Entrepreneurs start companies for all sorts of reasons. Maybe they have a passion, like being in control, want more flexibility–or even hate their current jobs.
But no matter the inspiration, one thing’s for sure: They’d better make money. A rising revenue line might make for good cocktail conversation, but 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 and least profitable businesses–on a pretax basis–that aspiring entrepreneurs might hope to launch. Average pretax profits ranged from a juicy 25% to a knee-wobbling negative 7%.
The data were drawn from recent financial statements for nearly 100,000 privately held companies in the U.S.–most with annual revenues under $10 million–and bucketed by Internal Revenue Service classifications. We included only industries for which Sageworks had data from at least 50 companies–750 in all–and eliminated categories too broad to be meaningful.
1: Community Care Facilities – Average Pretax Margin: -7.2%
2: “Other Support” Services – Average Pretax Margin: -2.6%
3: Beverage Manufacturing – Average Pretax Margin: -2.2%
4: Real Estate Related Services – Average Pretax Profit: -2.1%
5: Bakeries And Tortilla Manufacturing – Average Pretax Profit: -0.9%
6: Amusement and Recreation Services – Average Pretax Profit: -0.9 %
7: Motor Vehicle Parts Manufacturing – Average Pretax Profit: -0.7 %
8: Specialty Retailers – Average Pretax Profit: -0.5%
9: Beer, Wine And Liquor Retailers – Average Pretax Profit: -0.18%
10: Travelers’ Accommodations – Average Pretax Profit: 0.26%
Photo by Comstock.