You’ve decided to start a business, but your idea is a product that needs to be manufactured. If you have no idea where to begin, that’s completely normal. We’re going to show you how to manufacture a product. Some of the most successful business owners have created custom products to delight their customers. Pooch Selfie and Shed Defender are two businesses that work with manufacturers and will share how to manufacture a product with us. We’ll share the manufacturing process and tips so you can learn how each of these petrepreneurs make more than $150K per year. Get ready to learn how to master how to manufacture a product!

How much does it cost to manufacture a product?

Most estimates say you should expect to spend $30,000 to go through the manufacturing process from start to finish, but depending on the products, it can range from as little as $20 for a t-shirt prototype with print on demand, to as much as $400 million for research and development (R&D) and the prototype of SpaceX Falcon 9 rockets.

Step 1. The Idea

You might already have an idea, but there are some things you need to know about product ideas before you go full speed ahead. There are four main things you need to know before you start trying to create your ideas: [su_note note_color="#dbeafc"]

1. Most manufacturers require a minimum order quantity or amount spent.
2. Each product you create will often need to meet the minimum amount for custom manufacturing.
3. Raw materials from China only make sense with large quantities.
4. The farther you are from a manufacturer, the harder it is to perform quality control and logistics management.

[/su_note] If you have a great idea for 10 different related products, it will be hard to be cost-effective. Choose the best idea and go with it.  Work on the other ideas after you’ve: [su_note note_color="#dbeafc"]

• Found the right manufacturer
• Mastered the process from design to manufacturing
• Successfully sold the finished product

[/su_note] If you don’t already have an idea, that’s okay because they are all around you. Listen to things your friends and family say they wish someone would create. If someone hasn’t already, you’ve found an opportunity. Casey Walter, the owner of Shed Defender, told us: [su_quote] I came up with the idea of a doggie onesie because I got tired of my friends complaining about my Saint Bernard shedding. People used to laugh at me when I created a onesie for a dog, but it didn’t stop me. [/su_quote] Check out his interview below: [su_youtube url="https://youtu.be/XTiks_VFTMo?t=124"] Jason Hernandez, the owner of Pooch Selfie, had a similar path to his idea. He told us: [su_quote] This was really a backyard invention that I created because my dog, Logan, won’t sit still when we’re trying to take a picture of him. He loves tennis balls, but not the camera. Let’s see what happens if we put the two together. [/su_quote] Keep reading for the next step of manufacturing high-quality products.

Step 2. Design or Sketch the Product Idea.

You can’t start the production process until you create a design or sketch of the product. No one can see what is in your mind’s eye. You have to give them something to help them understand what you need. If you have graphic design experience, use it to design the product. You can use products like AutoDesk products if you have them already but read about the best product design software before you go spend $355 per month on AutoDesk software. It’s okay if you don’t feel like you are a great artist, you don’t have to be. This is just to help a local artisan understand your intent. Give it your best and make sure you document the date of the idea to protect yourself if you talk to anyone about it. You can document an idea’s date through several methods: [su_note note_color="#dbeafc"]

1. Metadata of digital files: Enables experts to track the date of the original idea
2. Include it on a physical drawing: Put a date on the drawing, then take a picture, and immediately email it to yourself.
3. Get it notarized: This is going a bit far, but if it’s that valuable it might be worth it to have a notary witness you sign and date the document.

[/su_note]

Step 3. Find A Product Development Consultant

Once you have an idea and drawings, you might need to approach someone who knows how to manufacture a product and has done it many times before. They can help you reduce the time to complete the rest of the steps. You can hire professional consultants or just talk to business owners you know. As long as they are in the same industry, they’ll be able to give you some advice about how to make a product. Before you talk to them, you’ll need to have them sign some documents to protect your idea. Let’s dig deeper to protect your idea before you have filed for intellectual property protection.

Business documents to protect your idea 

Businesses are notorious for using others’ ideas to make more money. Whether they do it legally or illegally, doesn’t matter. If you want to protect your company idea make sure you have people sign these documents before sharing business information: You’ll want to have the following documents signed before you provide any information to other people: [su_note note_color="#dbeafc"]

• Non-Disclosure Agreement: This is to protect against people disclosing information about any confidential information.
• Non-Compete Agreement: This is to protect against a person or company using information they gain to create their own product.
• Exclusivity Agreement: This is to prevent a company from using your equipment. UpCounsel (not related) has a good breakdown of what should be included.

