The 5 Most Profitable U.S Industries to Start a Business in 2021
For entrepreneurs to start a business and gain profits, it would be wise to research which industries are the most profitable. But selecting the perfect industry brings no guarantee, seeing that 90% of startups fail. According to research, 21.5% of startups fail in the first year, 30% in the second year, 50% in the fifth year, and 70% in their 10th year. But despite this, entrepreneurs will still follow their aspirations. Once they have found the perfect industry, they could start forming the business. They could even use online business incorporation services to assist with this, as detailed by Incorporation Rocket. This article will list the five most profitable US industries to guide entrepreneurs.
- Software
As e-Commerce and online services enter the mainstream, online tools, such as software, have been in demand to assist businesses in navigating, developing and delivering the offered products and/or services. Industries such as the financial industry, healthcare industry and manufacturing industry, have customized software. This has been done because of the shift from analog systems of production to digital and mechanized systems. The software industry, since 2016, by 7.8%. The software publishing industry in the US is projected to be $396.7 billion with $115.8 billion in profits to be generated. The investment in technology, such as video games, computers and software programs, has fueled this growth. Internet-based businesses have also fueled this growth, which has required customized software to support their services.
- Insurance
The insurance industry has boomed in 2021 due to accidents, natural disasters, financial loss and, most significantly, the COVID-19 pandemic. Insurance in the US is sold in multiple forms, such as life insurance, health insurance, property or casualty insurance, and fraternal insurance. Due to the pandemic and 49 out of the 50 states requiring all vehicles being driven to have active insurance policies, insurance policies of all kinds are in demand all year-round. In 2019, the US recorded having 5,965 insurance companies operating in the country. These insurance companies offer policies to insure health, vehicles, homes, and travel. Due to the pandemic, general health has been at higher risk since 2020, which poses an opportunity for aspiring health insurance businesses.
- Healthcare
The COVID-19 pandemic, which had overwhelmed the healthcare industry in the beginning, had seen a drastic surge in revenues. The US’ healthcare industry accounts for 17.8% of the country’s revenue and is partially funded by the government. Policy Advice has projected that the US healthcare industry will increase to $808 billion by 2021. Seeing that the industry is extremely lucrative, it has significantly high barriers regarding entry. Aspiring healthcare professionals need to complete a four-year undergraduate degree, a further four years of medical school, and from three to seven years in a residency program. Besides this, the competition in the healthcare industry is unmatched, seeing that 784,626 healthcare companies exist in the country causing industry entry to be difficult.
- Legal Services
This industry offers services which are indispensable for both business and individuals. Lawyers, attorneys, and law firms offer services which cover constitutional law, corporate law, criminal law, family law, property and intellectual property law, employment and union law, and personal injury law. This leads to the fact that law professionals are always in demand. The US legal services industry’s market value in 2021 is $319.7 billion, which has made it the most profitable business in the US. Similarly to the healthcare industry, the high profit industry has significantly high barriers regarding entry. Attorneys would need an undergraduate degree, they would need to attend law school, and then pass the bar exam of one of the states. Attorneys are also known to specialize in a specific field of the law, which increases the demand for different types of attorneys.
- Accounting
For businesses to run smoothly, many use at least one accounting method, to ensure that their daily operations run smoothly and to calculate taxes. Many businesses choose to outsource accounting and finance professionals and/or firms for their business. Therefore, the accounting industry is always in demand and continues to grow as new businesses start. The US’ four biggest accounting firms, which are Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG, had a combined revenue of $157 billion in 2020. $107.6 billion has been forecasted as the revenue earned by accounting businesses in 2021. The industry, which has a high level of competition, also has significantly high barriers regarding entry. Businesses only hire accounting firms which are well-known and reliable.
The bottom line
Ultimately, dominating industries like healthcare, technology, finance, and law will continue to dominate the stock market and the Fortune 500-level economy. For entrepreneurs to form profitable businesses, they would need to capitalize on a market need while having a unique idea and approach.