So what are the most profitable small businesses during a recession?
According to research firm Sageworks, it’s dentists, accountants, lawyers, doctors, and some other service businesses. And of course, dentists, accountants, lawyers, doctors, etc. tend to be small businesses.
Their profit margins range from 11.5% to nearly 17% net profit.
Here’s the chart showing the top ten and their respective profit margins, along with the government industry code:
This data is of privately held businesses that report data through their accounting firms, using a data analysis tool provided by Sageworks.
If you recall, about a month ago I reported data from Sageworks about the retail industries that were suffering.
It’s good to see that certain service businesses continued to do well. But why did they do well, while retail and others industries have not? Part of it is that they provide necessary services. Even during a downturn, you still go to the doctor or the dentist. Businesses still need accountants and lawyers.