When you weigh up starting a business, it’s crucial to consider how much money you can make.
It’s easy to look at booming sales, big employers and flash suits and think there’s money in any industry, but at the end of the day it all comes down to how profitable a business is. After all, that’s the amount you get to take home.
So which industries rake in the most money after they’ve paid their bills?
According to the International Monetary Fund, the Australian banking system sweeps all others aside as the most profitable in the world, while ABS figures show the mining industry responsible for a whopping 22% of all Australian business profits in 2012.
From those lofty heights you’ve got to look at gambling where the Packer house always wins, and superannuation where 9% of every dollar earned gets sent.
But for specific financial metrics the best research comes out of the US where financial analysis outfit sageworks recently researched which industries had the highest profit margins over the past 12 months.
Of the 27 million odd businesses in the U.S., the research identified the oil and gas industry as the most profitable with an average 24% net profit margin, followed by accounting services which take 21% off the top.
Interestingly health care ranked very highly too with outpatient care and dental businesses in the top seven most profitable industries in the country. It appears real estate agents also catch a hefty commission, making 17% net profit on earnings over the past year.
Given the figures exclude taxes and the US has a lot of economic aspects in common with Australia, these numbers are a pretty good proxy for the potential profitability of local industries.
However just because an industry is creaming it on average, keep in mind that doesn’t necessarily mean your business will make the same amount.
That said, if you’re considering starting up, these big margin areas of business are obviously worth a thought.
Here are a few more to consider for the future...