Studies show that half of all businesses fail in the first five years, and starting a business isn’t for the faint at heart. So how do you know if starting a new business is the right path for you? What things should you consider before leaping into entrepreneurship? And what are the most profitable small businesses ideas to start? Read on to discover the top 10 most successful businesses to start this year.
What should you consider before starting a business?
Embarking on the journey to become a business owner can be exciting. But it can also be stressful. Some new business owners are surprised by what it takes to start a successful business. Before quitting your day job, do your research. This can help determine if you have a profitable business idea that you can turn into a successful small business.
Before starting a new business, here’s what to consider:
Determine your financial situation
Your financial situation will impact whether you can start a new business. If you are the sole breadwinner in your family or have a lot of debt, starting a business will be a large risk for your family. Decide if you can survive without a salary while you grow your business. If not, you may consider building your business as a side hustle while keeping your current job.
You will also want to look at your finances. Do you have enough savings to cover startup costs and pay your bills while you build up your business? According to the SBA, startup costs are estimated from $2,000 to $5,000 for a home-based business. And as a general rule, you should have enough in savings to cover six months of living expenses. Make a list of your expenses and project your sales for the first year to determine how profitable your small business can realistically be.
Research the industry
Conduct research for the industry you want to work in. Understanding the current state of the industry can help you see where you fit into the mix. Is there something in the industry that isn’t meeting customers’ needs? This can help spark a unique business idea.
To perform this competitor research, you can do a variety of things. Do a Google search to see what businesses appear at the top of the search results. Check out competitors’ websites, social media profiles, and annual reports (if they are a corporation). Take a look at what products or services they offer, the size of the companies, and how the brands represent themselves. Look for online reviews, such as on Google Business profiles, to see what customers are saying about your competition. Is there an underserved area you can capitalize on? Dun & Bradstreet has a great company and industry search tool that can help you learn more about top companies in your industry.
Top 10 most successful businesses to start
Need some ideas to spark your new business venture? These top 10 most successful businesses to start in 2023 are a good place to start. While income can range, we’ve also provided an average salary to expect based on data from sites like PayScale, ZipRecruiter, and more.
1. Ecommerce
Worldwide retail ecommerce sales are predicted to reach $6.169 trillion by the year 2023, according to eMarketer. Although brick-and-mortar retail sales have struggled through the pandemic, online businesses have grown. With those trends, an ecommerce business may be a great business idea for you.
Ecommerce is broad, so you will want to think more about what you want to sell and how you want to sell it. Some ecommerce business models include:
Print on-demand
If you have an artistic background, a print-on-demand (POD) business may be right for you. POD businesses are great for those who don’t want to create a physical product or manage inventory. There are wholesale printers that have a variety of products — from T-shirts to mugs to canvases — that you can have your designs printed on for a fee.
Whether you sell your products on a third-party platform, such as Printful, Zazzle, or CafePress, or through your own website, POD services make it easy for anyone to start and grow a new business. Whichever platform you choose, the way it works is basically the same. You create your designs, add them to a site, choose your products to print on, and the POD service fulfills the order. POD keeps startup costs to a minimum and is a great business opportunity for creative types.
Drop shipping
Drop shipping is a similar ecommerce model to print on demand but allows for more variety of products. With this ecommerce model, you work with wholesalers to choose products for your ecommerce store, and they ship them to your customers.
A drop shipping business is a great business to start for those who have the basic knowledge to build a website and have the creativity and skills to market products. Just like POD, overhead costs are low, so nearly anyone can start an ecommerce business.
Amazon (FBA)
Fulfillment by Amazon (FBA) works similarly to drop shipping, but instead of having your own website, you sell on Amazon. While you can sell products from wholesalers, Amazon also allows stores to sell their own products on their website. Through their FBA service, sellers ship their products to Amazon, list them on the site, and Amazon does the rest.
Keep in mind, though, that competition is high in some categories. And many other Amazon sellers may be selling the exact same product as you. There’s a bit of a learning curve to getting sales and beating your competition. Writing optimized product listings through SEO, setting the right price, and choosing the right products are all ways to set yourself apart and succeed on Amazon. (And if you need help with bookkeeping for Amazon sellers, there’s always Bench!)
