the popularity of QuickBooks, you’ll easily be able to find an accounting professional to help you with your books or answer any questions you may have about this platform.
Wave Accounting Software
On the other hand, if you’re not ready to pay for accounting software, you might consider the top free solution, Wave accounting. With Wave, you’ll be able to track your income and expenses, invoice customers, connect your bank account and credit cards, customize sales taxes, export reports, and more. Plus, Wave’s basic software is completely free—all you have to do is sign up for an account online to get started.
However, if you decide you want to make the most out of your Wave software, you also can opt for their payroll or payments add-on, in order to accept payments from your customers through Wave or manage your payroll processes.
Once you’ve added these three items to your most profitable business startup toolkit, you’ll be in a great place with regard to your business finances. At this point, you might consider other business tools or platforms you might need, such as legal services, payroll software, or other solutions that will be helpful to your specific business or industry.
The Bottom Line
At the end of the day, although industries like healthcare technology, finance, and product manufacturing might dominate the stock market and the Fortune 500-level economy, those same industries aren’t necessarily the most profitable or accessible options for small business entrepreneurs.
Instead, many of the most profitable businesses for first-time entrepreneurs are going to be those that are easy to get started, have low initial costs, and that can capitalize on a market need or trend. As you’ve seen through our list of the most profitable small businesses, there are plenty of ideas that will suit the full range of business ownership experience and preferences.
Ultimately, all you have to do is pick the winning idea for you, start planning, and get things up and running—and before you know it, you’ll quickly reap the benefits of a most successful business venture in 2020.