[/su_note] Now you know how to protect yourself and your small business against bad actors. Let’s look at sourcing materials for a prototype.

Step 4. Source Materials for the Prototype

The next step in product manufacturing is sourcing the materials for a prototype. You’ll normally want to look for a supplier of raw materials that will sell in small quantities. Places I would recommend looking include: [su_note note_color="#dbeafc"]

• Local craft stores
• Amazon
• Walmart
• Places that own 3D printers
• Machine shops
• Recycling yards

[/su_note] The goal here is to get the raw materials quickly and at the lowest dollar amount. Small businesses don’t need a large upfront investment for something the target market might reject.  Finding suppliers should not extend internationally right now unless you can not find another way in the United States. International shipping can end up costing 10x the value of the small amount you need to start producing prototypes. I had a client that ignored my suggestion to stay local and ended up spending $1,200 for a roll of fabric for his eCommerce business that he could have bought locally for $70. Ninety-nine percent of it was shipping costs. Do you find that hard to believe? Read this blog about shipping costs from China to understand how something like that happens. You can complete the entire process of starting an eCommerce Print-on-Demand store for the same price as shipping from China. Once you have the parts for a prototype, it’s time to create your original design. Keep reading to find out how.

Step 5. Create the Prototype

Creating a prototype to show your target market, the United States Trademark and Patent Office, and potential manufacturing partners, will be necessary to limit the risks and improve the chance of success. There are several ways you can make a prototype depending on the type of product. The most common are: [su_note note_color="#dbeafc"]

• Self-produce 
• Work with a print shop
• Work with a local seamstress
• Work with craftspeople
• Hire a manufacturer who manufactures prototypes

[/su_note] As a new business owner you may not have the skills, resources, or equipment to create a prototype in-house, but if you do, it is a great way to establish the production process so you can specify it when looking for bulk manufacturers. Once you’ve completed the prototype, there are a few steps you can work in parallel to speed up the process. 

Perform in Parallel

You’re heading in the right direction! Now is when the most challenging parts come into play. Fortunately, you can perform the next five steps in parallel. Before you can start mass-producing products, you’ll need to: [su_note note_color="#dbeafc"]

• Test the Prototype
• Apply for Patents and Trademarks
• Create Cutsheet or Manufacturer Specifications
• Find and Purchase Bulk Materials
• Find Quality Manufacturers

[/su_note] We’ll walk you through each of the steps to help you learn how to create a product.

Step 6. Test the Prototype

Once the prototype is created, you’ll want to verify that it works properly and that there is an actual demand for it. Use the item to see if you like it because your views of the product can influence success. After you test it, start performing market research. Market research can be as simple as letting friends and family test it or conducting formal research using a market research firm. Just search “market research company near me” to find ones to work with locally. Questions to ask will be different for each product, but let’s look at some that Pooch Selfie might have asked:

1. Do you have difficulty getting your dog to stay still for pictures?
2. Does your dog like tennis balls? If not, what do you think they’d like more?
3. How often do you think you’d use this product?
4. If you saw this product in stores, how much would you expect to pay?
5. How many tennis balls would you want to come with the product?
6. Where would you expect to see this product?

Check out our interview with Pooch Selfie below! [su_youtube url="https://www.youtube.com/watch?v=j7UzP5dVOqA"] The goal is to determine the target audience, how to best sell the product, and whether the product solves the problem. While you (or a market research firm) are working on the market research, you can also work on applying for trademarks and patents.

Step 7. Apply for Trademarks and Patents

Trademarks and patents are to protect intellectual property(IP). Trademarks protect brand names, logos, and slogans that you don’t want other companies to use. Patents protect inventions based on whether it meets the following requirements: [su_note note_color="#dbeafc"]

1. Does it fall into the following categories of products?
   • Machines
   • Processes
   • Articles of Manufacture
   • Compositions of matter
2. Is it unique? More specifically, is there a similar type of product already on the market?
3. Is it useful?
4. Is it obvious? If it is obvious it cannot be patented, so make it a point to prove it is not obvious. Remember, once something has been created, it is obvious why it makes sense.

[/su_note] You’ll want to get protection in the countries you are selling and manufacturing the products. In the United States, apply for trademarks and patents at USPTO.gov. For international IP protection, go to WIPO.int.  Now that you know where to patent and trademark your item, let’s look at creating manufacturer specifications.

