While success in business is never guaranteed, some opportunities may have a higher chance of profitability than others. When planning a new business, it’s important to consider industry trends, market demand, operating costs and potential profit margins. To help you find your next endeavor, here are some potentially profitable business ideas you can start in 2023.
Before we begin, it’s important to note that these are merely small business ideas that have the potential to produce high profit margins. Should you choose to start any of these ventures yourself, it will be up to you to determine whether the business is viable in your area, what your business plan and execution will look like and what larger macroeconomic factors might impede your ability to succeed.
- Cupcake Business
If your family and friends rave about your baking skills, this idea is for you. The demand for the cake industry is expected to grow. In 2019, the global cake industry was valued at $42.9 billion, with an expected annual growth rate of 3.3%, according to Grand View Research. As an added bonus, small specialty shops are expected to enjoy most of the profits.
A cupcake business is a viable option for entrepreneurs with few resources. To start this potential home business idea, you only need an oven and basic baking supplies. Once the sales start rolling in, you can grow to larger formats. For example, you could start by selling your cupcakes in a display case at a local shop, then graduate to a food truck and, finally, to a stand-alone brick-and-mortar shop.
Research the laws in your state surrounding the licenses, permits and standards you must follow for your budding bakery business. All told, there are many different laws and regulations to follow when preparing food for the general public. For example, in Virginia, you may need a permit to operate a bakery from your home, and you must follow laws surrounding labeling your cupcakes and maintaining safe manufacturing practices.
- Sports Memorabilia Shop
The sports memorabilia market is currently valued at $26.1 billion. Stunningly, it is expected to reach $227.2 billion in valuation by 2032, per a report from Market Decipher. This could mean big profits year after year for brick-and-mortar sports memorabilia shops. This small business idea involves buying authentic or replica memorabilia and reselling it at higher prices.
You can source memorabilia from wholesalers, auctions, estate sales, ads and even online platforms such as eBay. However, you must ensure any signed memorabilia you purchase is authentic. You may need to consult with experts such as autograph authenticators. As you learn how to authenticate your pieces, you can earn money authenticating memorabilia people bring into your shop.
- Bridal Gowns and Accessories
The bridal industry is growing by 4.4% and is expected to reach a $79.8 billion valuation by 2027. While people buy many retail products online, nearly 85% of brides are still shopping in stores, according to BusinessWire.
Starting a bridal shop comes with a steep, but relatively affordable initial investment of around $250,000. In addition to carrying a range of dresses, your bridal shop should also carry accessories including veils, accessories and bridesmaid dresses. High-touch customer service is also essential for this once-in-a-lifetime purchase.
- Consignment Shop
GlobalData and used clothing retailer thredUP report that the U.S. secondhand market will reach $82 billion by 2026, more than doubling its current value. What’s more, the resale clothing market is expected to grow 16 times faster than the general retail clothing industry. A consignment shop is an attractive option for an entrepreneur who does not have money to invest in inventory. Instead of purchasing inventory to sell, you allow others to display their own inventory, and, in turn, you enjoy some of their profits. Consignment shops can carry a wide variety of used items such as clothing, collectibles, antiques and memorabilia. You can also sell items online on sites such as Poshmark, Mercari and eBay. Your primary expenses will involve forming an LLC or other business entity, renting a storefront, paying for relevant insurance and licenses, procuring inventory, investing in a point-of-sale (POS) system and potentially hiring a staff.
- Food Truck
Enjoying 7.9% yearly growth, the food truck industry is currently valued at $1.4 billion, per IBISWorld. It is an attractive option for entrepreneurs who don’t have the startup capital for a restaurant but want to get started in the industry. And, if you want to open a stand-alone brick-and-mortar restaurant eventually, a food truck is a great way to test different locations and target-audience preferences.
According to the U.S. Chamber of Commerce, a food truck has some hefty regulatory costs in a highly regulated industry. Expect to pay around $55,000 on startup costs such as permits, licenses, setup and a specialized restaurant POS system. To wrap your truck to showcase the type of food you offer, expect to pay up to $5,000. To save on buying and setting up your food truck (which can cost $125,000), consider renting one. Many rental food trucks have equipment included.
- Bed and Breakfast (B&B)
If you own a beautiful, rustic or historic home, this idea may be a great first venture. The B&B industry is currently valued at $2 billion in the United States, per the Bureau of Labor Statistics. Though it experienced a slowdown during the Covid-19 pandemic, its normal growth rate is 3.8% yearly. And, because owners usually live on-site, you can save money on lodging to invest in your business.
In addition to personalized customer service, a picturesque travel experience and home-cooked meals, most B&B guests expect ready access to conveniences such as grocery stores and local attractions. Also, expect to invest in home insurance, a food safety handling permit and even a license to sell alcohol, if applicable. You’ll also need to work with your local planning commission if you plan to turn a traditional home into a B&B business.