Average Salary: $101,464
2. Virtual assistant
Starting a virtual assistant business is great if you have some administrative experience. The increase in internet users—by 257 million from July 2020 to July 2021—and an increase in online transactions has caused an increase in demand for these jobs. In fact, the virtual assistant market is poised to grow $4.12 million from 2021 to 2028.
Virtual assistants provide a variety of administrative services to businesses and individuals — all from the comfort of their own homes. Although the tasks can vary, many virtual assistants help with answering phone calls, social media posting, managing bookkeeping, transcribing documents, data entry, coordinating travel arrangements, and more.
If you’re detail-oriented and organized, this type of business may be a great fit for you. To get started, you can find VA jobs on sites like Upwork, VANetworking, and Zirtual. How profitable your business is will depend on the services offered, your experience and skills, and how much you charge.
Average Salary: $34,751
3. Social media management
Managing social media postings across several channels can be a large undertaking. Many businesses don’t have a large enough budget to hire someone in-house, so they may hire an outside social media manager to oversee their social profiles for them. A whole 55% of the global population uses social media, which is 4.33 billion people. Businesses need help reaching the right people on these networks, so entrepreneurs have an opportunity to grow a profitable small business by helping them.
If you’re a creative writer and have experience creating posts for businesses, starting a social media management business may be right for you. Even if you don’t have experience, you can take a course or develop your skills by volunteering for a non-profit organization. And tools like Canva make it easy for novice designers to create professional-looking images for social media posts.
Average Salary: $49,509
4. Cleaning service
If you love to clean and organize, starting a cleaning business could be a great opportunity. With more people working from home, many have struggled to manage work, childcare, and keeping their homes clean. The global cleaning service market is expected to grow to $88.9 billion by 2025 (from $60.25 billion in 2019). This has caused a high demand for home cleaning services.
While most residential cleaners need to purchase their own cleaning supplies, the startup costs can be low for basic cleaning tasks or organizing. This is especially true if you want to start solo and won’t need to hire employees.
Average Salary: $55,949
5. Business consulting
You may want to help businesses grow by offering consulting services. A consultant provides expertise to businesses to meet certain goals. There are many types of consulting businesses, but a consultant usually specializes in one area of a business. Some popular consulting businesses deliver digital marketing services, financial guidance, or business strategy. They provide advice and training, or they may even do more hands-on work.
If you like to help others, starting a business as a consultant may be the perfect opportunity for you. Business consulting is a $250 billion industry, which means it’s a great industry to start a profitable small business.
Learn more: How to Start a Consulting Business (12 Steps)
Average Salary: $75,990
6. Copywriting
A copywriting business is ideal for those who love to write and have a knack for grammar. Anyone can start a copywriting business with very little startup costs. Many copywriters start as freelancers while keeping a full-time job as they build their business.
Although the writing industry growth is about average (a 9% increase is expected between 2020 and 2030), businesses of all sizes will always need copywriters to help them with marketing. There are many different reasons businesses employ copywriters—they can write copy for ads, brochures, sales materials, websites, blogs, social media, and more. There’s a high demand for skilled copywriters to support content marketing across businesses in all industries.
Average Salary: $55,000 for freelancers
7. Graphic design
A graphic design business is another low-entry business opportunity. If you have design skills and know how to use design software, you can start a design business of your own. Graphic designers are outsourced by companies to create logos, website design, business presentations, sales collateral, and more. Graphic design services can also be used for web and app development.
You can also use your design skills to create physical products. Using print-on-demand services, you can place your designs on a variety of products. Or you can make T-shirts, planners, or even create your own font. You can sell the physical product or allow customers to purchase a digital download they can print themselves.
About 90% of the graphic design industry is made up of freelancers. So if you have design skills, starting a graphic design business is a no-brainer.
Average Salary: $66,500
8. Real estate brokers
The housing market has been booming over the last few years, which has kept real estate agents and brokers busy. Many homeowners are looking for larger spaces as they spend more time at home. With mortgage rates remaining low and home sale prices expected to continue to increase by 2.9% in 2022, real estate is a good market to be in. Working in real estate can be very lucrative, even for those starting a side business. While real estate agents work for other companies, real estate brokers can start their own businesses.
Real estate brokers are agents who have additional training and a broker license. Brokers can work on their own or even hire other real estate agents to work for them. A broker works with home buyers and sellers to find properties, negotiate on behalf of their clients, prepare offers, and assist their clients with closing the sale. Real estate brokers get paid by taking commissions on the sale of a home, which is based on a percentage of the sale price. Depending on your local market, commissions can be substantial for the sale of one home.
