To read the most up-to-date version of this article, view the Most Profitable Businesses in the UK 2024 here.
Pursuing a money-making business is a great goal to have, but some entrepreneurs may not know what the most profitable business opportunities are, or how their industries are performing. While profits may not be your momentum for starting or buying a business, it should be a determining factor. After all, generating a profit will make or break your business.
To help you launch your journey to business ownership, this article will list the most profitable small businesses you can start or buy in the UK.
Before we start, it’s important to understand that becoming a business owner means facing multiple challenges. It’s a big commitment that requires meticulous research, planning, financing, and reslience. Whether you want to start or buy an existing business, there are a lot of moving parts to each process. But becoming a business owner can also pave the way for huge achievements, financial rewards, and a safety net for your future.
Now, let’s get started. Here’s our list of 10 of the most profitable businesses you can consider in 2023.
Most profitable small businesses in the UK
It may come as no surprise that some of the most profitable small business ideas operate online. However, many still involve physical services or property. Let’s take a look at some profitable small business ideas.
Retail e-commerce store
An obvious first place. The retail e-commerce market has skyrocketed since 2017, with a forecasted revenue of approximately £221 billion ($285.56 billion) in 2025. Some of the most profitable e-commerce stores utilise online platforms that have significant national and international reach, accelerated by multi-channel selling and buying.
Whether you plan to design niche products or utilise drop shipping methods (we’ll come to this business idea next), starting or buying an existing e-commerce store can lead to significant profits with low operating costs – if you attract buyers effectively.
Remember, this is a fiercely competitive industry, so it’s essential to validate your product and prepare for macro-economic pressures like inflation, recessions, and supply chain disruptions.
Dropshipping
Dropshipping is a great small business idea for entrepreneurs who don’t have money to invest in production, shipping, storage, or logistics. It’s also a great profitable side business. While it’s technically a delivery model for e-commerce stores, it’s worth getting its own spotlight. Simply put, dropshipping is when you sell products to a customer for a fixed price, but a third-party supplier will deal with inventory, and manage and ship the order for a fee.
In 2022, the average amount a dropshipper earned in the UK was £2,000 a month. According to research, dropshipping is a primary driver for the growth of the global e-commerce market. In 2020, the global market size of dropshipping was USD 128.6 billion, and there’s no sign of this slowing down.
Investing in a dropshipping business is a relatively easy way any entrepreneur can make money, but always remember to understand the risks of pursuing this type of business model.
Airbnb hosting
Airbnb hosting is considered one of the most profitable side business ideas. If you own property and live in an attractive or busy location, you could rent your space and become an Airbnb host. According to a survey conducted by Airbnb News, a typical UK host can earn over £6,000 annually. While this may not be a full salary, it’s a great source of additional income that can combat the cost-of-living crises.
In 2018, approximately £3.8 billion was generated by Airbnb hosts and guests in the UK. If you have sufficient capital and property management experience, you could buy or lease multiple properties and rent them out, earning far more passive income.
However, the UK Airbnb rental industry is extremely saturated, with more than half a million Airbnb listings recorded in 2021. Conducting accurate market research on popular locations, occupancy rates and pricing strategies is crucial. You can use Airbtics to do this.
Cleaning services
Starting or buying a cleaning business in the UK is another high profit business idea. There will always be consistent demand for commercial, domestic or specialised cleaning, so investing in this type of business can lead to substantial profits. According to the British Cleaning Council, most cleaning services (9 out of 10) are micro businesses, so you won’t be competing against large corporations.
While it’s possible to make upward of £40,000 a year from a small cleaning business, you can earn far more by investing in a cleaning franchise.
Graphic design services
Graphic design is another profitable business idea, which you can also launch from the comfort of your own home. Graphic design is a broad term that encompasses brand design, marketing design, web design, illustrations, infographics, and more.
Research indicates that the UK graphic design market has grown significantly over the past few years, with a market size of £3.6 billion in 2022. This is not surprising; graphic design is an important vehicle to communicate brand messages to consumers.
