Many startups live and die by their margins. The truest measure of profitability, it’s the data point that shows how much of each dollar earned is actually bottom-line income.
Margins vary widely by industry, but a study by market research firm Kentley Insights of 61 small business industries, breaks down average profitability data in a number of categories, including net income margin. And leading the field, with nearly double the margin of its closest rival, is the self-storage space.
Boasting margins of nearly 46 percent, the category has seen annual growth of about 11 percent over the past three years, and expected revenue gains this year of $1 billion over 2025, with a forecast of $36.6 billion. The high margin comes because of unusually low ongoing labor and inventory costs once a facility is built, Kentley wrote.
While the margins are high in this field, there is a caveat. Just about 44 percent of the businesses are profitable, according to Kentley, the lowest of all rankings. That’s due in part to the density of these companies in some areas and once-thriving areas becoming less popular with residents.
Real estate appraisal showed the second biggest margins in the research report, coming in at 25 percent. While this field has a much more modest annual growth rate (of just 3 percent), the companies in it tend to have better luck when it comes to profitability, with about 89 percent reporting they are in the black.
Businesses specializing in paralegal, patent, processing and notary services are in a very similar position, with an about 25 percent margin, ranking third on the list, and a more than 85 percent profitability rate. Annual growth in that category is a bit steadier, though, averaging about 5 percent over the past three years, with an expected $9.5 billion in revenue this year.
Other startup ideas with high net income margins included: