The most profitable business with minimal investment

Whatever the business, there are different criteria for its evaluation. For a person interested in doing it, the most important indicators are profitability, expenses, profitability and profitability, which is a summing indicator.

Briefly about these parameters: profitability is an indicator of how much this or that type of business can bring. This refers to the funds that come from customers after completed sales. Expenses are the part of them that goes to pay off debts to employees, to contractors-suppliers of materials and services, to the state for carrying out activities, obtaining permits, taxes, and so on. Profit is the difference between income and expenses - this is the part that goes to improve, modernize, develop business; and payback is a coefficient showing the period of time for which the initial investment in the business will be returned - the funds necessary to start.

Accordingly, if the business model is profitable, then after a certain time it will recoup the initial investment of the investor (most often it is the business owner), after which the latter will start earning additional money, increasing his capital.

The question of profitability and payback

Many entrepreneurs who want to start this or that business are interested in the question of how to find the most profitable business. This is obvious: the more profit a business model brings, the more profitable it is to do this business, and the more interested an investor will be in it. Due to the profit, the business owner will be able to earn more by increasing his fortune. True, profitability is not a single indicator that deserves attention.

Profitability is also important. It, as noted above, determines how long the most profitable business (whatever it may be) will allow you to return the investment made in it. And this figure is more important than the net profit indicator.

Let us present to your attention a simple example: at the state level, the most profitable business is, undoubtedly, the trade in carbons - oil and gas. This raw material is bought by other countries in huge volumes, which makes it possible to receive billions of dollars in profits. On the other hand, investments in this business are colossal. In order to start extracting oil, you will need billions of investments. This proves that the most profitable business is not always the most profitable one.

Yes, and to do what brings a lot of profit, not everyone can. Another example is casinos and gambling. The organization of gambling is clearly the most profitable business with minimal investment. However, it is not so easy to get admission to this market, given the system of licenses and permits that the state must issue.

Establish or buy?

For those who are looking for the most profitable small business, there are three ways to find it. The first is starting your own business. It involves having a desire to do something and understanding how this business can be profitable. You don’t need to look far for an example: you understand that the cotton candy trade can be very profitable if you set up a tent on a day off near the zoo. Your task is to organize this business: purchase equipment, obtain permits, purchase raw materials. With the apparatus for creating cotton wool and sugar, obviously, there should be no problems - all this costs a penny compared to the final cost of the product. However, the permission to trade in a food product, as well as the ability to establish your outlet in a location advantageous to you, is very expensive, especially given the corruption in the authorities dealing with such issues. These difficulties do not allow us to characterize the trade in such products (cotton wool, coffee, snacks, etc.) as the most profitable business in Russia. You need to spend a lot of money to obtain permits and formal documents.

Another option is to purchase a ready-made business. With this, it is much easier to determine how profitable the business will be. You can simply ask the previous owner about how much his business brought him and at what cost. Thus, you can easily calculate the profitability of this business. True, there are "pitfalls" in this technique - hardly anyone will sell the most profitable business with minimal investment at an affordable price. That is, either they will try to slip you some problematic option (a business without a license, documents, or with some other problems), or the owner will simply overestimate sales figures in order to make his business more attractive in your eyes (as a buyer). Therefore, when buying a ready-made business, you need to be careful and you should definitely find out the reason for the sale.

Franchise

The third option is perhaps the easiest and most reliable way to find the most profitable small businesses. This is franchising. This is the name of a special form of cooperation, according to which the business owner transfers the right to use some elements of his business (brand, trademark, some special tools, knowledge or skills) to other similar entrepreneurs for an additional fee. For example, a common practice is to open a chain of restaurants on a franchise basis. It can also be a network of gas stations, cafes, shops and other customer service points. The advantage of franchising is that the budding entrepreneur is in some sense trained by the franchise owner by providing certain resources. This approach makes such a business quite profitable, since the franchise tenant has the opportunity, with minimal investment, to start making a profit in the shortest possible time.