Many entrepreneurs are looking for high-revenue businesses where the chances of turning a profit are high. When I wrote Tiny Business, Big Money, I analyzed Census data to determine the niches where microbusinesses with up to four employees have the most money left over after making payroll. Payroll is the biggest cost for many businesses, and this data offers an idea of how much is left to cover other costs, like real estate or energy.
Although these niches are not going to be everyone’s cup of tea, the results are fascinating, nonetheless.
Here are the top 10 categories, based on those that had the most money left over after making payroll. Keep in mind this data is only for businesses with 4 employees or fewer. I didn’t know it was even possible to run some of these types of businesses with such small teams, but apparently, there are many entrepreneurs who are pulling it off.
1. Casinos/gambling cruises/riverboat casinos (NAICS Code 73210): For a variety of reasons, this industry won’t appeal to everyone, but with average receipts per firm of $28.1 million, an average payroll per firm of $316, 458 and $27.8 million left over after making payroll, these tiny businesses generate way more revenue on average, after payroll than any other type of business.
2. Creamery butter manufacturing (NAICS Code 31152): Who knew there was so much money to be made in this niche, which includes both butter and ghee manufacturing. Average receipts per firm were $26.3 million, with an average payroll of $849,538 and $25.4 million remaining after making payroll, thanks to the heavy use of automation in this field. Is there an artisanal trend in the making here?
3. Ethanol and grain alcohol manufacturing (NAICS code 325193): With $10.4 million in annual revenue, on average payroll of $172,917 per firm and $10.2 million left over after making payroll, this is a promising niche for small manufacturers. Grand View Research predicts that the global ethanol market size will see a compound annual growth rate of nearly 5% from 2020 to 2027.
4. General medical and surgical hospitals (NAICS code 622110): While this niche requires significant education, there are many opportunities for providers with a unique, patient-friendly approach in this area, which includes providers of both diagnostics and treatment. This category includes children’s hospitals, general medical and surgical hospitals, and osteopathic hospitals. With $8.9 million in revenue, on average, and payroll of $2.7 million, they have $6.7 million left over after payroll, on average.
5. Fossil fuel electric power generation (NAICS code 221112): These are small energy companies and electric coops. The long-term potential of this niche remains to be seen, given that the world is starting to transition away from fossil fuel, in favor of renewables, and many people are concerned about climate change. At the moment, however, the average firm has average receipts of about $9.4 million, an average payroll of $202,346 and about $9.2 million left when you subtract average receipts from average payroll.
6. Flavoring syrup and concentrate manufacturing (NAICS code 311930). One of the hottest foodie trends is flavored products, like flavored water, and this industry is the one that makes the flavorings. The average business brings in $7 million in annual revenue, has a payroll of $84,552, and has $6.9 million left over after payroll.
7. Hospitals (NAICS code 622). This code includes both general hospitals and psychiatric and substance abuse hospitals. For professionals in the field, going independent could be a way to make a difference. These hospitals bring in $8.9 million on average with an average payroll of $2.3 million and $6.7 million left after making payroll.
8. Wet corn milling (NAICS code 311221): This is the industry that makes corn sweeteners such as glucose, corn oil and starch. This field may be hard to enter as an entrepreneur if you aren’t already involved in it, but it can be lucrative, with the average receipts per firm at $6.5million, the average payroll per firm of $80,545 and $6.4 million left over after making payroll, on average.
9. Coal and other mineral and ore merchant wholesalers (NAICS code 423520): These are wholesalers who sell things like metal ores, Fuller’s earth and certain minerals. While this niche won’t appeal to those who are trying to get away from fossil fuels, for those who are involved, the average firm brings in $6.5 million in annual revenue, the average payroll per firm is $145,342, and the average left over is about $6.4 million.
10. Casino hotels (NAICS code 721120: If you have dreams of living in Las Vegas—a hotbed of entrepreneurship—this could be a niche that interests you. It includes both lodgings and freestanding table games and slot machines. The average revenue per firm is $7 million with average payroll at $1.2 million and the money left over after payroll averaging $5.8 million.
Money isn’t everything—it’s no fun running a business that doesn’t reflect your personal values—but as this data shows, there are many opportunities to build a thriving business in niches you might not have considered. When it comes to identifying potentially profitable businesses, the numbers tell the story, and if you’re looking for ideas, checking out the data the U.S. Small Business Administration Office of Advocacy and U.S. Census Bureau can be a great place to start.
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