One of our office-space tenants who follows our blogs, asked us to do a blog series about home-based businesses because her husband took early retirement and wanted to keep busy at home. We want to first talk about the most profitable home-based business and what it takes to start one. Other topics in the series of posts will include: home-based retail (online); at-home wholesale and distributions businesses; and running a consulting business from home.
Let’s start with talking about what are the most profitable and easy-to-start home-based businesses. Not surprisingly, the most profitable home-based businesses do not require a great deal of equipment, holding an inventory of goods or even renting office space. But you may want to pull out your calculator (or abacus) for the very top profitable home-based businesses. Yes, you guessed it, the most profitable home-based businesses you can start involve dealing with other people’s money.
Forbes, Entrepreneur, Fortune and Insider Monkey all seem to say that Accounting, Tax Preparation, Bookkeeping and Payroll services are the most profitable industries. This is not surprising because a few of those websites got their data from the financial information company SageWorks (www.sageworks.com) that provides risk management, financial analysis and business valuation solutions to accounting firms and financial entities.
SageWorks not only lists the 15 most profitable Industries, but also the most profitable small-business industries. In the chart below from SageWorks, you will notice that accounting led the pack in delivering the best profit margins, but service-based businesses in health care, consulting and real estate dominate the rest of their list.
The answer to why the service industries are always at the top of such lists is that these industries do not require large overheads, and their equipment costs are fairly low – so therefore the start-up costs are also very low. These factors mean that they also do not need to carry the burden of business debt.
Even though you can run many of these types of businesses from your home, you may not want your home address as your business address. In the past, many of these businesses were run from home and they used a Post Office Box as their business address. Today, many of those same businesses now use virtual office address at an office business centre with a professional and prestigious address. A business can therefore have a mail service for as low as $30 per month. That mail service forwards clients’ mail to whatever address they want.