In a profitability analysis of privately-held businesses, Sageworks found that four out of the ten most profitable industries are healthcare-related: from dentists to chiropractors, to outpatient care facilities. This is one reason why technical and trade schools also make it into the top ten. Many of the unemployed over the last few years have returned to school to study a trade and bring a competitive edge to the job market or to explore new career opportunities. And, the medical field is a big driver of this trend – programs for certification as a medical assistant or a medical billing and coding specialist have seen growth in recent years.
The most profitable industries over the last 12 months are highlighted below. Legal services top the list. Accountants, lawyers, and healthcare professionals (dentists, chiropractors, and physicians) remain highly profitable as well, all seeing double-digit profit margins over the last 12 months. Energy related industries such as oil and gas extraction and mining are lucrative industries as well.
Net profit margins for the top ten industries ranged from 10 percent (photography and translation services) to 16 percent (investment and portfolio advisors). Almost all of these industries provide services rather than products, which keeps their overhead costs low, protects profit margins, and tends to be more recession-resistant. (And in some cases, this business model also leads to higher than normal cash balances.) In the medical field, the combination of high-priced, “need-to-have” specialty services with a service business model keeps margins high. Looking forward, if these companies grow beyond their current capacity, their margins will give them the necessary buffer to add employees.
Sageworks, a financial information company, collects and analyzes data on the performance of privately-held companies and provides financial statement analysis software.