For many American workers, the American dream involves starting your own business and being your own boss. A record 5.48 million new businesses were launched in 2023, according to US Census Bureau data cited by the Commerce Institute. On average, around 4.7 million businesses are started each year. Unfortunately, about 20% of small businesses fail in the first year, Forbes reported, and about half fail in the first five years.
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The key to starting a successful business is figuring out how to make it profitable. It is also the biggest challenge. It’s easy enough to come up with a small business idea, but much harder to turn it into a money maker. To get there you need a combination of research, planning, networking, vision and expertise.
An entrepreneur blog published earlier this year recommended taking the following steps before starting a business:
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Consider your skills and credentials. This is not necessarily rocket science. For example, if you are a licensed CPA, you are better suited to open an accounting firm than a restaurant.
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Determine your company’s goals. There is a big difference between starting a business as a side gig and launching a full-time business that will provide your primary source of income. With the latter, you have to check a whole bunch of different boxes in terms of market research, planning, budgeting, financing and potential profits.
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Decide if your business will be online only or require a physical location. Physical locations typically require you to secure financing, obtain the proper licenses and permits, and contact local tax authorities and utilities.
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Research your location and what works there. If your business will primarily serve local or regional customers, you must first ensure that there is a demand for your product or service. After that, you need to make sure that the market is not already saturated with similar companies.
Another thing to think about is whether your business aligns with current market needs – meaning providing a product or service that has a clear customer base today and in the future.
Here are seven of the most profitable business ideas for 2024.
Pet Sitting
About 70% of American families have a pet, according to Business News Daily, which means there are plenty of potential customers. You will face virtually no start-up costs with a pet sitting business, so most of your income goes straight to the bottom line.
The job typically involves feeding farm animals, refilling their water bowls, playing with them and walking them. The median wage is around $15-$16 an hour, although you can charge more for overnight jobs.
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Tax benefits
This is a business idea that has a ready market every year. You must have tax preparation experience along with expertise in federal taxes as well as state and local taxes relevant to your location.
This is an ideal way to start a profitable business if you are a licensed CPA and/or tax preparer. Most tax preparers charge anywhere from $250 to $500 or more per returns, according to Intuit.
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Drop shipping
Dropshipping is in high demand among companies that sell goods but do not store them on-site. In this case, companies with e-commerce sites hire third-party dropshippers to fulfill orders.
Because there are low start-up costs, this is a way to start a small business that can turn a profit quickly.
Business consultant
Here is another potentially profitable business idea that requires a certain amount of experience and expertise. Consulting is typically best for seasoned business veterans who have expertise in a particular niche, such as IT, marketing, human resources or real estate. Business consulting firms typically charge around $100 an hour.
You can usually do the work from a home office, which keeps costs down.
Pet grooming and supply store
As previously mentioned, pet owners represent a large customer base – meaning that pet-oriented businesses have the potential to be very profitable. If you want to open a store that sells pet supplies and provides grooming services, you must first research the local market to find out how much demand there is and whether there is any competition.
If you live in a newer community filled with pet lovers—and without a pet store nearby—you’ll have first-mover advantage, allowing you to build a loyal customer base.
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Digital marketing
This is an excellent way to start a profitable business if you have experience in online marketing and a ready network of potential customers. Your typical clients will be small or medium-sized businesses looking to outsource marketing to a third party, Business News Daily reported.
To be successful, you must have experience in SEO, content marketing, pay-per-click advertising, web development or social media management. As with consultants, you won’t face many start-up costs and the job can be done from home.
Franchisee
This requires start-up capital and some expertise in the franchise market. But as Entrepreneur noted, there are numerous benefits to buying a franchise. You will be buying into a proven business model, the market research has already been done for you, and the franchise brand usually provides support to individual franchisees.
In some cases, you can purchase a franchise for as little as $10,000. Franchise opportunities range from restaurants and dessert shops to vacation planners and gyms.
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This article originally appeared on GOBankingRates.com: 7 Most Profitable Small Business Ideas for 2024