7 Most Profitable Small Business Ideas for 2024

For many U.S. 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 U.S. Census Bureau data cited by the Commerce Institute. On average, about 4.7 million businesses are started each year. Unfortunately, roughly 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 launching a successful business is figuring out how to make it profitable. That’s also the biggest challenge. It’s easy enough to come up with a small business idea, but much harder to turn it into moneymaker. To get there, you’ll need a combination of research, planning, networking, vision and expertise.

An Entrepreneur blog published earlier this year recommended taking the following steps before launching a business:

1. Consider your skill set and credentials. This isn’t necessarily rocket science. If you’re a licensed CPA, for example, you are better suited to open an accounting firm than a restaurant.

2. Determine your business’s goals. There’s a big difference between starting a business as a side gig and launching a full-time enterprise that will provide your main source of income. With the latter, you need to check a whole bunch of different boxes in terms of market research, planning, budgeting, financing and potential profits.

3. Decide if your business will be online-only or require a physical location. Physical locations typically require that you secure financing, get the proper licenses and permits, and contact local tax authorities and utilities.

4. Research your location and what will work there. If your business will mainly serve local or regional clients, you first need to make sure there’s demand for your product or service. After that, you need to make sure the market isn’t already saturated with similar businesses.

Another thing to think about is whether your business aligns with current market needs — which means providing a product or service that has a ready customer base today and on into the future.

Here are seven of the most profitable business ideas for 2024.

Pet Sitting

Around 70% of U.S. families have a pet, according to Business News Daily, which means there are plenty of potential customers. You’ll face virtually no startup costs with a pet-sitting business, so most of your income will go directly to the bottom line.

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The job typically involves feeding household pets, refilling their water bowls, playing with them and walking them. Median pay is around $15-$16 an hour, though you can charge more for overnight jobs.

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Tax Services

This is a business idea that has a ready market every year. You’ll need to have tax prep experience along with expertise in federal taxes as well as state and local taxes relevant to your location.

This is an ideal way to launch 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 return, according to Intuit.

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Dropshipping

Dropshipping is in high demand among companies that sell goods but don’t store them on-site. In this case, companies with e-commerce sites hire third-party dropshippers to fulfill orders.

Because there are low startup costs, this is a way to start a small business that can turn a profit in a hurry.

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 low.

Pet Grooming and Supplies Shop

As mentioned earlier, pet owners represent a major customer base — which means pet-oriented businesses have the potential to be very profitable. If you want to open a shop that sells pet supplies and provides grooming services, you first need to 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 full of pet lovers — and without a pet shop nearby — you will get first-mover advantage that allows you to build a loyal clientele.

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Digital Marketing

This is an excellent way to launch a profitable business if you have experience in online marketing and a ready network of potential clients. Your typical customers will be small or midsize companies that want to outsource marketing to a third party, Business News Daily reported.

To be successful, you’ll need experience in SEO, content marketing, pay-per-click advertising, web development or social media management. As with consultants, you won’t face a lot of startup costs and the job can be done from home.

Franchisee

This requires startup capital and a certain amount of expertise in the franchise’s market. But as Enterpreneur noted, there are numerous benefits to purchasing a franchise. You’ll be buying into a proven business model, the market research is already 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 options range from restaurants and dessert shops to vacation planners and fitness centers.

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