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Some people think of starting their own business in order to do what they like doing: like cooking. It's a good idea if you're on quest for happiness, but not so much if your're looking for money. Forbes.com published a list of the most renumerative industries, that it really pays to launch your own business in.
American journalists in cooperation with Sageworks, a company that specializes in small and medium companies research, analised financial statements for nearly 100 000 private companies with annual income below $10 million.
The sample group in each industry consisted of at least fifty companies. The results are reliable and informative. In some industries entrepreneurs record average pretax profit of 25 percent. In some others they usually record 7 percent loss.
Here is the list of 10 most profitable industries with their average pretax marigin. As you can guess it's swarming with services.
1. Accounting Services: 25 percent
Bookkeeping, designing accounting systems, preparing payrolls and financial statements. Boredom. But gosh, how profitable it is. There's a constant demant whatever economy situation. Overheads are low and marketing spendings minute. A couple of satisfied clients to start with is all you need.
2. Legal Services: 21.5 percent
The situation here is similar to that in bean-counting business. The industry may be a little bit more of excitement, but at the same time it's more vulnerable to economic situation fluctuations. The overheads are comparably low. Unfortunately every now and then you've got to include in your representative spendings a good dinner in an expensive restaurant.
3. Dental services: 20.9 percent
The biggest advantage here is one dentist can serve several customers at the same time with the right number of chairs provided. You can count on cheap trainee support. In the States most of the clients pay out of pocket, so there's no need to deal with insurance providers.
4. Specialized Design Services: 17.6 percent
This includes: interior, industrial and graphic design. Profitablity of the industry has increased with IT revolution. Whole designer's office is in his laptop. The biggest overhead is software. Still the futher east you go the wilder it gets.
5. Specialized Health Services: 17.5 percent
Specialists: eg. paediatricians, pulmonologists, oculists earn more than GPs. Why is that? The answer is they have more pricing power since they are able to circumvent the insurance system.
6. Outpatient Care Centers: 16.9 percent
This hedgehodge industry includes spas, family planning centers as well as rehabilitation and dialysis centers. In private sector Outpatient Care services yield more income than private hospitals.
7. Insurance Services: 15.9 percent
It's the industry where both insurance brokers and claims adjustments agents get their money from. It comes seventh in the list and it's only third industry outside the realm of medical services.
8. GP offices: 15.8 percent
People fall ill no matter what economic situation. And that's why physicians do well wherever they are allowed to sell their services. Nevertheless, 'Forbes' stresses the fact that US small entrepreneurs in this industry have lost their pricing power at the hands of huge insurance companies. Still they are far better off than for example Polish docs in their struggle with National Health Fund.
9. Medical Laboratories: 15.3 percent
Rate of return here is affected by substantial initial investment. However, as soon as specialistic machinery is installed you can do as many tests and analyses as you like, with minute cost per test.
10. Financial Intermediation: 13.6 percent
Sageworks analysts have included here small banks and credit unions. Money for money's sake has always been lucrative business. Unfortunately out of the ten this one is the most vulnerable to external factors. With inevitable financial crisis at hand, small companies in this industries may be facing hard times.
It seems public health care is not only inefficient but also keeps potential entrepreneurs away from dependable source of income. Is there really no way to provide medical care for the poorest without taking away from businessmen opportunity to get richer, and from better off patients the access to service quallity they got used to by the free market.