Average Salary: $100,514
9. Online courses
Selling online courses is a great business idea and has endless possibilities. In fact, the U.S. e-learning market is projected to grow between 2020 and 2024 by $12.81 billion. Put your knowledge in a particular area to good use by teaching others. You can sell courses on your own ecommerce website or create a course on a popular course platform like Coursera or Thinkific.
Businesses have found success selling courses on a variety of topics, including digital marketing, learning a new language, developing leadership skills, or personal training. Hobbyists will pay for courses to learn how to bake, improve their photography, or learn how to paint. If you have a passion and knowledge for something, there’s a good chance others will pay to learn from you. You can even develop a series of courses to keep your customers coming back for continued learning.
Average Salary: Varies, $12,000-$60,000
10. Pet services
For those who love our furry friends, starting a pet service business may sound like a dream job. And with an increase in pet ownership during the pandemic, the demand has risen for a variety of pet services. In fact, in 2020 alone, $103.6 billion was spent on pets in the U.S, and that number continues to grow.
Depending on your skill set and desires, you can start a business grooming pets, pet sitting, or walking dogs. While a dog walking business has almost no expenses and doesn’t require experience, a pet groomer will need at least some experience and will have some startup costs. Whichever pet service you choose, you can start your business on the side or full time.
Average Salary: Varies depending on services; pet sitters make about $28,037 and pet shop owners make $49,174 on average
How to start a profitable business
If you’ve made it this far, you’ve likely decided that entrepreneurship is a great fit for you. And now that you’ve considered some business ideas, the next step is to walk through the steps to start your business. Below we’ll walk you through the most important steps, but you should also read “How to Start a Business (12 Steps)” for a more in-depth guide.
1. Create a business plan
A business plan will create a roadmap for how your business operates. It will guide you as you make decisions about your business, ensuring every decision aligns with your core values and messaging. A business plan is also required if you need to apply for a business loan.
2. Finance your business
There’s a lot that goes into business finances. Projecting your business income and expenses will help you establish how much you need to start your business and what it takes to maintain it. Some businesses require a lot of capital before you can even open your doors, while other home-based businesses can be started with minimal expenses.
Depending on your financial situation and your startup costs, you may need to look at financing options. Some funding options to consider are getting a loan, bringing on investors, or running a crowdfunding campaign.
3. Choose a business structure and register your business
Once you have a business idea and a name, decide which business structure your business will be. If you want to protect your business and gain liability protection, your best options are:
- Limited liability company (LLC)
- Partnership
- Corporation
Once you’ve decided on a business structure, you’ll need to register your business with the federal, state, and sometimes local governments. You will also need to obtain a federal tax ID and sometimes state and local tax IDs as well. Depending on your business, permits and licenses may be required as well.
4. Open bank accounts and set up bookkeeping
It’s important to keep your business income and expenses separate from your personal finances. Setting up business bank accounts will allow you to manage the money coming in and out of your business. At the minimum, you should set up a checking account for your business. You may also want to open a credit card to pay for expenses while earning rewards.
Along with setting up bank accounts, you’ll need to keep records of all business transactions. Accounting software will help organize all your income and help keep track of expenses. This can be helpful when preparing your taxes and allows you to easily create financial statements. For corporations, most states require businesses to file an annual report. Keeping accurate records is necessary to create these reports. You may want to hire a bookkeeper to help you manage your business finances.
5. Promote your business
As you begin your business, you want to make sure customers know about you. Businesses use advertising, promotions, public relations, and other marketing to get the word out about their new business. For many businesses, word-of-mouth and referrals are an integral part of growing their customer base.
As your business grows, you may need to continue marketing your business through various channels. Whether you use traditional print advertising or digital marketing or a mix of both, marketing will help grow brand awareness and sales.
How Bench can help with your new business
Keeping accurate and up-to-date financials will help you track your business income and expenses, which can lead to your business’s success. This is where Bench comes in. As North America’s largest professional bookkeeping service for small businesses, we help businesses of all types make smart financial decisions to grow. Find out how we can help you.
Hopefully, now you’ve decided on a business idea and are ready to begin your entrepreneurial journey. Set your new business up for financial success by hiring Bench to manage your bookkeeping. Start your free trial today!
