What Does It Pay?

Lots of people are happy in their jobs and a stable career. Nice work if you can get it. The lifetime job that our grandparents received for their years of loyalty is now just a reminiscence. Lots of reasons, not enough time and space to address it here.

So for some, out of personal interest or quiet desperation, look to become their own boss and start their own business. Of course, that begs the next question.

"What business should I get into?" I approach the question from several directions. First, don't do what is not currently working. A good guide to what isn't working can be found on Craigslist under the "Business" section. The average Joe loves pizza, but the pizza business does not love the Average Joe. There are plenty of pizza restaurants and equipment for sale on Craigslist. Another common item is screen printing equipment. Small town bars are also in great supply and low demand.

A better guide is looking at profit margins. Scott Shane has an article on Small Biz Trends.
He has a list of the most profitable and least profitable businesses grossing under five million dollars. The data was assembled from five years of recent data.

Source: Sageworks Inc.

Mr. Shane draws a few obvious conclusions from the lists. First, education and advanced training do pay off. The top earning firms involve professional, scientific or technical expertise.

The bottom firms have much lower barriers to entry, and the margins are accordingly lower. Competition keeps the profits down.

Remember, though, these are just averages. So there will be outliers in most every industry.

But then again, maybe we should just follow our hearts and dreams. In the short run, we may just break even.

And in the long run, as economist Lord John Maynard Keynes noted, "we are all dead."