Entrepreneurs that are highly qualified and experienced can earn up to £100,000 a year, making it one of the most profitable service businesses. According to a survey, 94% of negative feedback is related to a website’s design. Owning a graphic design agency is a great opportunity to tap into this business need.
Freelance copywriting
If you find a niche and build an excellent reputation, becoming a freelance copywriter can be a profitable business idea. Being a copywriter is also considered one of the best careers for entrepreneurs in the UK, and is certainly a great small business idea from home.
Some senior-level copywriters charge a daily rate of £500-£800. Assuming you have this level of expertise and charge the higher end, you could make £2,000 in just four days! Freelance copywriting is a fantastic way to earn money with the added benefits of flexibility and autonomy. You really will be your own boss.
Auto repair business
Owning an auto repair shop is a great option for entrepreneurs who know how to manage, repair and maintain traditional, electric and hybrid vehicles. The motor vehicle maintenance and repair market size increased by 3.9% in 2022, boasting a combined revenue of £28.8 billion in the same year.
It’s possible to earn up to £65,000 a year if you run a thriving auto repair shop in a busy location. Although this business idea requires specific skills, it’s a stable industry to invest in. After all, vehicles legally need to be safe to drive.
Educational apps that cater to children
Investing in an industry that will always be a crucial part of children's growth is a great route into business ownership.
The UK Edtech market is expected to achieve a CAGR of 22% or more by 2026, attributed to technology-mediated learning affording more opportunities to young people.
Although it’s a competitive and fragmented market, it’s possible to launch an app that can gain significant traction with the right product-market fit. Remember, developing an education app is a complex pursuit, so it may be worth investing in an existing Edtech business that you can improve and grow.
Food truck
Owning a food truck can be one of the most profitable food business ideas. According to a report by Business Gateway, independent street food stalls were the best performing category in 2021.
Although starting a food truck can be expensive, it can generate significant returns with dedication, perseverance, and the right location. Some food trucks in London turnover £100,000 a year. It’s a fun, intimate, and challenging business to invest in if you’ve got ambition and a passion for food.
If starting or buying a food truck seems too expensive, you could think about starting a food business from home.
IT support
The last profitable business on our list is IT support or technology consulting. Individuals and companies are dependent on technology, but not everyone knows solutions to complex IT issues.
IT outsourcing also dominates the market, with revenue expected to grow by 6.26% by 2028. If you have the technical knowledge, investing in an IT support business can be a lucrative decision.
FAQs on the most profitable businesses in the UK
What are the most profitable businesses in the UK?
Some of the most profitable small businesses in the UK include:
- Retail e-commerce stores
- Dropshipping
- Airbnb hosting
- Cleaning services
- Graphic design services
- Freelance copywriting
- Auto repair business
- Educational apps
- Food truck
- IT support and consulting services
What kind of online business is most profitable?
There are many variations of online businesses, all of which can generate significant profits if executed correctly. Online businesses that can generate the most profit include:
- Software as a Service (SaaS)
- Affiliate marketing
- Dropshipping
- Digital courses and products
- Niche blogging and content creation
- Web design and development
What small business has the highest profit margin?
A small business with the highest profit margin is bookkeeping and accounting services, with a 18.4% net profit margin.
What is the easiest business to succeed in?
This really depends on your skills and goals. It could be selling products on Ebay, pet sitting, running errands, or freelance services. It’s important to remember that easy doesn’t always equate to large profits.
Ready to start your journey into business ownership?
Being in control of your future and income is the foundation of entrepreneurial spirit, but starting or buying a business is not easy. There are multiple steps you need to take, the most important being:
- Funding to start or buy a business.
- Doing meticulous research on your industry, competitors and target audience.
- Having a clear and complete business plan.
Before you begin your journey, take some time to read our guides on starting different businesses. If you’re interested in buying a business, find out what the process looks like in our buying guide.
When you’re ready, you can explore thousands of profitable businesses for sale on our site.
Good luck on your exciting journey to business ownership!
@Be_theBoss