- Party Rental Business
The party rental industry is valued at $5.9 billion and is rising by 4.3% annually, per a 2022 report from Research and Markets. A party rental business rents products for parties and other events, such as tables, tents, caterers, sound equipment and stages. It can be a lucrative business with many potential uses, whether it’s a nonprofit fundraiser or a high-end gala.
Despite its earning potential, you will need to invest heavily in equipment before making a profit, then recoup those costs via repeated equipment rentals. As you set up your business’s inventory, you may be able to save money by renting a storage facility, and then market your offerings heavily to let the community know what you can rent out. However, you’ll save more in the long run if you establish a brick-and-mortar shop as soon as possible to gain brand credibility.
- Sewing and Alterations Shop
Currently, the tailoring and alterations market is valued at $9.4 billion and is forecasted to grow 4.7% year over year, according to a report from Polaris Market Research.
The beauty of this type of business is that you can grow it as you grow your skill set. For example, you can start by sewing simple hems and replacing buttons, then expand your business to dressmaking and design as you build up your knowledge and experience.
Once you can alter or customize high-end garments such as tuxedos and gowns, you may have the budget to set up a brick-and-mortar shop.
But, until then, it’s perfectly respectable to start your shop in a clean, smoke- and pet-free space in your home. From there, slowly invest in a commercial-grade sewing machine, a selection of fabrics, backup equipment and a POS system. Plan to spend anywhere from $150 for an entry-level sewing machine to $10,000 or more for a top-of-the-line model.
- Gently Used Maternity Clothing Shop
The maternity wear industry was valued at $12.2 billion in 2021; by 2028, it is projected to grow to $16.5 billion, with a 4.4% year-over-year increase, according to Research and Markets. Per the Bureau of Labor Statistics, the U.S. workforce is nearly 57% female, which contributes to a demand for formal, business women’s maternity attire.
After pregnancy, many women look for ways to pass maternity clothing on to other women who may benefit from them. You can help them by opening a shop for gently used maternity attire and other pregnancy supplies.
To start your used maternity clothing shop, choose your business structure and make it legally official. Then, apply for a seller’s permit. Finally, seek inventory from social media, consignment shops and thrift stores. Also, advertise in your community that you buy used maternity clothing. Finally, sell your clothing for more than their purchase price.
- Cleaning Service
Starting a cleaning business can earn you a slice of a profitable industry expected to nearly double to $14.6 billion by 2030, according to Research and Markets. To get started, you’ll need to determine whether you’ll offer residential, commercial or both services. From there, you’ll need to form an LLC and obtain a business license and relevant insurance. You can kick off your company as a solopreneur armed with basic cleaning supplies, then scale your team and equipment as your business grows.
- Virtual Assistant
As of September 2023, virtual freelance assistants in the United States earn an average of $33.84 per hour, with hourly wages climbing all the way to $82.21, according to ZipRecruiter. Whether you seek a high-profit side hustle or want to turn it into a full-time gig, becoming a virtual assistant requires minimal upfront investment, mostly in everyday technology and software you may already have. You can start by applying for positions on popular job networking sites, then build your business by word-of-mouth and your own small business website.
- Social Media Management
With an estimated 4.9 billion people using social media worldwide for an average of 145 minutes a day, it’s no surprise that 77% of businesses are leveraging these platforms as a key marketing tool. If you have skills and experience in digital writing, editing and marketing, consider starting your own social media marketing company. Small businesses with limited time, resources or budget may outsource their social media efforts to help them drive traffic, generate leads, increase brand awareness and even sell products directly. To get started, you need a computer with internet access and at least one of the leading social media management tools to help you run your business more effectively.
- Accounting and Bookkeeping
According to the Bureau of Labor Statistics, the average accountant and auditor earns $78,000 per year, with the field growing by 4% annually. Accounting businesses can charge clients anywhere from the mid-$30s to more than $400 per hour, depending on the accountant’s expertise, experience and the level of complexity involved. You’ll need at least a bachelor’s degree in accounting to help clients with tasks such as tax return preparation, preparing financial statements and providing financial analysis and advice.
If you lack an accounting degree, you can opt for a bookkeeping business, which doesn’t require any particular certification. As opposed to accounting, bookkeeping focuses on tracking financial transactions such as invoices, bill payments and payroll regularly, often with the help of online bookkeeping services.
Starting a consulting business is a great way to tap into your years of experience and expertise in a given field. You can earn up to $300 per hour sharing your knowledge and helping other businesses grow, either virtually or with an investment in office space and equipment. Common fields include public relations and media, career growth, accounting and cybersecurity consulting.
For this list of some of the most profitable business ideas, we looked for businesses that belong to currently profitable and growing industries. However, as you decide on the most lucrative business for you, look to your target market to understand their preferences and needs. And we must stress that under no circumstances are these businesses guaranteed to draw a profit. Any entrepreneurial venture requires strategy and execution to succeed. Any number of factors could turn a potentially profitable business into a failure, including poor management, lack of communication amongst team members and external economic factors. What may be profitable in one location may not be profitable in another. In the end, only your customers can tell you where they are willing to spend their money.