Step 8. Create a Cutsheet (Manufacturer Specifications)

When wondering how to get a product manufactured, you’ll need to create manufacturer specifications. These are often called “cut sheets” or “tech packs” and are used in most industries. See the picture below for an example of what a cut sheet for a clothing manufacturer might look like. Shed Defender would use something similar, but with specifications for different dog sizes, meaning in addition to the neck, armholes (front leg holes for dogs), chest, and waist, they’d need rear leg holes, tail hole, and measurements so the garment allows the dog to tend to its needs. This document should include: [su_note note_color="#dbeafc"]

1. Identifying Information: Business name, product name, model number, style number
2. Date: Show when the tech pack was created. Helps protect and defend theft of IP
3. A picture: Help manufacturers and suppliers see what it looks like
4. Measurements: All measurements necessary to properly manufacture the product for each size of the product
5. Colors: Use the form #000000 (black) to #ffffff (white). Identify colors at color-hex.com. Create a different sheet for each variation of colors for materials.
6. Product care information: The tags on clothes should follow specifications outlined in coats.com’s product care standards blog. 
7. Technical information: Volts, watts, amps, anything needed for it to run properly
8. Materials: Type of material, description of the material, color, quantity, supplier
9. Notes: Any notes needed to help the manufacturing company create the product

[/su_note] I figure you might want to know about other industries, too. For example, here is another example from a plenum kit used in HVAC equipment. Once you have this, it’s time to find a supplier and manufacturer.

Brief interlude to explain shipping’s impact on the process

Before we provide a list of references, it’s important to remember that the shipping costs from China should be assumed to run $1,200 or more and take months to get here. Commerce.gov estimates that you should expect: [su_note note_color="#dbeafc"]

1. Documentation, customs clearance, handling, and inland shipping: 17-33 days
2. Time shipping from overseas to US: 14-30 days (sustainable solutions up to 120 days)
3. Shipping time once in US: 6 days
4. Total time in shipping: 37-69 days

[/su_note] If this occurs multiple times, you might have a real issue with turnaround time. Turnaround time is the time from when you order something to when you receive it. Let’s show how this can play out when manufacturing products: [su_note note_color="#dbeafc"]

1. Order fabric from China and ship to US: 69 Days and $1,200+
2. Review fabric order to verify it is correct: 3 days
3. Ship to manufacturer in Cambodia: 69 days and $1,200+
4. Manufacturing time: 30 days
5. Ship to a distribution center: 69 days and $1,200+

[/su_note] If it plays out this way, every order will take nearly nine months to produce and cost at least $3,600 in shipping. That is far too long for a small business owner. In a best-case scenario, you might reduce the time to 67 days and $1,200 in shipping if the supplier and manufacturer are in the same overseas location. You’ll need to have efficient quality control processes though. You also need to consider how this impacts costs associated with inventory and gross margin. Ready Ratios has industry gross margin ratios by year, but most are between 20-55%. The formula is: [su_note note_color="#dbeafc"] Material costs + cost of manufacturing + all shipping + labor attributable to sales  = 45-80% of expected revenue.  To justify $3,600 in shipping costs, you’ll need to make at least $100K in revenue. [/su_note] Run your decision-making through a sanity check before going with overseas manufacturers and suppliers. Financial issues are the #1 reason small businesses fail. Keep that in mind, and start by looking for manufacturing partners in the following order: [su_note note_color="#dbeafc"]

1. Locally-owned manufacturer and supplier
2. Regional manufacturing partners
3. National manufacturing partner and supplier
4. Overseas manufacturers and supplies

[/su_note] Now that we’ve covered this product manufacturing process example, let's discuss suppliers.

