What are business lines or most profitable projects? What type of business to create to quickly generate a good return? What trade is more profitable?
First, what is a profitable business?
Create a business profitable is to create a company that can generate profits.
Can be distinguished:
- the economic profitability: it’s net income reported to the amount of equity and debt.
- financial profitability: it’s net income reported to the amount invested (equity).
- profitability in the short term or long term : some activities are starting to generate profitability several years after their creation.
- profitability can also be assessed on the basis of other criteria : compared to the time spent on a project, based on the valuation of the shares of the company, etc.
The concept of profitability also evokes a bet on the future: we considers that a project or that an activity will be profitable if potential it contains happens actually. Profitability also depends the vision of the company, and head of its ability to anticipate risks.
Create a profitable business in 2018: the sectors.
Create a profitable business, Yes, but in what area?
Some industries are traditionally considered more profitable than others. Here they are:
- Luxury: this is an industry which is characterized by strong margins. Whether it’s cosmetics, perfumes, fashion accessories, from craft to art or high fashion, rates of return are often excellent. But it is a very demanding and dominated business by the big brands.
- Intellectual works: produce works of art, works by copyright law, software or applications can be very lucrative. Still need to have talent, be patient and manage to break through…
- Finance: is one among the most lucrative business sector: we think of the management of investment funds. Of many start-ups have been created in the financial sector: it’s the FinTech. Co-banking, new payment systems: no shortage of ideas, and the potential is huge.
- Insurance: insurance brokers and agents benefit from rate of return often very comfortable. There still, start-ups have invested the insurance world, with often innovative and promising ideas.
- Real estate: it is a particularly profitable activity, particularly in the phases where real estate prices rise quickly. Similarly, property management activities are traditionally very profitable, as well as the rental of housing or property and land for professional use.
- Building and construction: developers know it, some real estate programs may generate them only several million to€ profit.
- Networking platforms: this is the model Blablacar, Airbnb and Uber. The model is related to the supply and demand, and pocketing a commission. Simple, inexpensive, highly profitable.
- Strategy consulting: the Council of high level may be very juicy. A consultant recognized on its niche of activity can charge between €1,000 and €2000 per day of Council. Strategy consulting is however dominated by large firms.
- Energy production: we think for example of small hydro-electric plants, which it is possible to acquire shares. The return on investment can be excellent if the weather is favourable.
- Activities based on recovery: you think of companies that get free clothing, waste, or damaged items to value them or give them a second life. Margin rates are often impressive.
- The culture of the vine: rates of profitability of this sector can be very high in some years. But activity is dependent on the vagaries of the weather…
Create a profitable business: it depends on you!
Actually, profitability depends less on the business behavior and the vision of the business manager.
Profitability will go If it is a good business model , whatever the sector of activity.
A good economic model is a model that allows:
- an attractive value offer – a product able to satisfy customers and win against competitors.
- a appropriate organization: sustainable, consistent with the value offer, and inexpensive.
- all for a good profitability (few expenses, many recipes).
Create a profitable business is based on a strategic vision: business leader to imagine a “space of profitability”. It must be imaginative, clever and curious. They must be realistic and anticipate risks.
Finally, if the contractor has trouble identifying a promising business model, it has solutions: choose to redeem a companyrather than create it, or even join a franchise network .