Sageworks Inc., a financial-information company, analyzed financial statements from thousands of privately held companies to find out which industries have been the most profitable in the past 12 months. On a pretax basis, the most profitable were primarily services-based businesses. And if you’re looking for a career, you might do well to heed Benjamin Franklin’s observation that the only sure things in life are death and taxes: both funeral-home services and accounting make the list of the 20 most-profitable industries in the past 12 months.
Topping the list, however, is “other financial investment activities,” with a 16.26% pretax net profit margin, according to the Sageworks data (see chart). This category excludes securities dealers and commodity contracts dealers, but includes other sellers of financial contracts and could include portfolio managers and those who provide trust, fiduciary, and custody services.
Other top industries include offices of dentists, accounting/bookkeeping and payroll services, legal services, office administrative services, technical and trade schools, and other health practitioners, which can include chiropractors, physical therapists, and podiatrists. Indeed, health-services industries are frequently found on the top 20 list. In addition to dentists and therapists, other industries ranking near the top of the profitability list include outpatient care centers and death-care services, or funeral homes.
Sageworks CEO Brian Hamilton says he believes health care, technology companies, and information companies will continue to grow, based on macro trends affecting the U.S. economy. And despite the current 9.1% unemployment rate, Hamilton sees business owners adding workers as demand improves. “I think that over the long run, as you grow revenue, you’re going to hire people,” he says. “I don’t believe that we will be permanently stuck at an unemployment rate that we all find unacceptable.”
Mary Ellen Biery is a financial writer at Sageworks Inc.