Previously I wrote about the most profitable small businesses during a recession. The information came from Sageworks, which aggregates data reported by accountants that use the Sageworks data analysis platform. The data is from privately held companies, most of which are small businesses.
Several people left comments and emailed me wanting to know some additional businesses that were profitable during what we now know has been a recession since December 2007. So I went back to Sageworks, and this time have a list of the top 30 most profitable businesses for last year (12/29/2007 – 12/29/2008).
The number you see next to the description on each line is the government NAICS code (National American Industry Classification). I looked up some of the codes so that you could see, in plain English, a smattering of the types of small businesses represented.
- 3. Other Financial Investment Activities – includes investment advisers and portfolio managers
- 9. Nondepository Credit Intermediation – includes equipment finance leasing companies
- 15. Other Schools and Instruction – includes dance teachers, music instructors, automobile driving schools, martial arts studios
- 16. Other Ambulatory Health Care Services – includes ambulance services, stop smoking clinics
- 17. Other Professional, Scientific, and Technical Services – includes translation services, photography studios, veterinary services
- 20. Personal Care Services – includes barbershops, beauty salons, nail salons, weight loss centers
- 22. Land Subdivision – includes real estate developers
- 23. Specialized Design Services – includes interior designers, graphic designers, commercial artists
- 26. Management, Scientific, and Technical Consulting Services – includes human resources consultants, marketing consultants, security consultants, environmental consultants
- 29. Computer Systems Design and Related Services – includes software programmers, Web designers, disaster recovery services, IT consultants/integrators
Surprised by any of these?
Note: for comparison, you might want to look at Scott Shane’s article using U.S. Census data: Are There Recession-proof Small Businesses?
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Do you have more information on the Specialized Design Services category?
Teodor M Muntean
Very good info. I’ve digg, reddit and trackbacked it. Thanks.
I am shocked to see mining support services in the top 5 . . I never would’ve considered that.
#12 to me is a bit surprising. I would have thought that church contributions would be down a bit from previous years, because of the amount of job losses.
I’ll have to remind my financial planning advisor that’s he’s got one of the highest profit margins next time he takes a commision!
Health professionals will always be in demand even during recession..thanks for this list
#30 doesn’t surprise me 🙂 In fact, I’d expect that to be more so.
SIC Code 3328 is surprising since 332813 (Electroplating, Plating, Polishing, Anodizing, and Coloring) has suffered over the years in part due to EPA regulations. One local small business that I was curious about was hanging in there until 2008. The business is gone now, but that could have occurred due to many factors. Anyway, the fact that that segment earned an excellent margin is surprising. As Ivana said, it’s a surprise too that # 30 did not head the list.
I agree with Chuck – I was surprised to see coatings, etc. (SIC Code 3328) on this list) – they must charge a lot for the services … and/or have low costs. It would have been interesting to see a correlation between profit and sales $ (for the small biz category).
Dentists are number 1, really! That is amazing considering how many people hate to go to the dentist.
Very in depth knowledge you have.
And also nice explaning power.
14. automotive equipment rental and leasing
does this include the businesses that fix the cars?
i mean, the mechanics and so on….or just the businesses that sell equipment to the mechanics such as car parts and chemicals?
The reason Accounting is so high on this list is obvious. Hmm an accounting service that cooked its own books. On the other hand – how often have you paid electricians, plumbers and car mechanics under the table.
It is no wonder that #1 is #1 when you consider a dentist can get $4,000 per implanted ceramic tooth and $1,000+ for a root canal when they are not even real endodontists. I wish I could have people continue paying for my educations and equipment all my life like they do. I can buy a new car for the cost of replacing 4 teeth. How many parts in a new car and how many man-hours and other expenses involved? Duh!
You gotta love the James Bond new offices with one old guy surrounded by 5 young women to pass him instruments. You can’t make this stuff up.
God bless the 5 honest dentists is the US, if there are that many.
Fairly interesting report. Top 5 are surprise for me.
You call that profit? (and yes, I know the difference between profit and net profit). Kind of disappointing for someone that would like to double their money!
I once had a CPA tell me that unless you could make double what the going average stock market was returning, that you should look for another business!
A bit old but still useful the info! Thanks!
Thanks for sharing the data. Would it be possible to get an update for 2012.
I’m actually surprised Dentists appear top on the list. Our overhead expenses are quite high and payroll takes a good chunk as well. I guess other industries have higher cost structures though. I always imagined lawyers would be higher than dentists.
Great Post! I guess commercial cleaning services is not on the list. I try to make sure I price my services right so I can generate a decent profit margin for the company. I achieve that by offering high quality professional commercial cleaning services; My clients are very comfortable with paying a fair price for high quality services. Thanks for the post.
Very interesting article about most profitable small businesses during a recession. But there are some other business to be list in this article.. i.e. Appliance Services, Mobile repairing, home services, etc.