Step 9. Research Bulk Materials and Find a Supplier

You’ll need to find a supplier to provide any materials you need to manufacture the products. Depending on the type of products, you might need raw metals, raw cotton or fabric rolls, plastics, zippers, buttons, or other products.  It can be hard to find suppliers if you’ve never looked for them before, so we’ve provided a list of places to find suppliers:

1. Thomasnet: Search for suppliers by product or service, brand name, or company Name. You can also browse by industry, find buyers, and get industry insights from them.
2. IndustryNet: Request a quote online and get quotes from all qualified companies by filling out their short form:
3. Global Sourcing Specialists: If you want someone to help you with the whole process, I’d start out by contacting GSS. They will help you with sourcing, manufacturing, and quality control. This is more of a consulting company, but worth the mention.
4. Maker’s Row: Costs $60-$150 a month, plus an additional 10% for each seat on team accounts. Maker’s row connects customers with more than 10,000 manufacturers and suppliers. I’d try free sites first, but this site appears to be related to the MAGIC tradeshow (see next bullet point for more info on the show).
5. MAGIC Fashion Events: There are five events every year that include a trade show. Manufacturing companies and fabric suppliers go to Las Vegas, New York City, and Nashville to show off their newest fabrics, manufacturing equipment, and have a blast. I went for a client several years ago. It stimulated my creative juices.

You can also search Alibaba’s Gold Supplier list for suppliers who pay extra to be certified by Alibaba. As a Gold Supplier, you know they are a legitimate business that has been verified and inspected by a third party. [su_quote] Be aware that shipping goods from China can take 37-69 Days normally and up to 6 months for sustainable travel. [/su_quote]

Step 10. How to Find a Manufacturing Company to Manufacture Your Product

The links in the supplier section also help people find manufacturers. This section is going to focus on establishing what qualities make great manufacturers. We’ll look at how to find manufacturers in China and the US. 

How to manufacture a product in USA

Start locally to reduce shipping costs, time zone barriers, and quality control challenges that people face when looking for manufacturers. Just search “manufacturer near me” or “Apparel manufacturers near me” to find the ones closest to you. Hopefully, you’ll find a few local manufacturers.  Read the reviews or search for the local manufacturers on the manufacturing sites we listed. Reach out to find out about their limits on small batches, quality control standards, and if you can tour the facility. If they don’t meet your needs, find a manufacturer that will.  Finding a manufacturer in the USA has gotten easier in the last few years because technology and supply chain issues are reducing the competitive advantage of overseas manufacturers. The cost to produce manufactured goods is often competitive when comparing the total cost. You don’t need the absolute best price because when you manufacture products you need to balance: [su_note note_color="#dbeafc"]

• Price
• Ability to scale from small batches to mass production
• Speed of delivery
• Deviation from the standard of manufacturer goods

[/su_note] Send your specifications to several manufacturers to establish which one will be the best one for you. Hopefully, you’ll have multiple manufacturers to choose from, but when first starting, you may be limited to a single local manufacturer because most have minimum quantity orders. Now that you’ve found some potential manufacturers locally, it’s time to reach out to a few manufacturers overseas.

How to find overseas manufacturers

Follow the same process as you did for finding local manufacturers, but now you’ll be focused on how to find a company to manufacture your product overseas. Ecommerce entrepreneurs will be able to find more than one manufacturer overseas, but they need to be wary of several challenges: [su_note note_color="#dbeafc"]

1. Trading companies: They might pose as a manufacturer, but a trading company can not actually manufacture goods.
2. Working conditions: An overseas manufacturer may have working conditions that your target frowns upon. When considering how to manufacture a product in China, you may not want to pay kids working on factory floors. That could become a PR nightmare.
3. Manufacturer company time zone: Working with a manufacturer that is on the other side of the planet can complicate business communication. If you aren’t down for 11:00 PM meetings, look for other manufacturers.
4. Costly to visit the manufacturer: While visiting a shop supplier and manufacturing company overseas is something you should do, it becomes much more costly than driving to the nearest manufacturing hub in the U.S. 

[/su_note] Keep these things in mind when considering how to approach a manufacturer with your product idea. Most will provide a quote through email, but that doesn’t show what goes on in the factory. After you have received bids from multiple overseas and local manufacturers, it’s time to compare the costs.

Step 11. Compare Manufacturing Costs 

You found a few different potential suppliers and manufacturing facilities, visited them, and got quotes. Now it’s time to compare them. I tend to like using a multi-factor ranking system to compare competitors. I like using the following system in an excel spreadsheet: [su_note note_color="#dbeafc"]

1. Name: First column
2. Location: Second column. Use city or country
3. Price: Third column. Use quotes. Lowest = highest score
4. Distance to nearest Supplier: Fourth column. Use Google Maps. Lowest = highest score
5. DIstance to me: Fifth column. Use Google maps. Lowest = highest score
6. Quality Control: Sixth column. In my example, I ranked them based on engineering experience combined with my ability to be there to establish if they are up to my standard. Best = highest score
7. Rank them: Best gets the highest scores in each column, then use the function =SUM (C10:E10) in cell G10, and then approve the autofill to get the totals.

[/su_note] You will get something similar to the picture below. If you want to assign extra weight to each aspect you can but it took including a 5x multiplier on the price columns ranking for me to shift the favor to China in this example. You can see below that the change made China tied with Las Vegasfor the most favorable option. I hope this has helped you understand why I would tend to gravitate towards manufacturing near me during the early stages of product manufacturing.

Step 12. Most Manufacturers Will Negotiate

When you are negotiating manufacturing contracts, the intent is to have long-term relationships that are mutually beneficial. We strongly recommend you consult with an experienced contract attorney before negotiating the terms of a manufacturing contract. These are the most common terms to negotiate: [su_note note_color="#dbeafc"]

1. Price: How much you pay per unit. Price tends to function inversely to how favorable the other terms are for you.
2. Duration: Length of contract. Longer lengths can impact price and exclusivity terms.
3. Quantity: Buy more for higher discounts.
4. Exclusivity: Terms that benefit the manufacturer or brand owner.
   • Manufacturer: The brand owner agrees to solely use the manufacturer.
   • Brand Owner: The manufacturer agrees not to manufacture competitive projects
   • Often both will be employed to help protect each side's interests.
   • Example: Pooch Selfie might have a contract where they agree to work with a manufacturer for five years, but the manufacturer cannot sell the design to Shed Defender or other pet product brands for the same five years.
5. Frequency of Orders: How often do you agree to receive orders
6. Shipping: Who covers what shipping costs. Often the manufacturer covers shipping in their country and the brand owner covers it once it departs the port in the manufacturer’s location.
7. Payment Terms: What portion are you paying?
   • Upfront
   • Upon Completion
   • Upon Delivery
   • Upon Sale: If you want a net-30 you need to let them know at first contact.
8. Cancellation Terms: What is considered a violation of the contract? And what are the penalties?

[/su_note] Once the terms are negotiated, it’s time to produce the goods with either a local or overseas manufacturer. It’s normally better to start with smaller batches to minimize the risk of custom manufacturing. This may not be possible with all manufacturing partners depending on their minimum order size.

Step 13. Begin Manufacturing

This stage will be handled by an overseas or local manufacturer. If you are personally overseeing adherence to the contract, you’ll need to periodically check in to verify that the specifications are met and the timeline is still achievable.

Step 14. Manage Logistics and Quality Control

Once the manufacturing process is complete, the goods will be shipped. You can save some money by picking them up if you are using a local manufacturer, but be prepared to work with customs if using an overseas manufacturing partner. Go to the US Customs and Border Protection (CBP) website to review the CBP importing goods guidance. They are the governing authority for importing and exporting. The U.S. Economic Development Administration also has resources to help businesses. Once you receive the goods, you need to inspect every piece and verify that each one meets the specifications. Hopefully, your contract had effective risk management strategies included in it, all parties followed them, and any defects were caught earlier in the process, but you should still check. Reject any faulty products because every faulty product you accept raises the cost of goods sold. You can’t afford to accept faulty products. Using fairly normal eCommerce margins, you’ll be losing money when you sell on your own website at around a 10% defective rate. If you sell online using other platforms, losses will occur much quicker.

Step 15. Packaging

Before a product is truly ready to sell, you’ll need to provide packaging. Whether you use branded packaging or generic packaging is highly dependent on what type of product and brand you are trying to create. You can either use custom packaging or generic packaging. Let’s look at each.

How to Create Custom Packaging

You can go with custom packaging, in which case you’ll need to hire a graphic designer on a site like Fiverr or Upwork. Make sure you find someone with experience in product packaging. Then, follow the same process outlined in this blog to have it manufactured. ThomasNet has a great list of custom packaging manufacturers. Find one that works for you.

How to Find Generic Product Packaging

If you are looking for generic packaging or companies that allow you to design it yourself, check out Packlane, which has a TrustPilot Score of 4.8 over 355 reviews.  You can also find clear baggies and other generic products on most marketplaces. For instance, Amazon has a pack of 100 9”x12” cellophane for t-shirts for $9.99

Wrapping It All Up

This step-by-step guide on how to find a manufacturer and create a product has provided you with the information you need to create your own product. If you’d rather focus on finding customers, Amazon helps people create their own books, t-shirts, and phone cases, while FastCap pays royalties for product ideas related to the construction industry. Which parts of the manufacturing process would you like to learn more about in future content?

Are you a small business owner looking for the best business books to help you solve a business problem? There are tons of books on business, entrepreneurship, marketing, accounting, and other topics. But it’s hard to filter through the noise to find the best business books.

Our co-founder and CEO, Serg Belous, made the mistake of believing he could just figure it out as he went. Five years later, he realized that there was information he just didn’t have as a business owner. That’s why he started researching everything he could.

In his research, he’s read close to hundreds of business books. The realizations he came to through his mistakes, research, and participation in mentorship groups led to the founding of UpFlip so others don’t have to make the same mistakes.

This list will help you find the best books on business topics that are worth your time. We have the books grouped into the following topics.

[su_note note_color="#dbeafc"] Read about them all or click the title that interests you most to jump right to it. By the end of this blog, you’ll know exactly which titles you need on hand to educate yourself for business success.

• Best Overall Business Books
  • #1. Think and Grow Rich by Napoleon Hill
  • #2. Traction: Get a Grip on Your Business by Gino Wickman
  • #3. From 6 to 7 Figures: Simplify Your Business, Gain Your Time Back, Scale Faster than Ever by Austin Netzley
  • #4. Ready, Fire, Aim: Zero to $100 Million in No Time Flat by Michael Masterson
    
  • #5. #MAXOUT Your Life by Ed Mylett
    
  • #6. Expert Secrets: The Underground Playbook for Creating a Mass Movement of People Who Will Pay for Your Advice by Russel Brunson
    
  • #7. Your Next Five Moves: Master the Art of Business Strategy by Patrick Bet-David
    
  • #8. Traffic Secrets: The Underground Playbook for Filling Your Websites and Funnels with Your Dream Customers by Russel Brunson
    
  • #9. Raise Your Game: High-Performance Secrets from the Best of the Best by Alan Stein Jr.
    
  • #10. The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career by Jack & Suzy Welch
    
  • #11. Ca$hvertising: How to Use More Than 100 Secrets of Ad-Agency Psychology to Make Big Money Selling Anything to Anyone by Drew Eric Whitman
    
  • #12. The Bezos Letters: 14 Principles to Grow Your Business Like Amazon by Steve Anderson
    
  • #13. Predictable Revenue: Turn Your Business Into A Sales Machine with the $100 Million Best Practices of Salesforce.com by Aaron Ross and Marylou Tyler
    
  • #14. The 10X Mentor by Grant Cardone
    
  • #15. How to Get Rich: One of the World’s Greatest Entrepreneurs Shares His Secrets by Felix Dennis
    
  • #16. Clockwork, Revised and Expanded: Design Your Business to Run Itself by Mike Michalowicz
    
  • #17. The Greatest Salesman in the World by Og Mandino
    
  • #18. Crushing It!: How Great Entrepreneurs Build Their Business and Influence—and How You Can, Too by Gary Vaynerchuk
    
  • #19. Entreleadership: 20 Years of Practical Business Wisdom From the Trenches by Dave Ramsey
    
  • #20. $100M Offers: How to Make Offers So Good People Feel Stupid Saying No by Alex Hormozi
    
  • #21. Expert Secrets: The Underground Playbook for Converting Your Online Visitors into Lifelong Customers by Russell Brunson
    
  • #22. Developing the Leader Within You 2.0 by John C. Maxwell
    
  • #23. Clockwork: Design Your Business to Run Itself by Mike Michalowicz
    
• Listen to the Best Business Audiobooks on Audible
  
• These are the absolutely best business books [/su_note]

You can find most of the books on the UpFlip Amazon Shop, where we make it easy for you to buy business resources.

Best Business Books

These are not just any business books—they’re the best business books of all time! And they’re all detailed for you in this comprehensive list!

#1. Think and Grow Rich by Napoleon Hill

#2. Traction: Get a Grip on Your Business by Gino Wickman

#3. From 6 to 7 Figures: Simplify Your Business, Gain Your Time Back, Scale Faster than Ever by Austin Netzley

#4. Ready, Fire, Aim: Zero to $100 Million in No Time Flat by Michael Masterson

#5. #MAXOUT Your Life by Ed Mylett

#6. Expert Secrets: The Underground Playbook for Creating a Mass Movement of People Who Will Pay for Your Advice by Russel Brunson

#7. Your Next Five Moves: Master the Art of Business Strategy by Patrick Bet-David

#8. Traffic Secrets: The Underground Playbook for Filling Your Websites and Funnels with Your Dream Customers by Russel Brunson

#9. Raise Your Game: High-Performance Secrets from the Best of the Best by Alan Stein Jr.

#10. The Real-Life MBA: Your No-BS Guide to Winning the Game, Building a Team, and Growing Your Career by Jack & Suzy Welch

#11. Ca$hvertising: How to Use More Than 100 Secrets of Ad-Agency Psychology to Make Big Money Selling Anything to Anyone by Drew Eric Whitman

#12. The Bezos Letters: 14 Principles to Grow Your Business Like Amazon by Steve Anderson

#13. Predictable Revenue: Turn Your Business Into A Sales Machine with the $100 Million Best Practices of Salesforce.com by Aaron Ross and Marylou Tyler

#14. The 10X Mentor by Grant Cardone

#15. How to Get Rich: One of the World’s Greatest Entrepreneurs Shares His Secrets by Felix Dennis

#16. Clockwork, Revised and Expanded: Design Your Business to Run Itself by Mike Michalowicz

Our CEO listed both the original and the revised version of this book in his list, so we’ve included both.

#17. The Greatest Salesman in the World by Og Mandino

#18. Crushing It!: How Great Entrepreneurs Build Their Business and Influence—and How You Can, Too by Gary Vaynerchuk

#19. Entreleadership: 20 Years of Practical Business Wisdom From the Trenches by Dave Ramsey

#20. $100M Offers: How to Make Offers So Good People Feel Stupid Saying No by Alex Hormozi

#21. Expert Secrets: The Underground Playbook for Converting Your Online Visitors into Lifelong Customers by Russell Brunson

#22. Developing the Leader Within You 2.0 by John C. Maxwell

#23. Clockwork: Design Your Business to Run Itself by Mike Michalowicz

Listen to the Best Business Audiobooks on Audible

I personally love listening to audiobooks on Audible. It’s affordable and I can listen to them while working, driving, and doing other tasks. Subscribe below to start a free trial and help support UpFlip in bringing you more information to grow your business.

These are the absolutely best business books...

Don’t forget to go check out our Amazon Book List for more of the best business books. We update the list of best business books as we find books we love. If you think there are books that should be on this list, let us know so we can take a look. If we love it as much as you do, we’ll add it to this list.

My motto is:

[su_quote]Never quit learning.[/su_quote]

Which book will you read first?

You want your time to be used wisely when you start your own business. That means you should know the most profitable businesses to start with the time, education, resources, and connections you currently have.

What’s considered “profitable” is always changing, of course, and that’s why we continually update our rankings. Every year the most profitable businesses will change slightly as our economy evolves, products become obsolete, and technology advances.

What follows is a freshly updated ranking of the most profitable small businesses, plus the info and resources you need to get started.

[su_note note_color="#dbeafc"]You’ll want to check out the following businesses. Click on any of the links below to jump to the one that interests you.

• Industries With the Most Profitable Business Ideas
• What Small Business is Good to Start?
  • 1. Cupcake Business
  • 2. Sports Memorabilia Shop
  • 3. Bridal Gowns and Accessories
  • 4. Consignment Shop
  • 5. Food Truck
  • 6. Bed and Breakfast (B&B)
  • 7. Party Rental Business
  • 8. Sewing and Alterations Shop
  • 9. Gently Used Maternity Clothing Shop
  • 10. Cleaning Service
  • 11. Virtual Assistant
  • 12. Social Media Management
  • 13. Accounting and Bookkeeping
  • 14. Consulting
• Least Profitable Industries
• Frequently Asked Questions (FAQs)
  • What are the top five most profitable businesses in the world?
  • What are the easiest businesses to start?
  • What businesses are in high demand?
• So What Are the Most Profitable Businesses to Start?[/su_note]

Industries With the Most Profitable Business Ideas

First, some context. We took a look at financial reports from early 2024 to ensure relatively recent data. When you consider industries with the most profitable businesses in demand, you’ll find:

1. Financials: The monetary sector leads the most profitable companies, with over 30% net income and gross profits for banks nearing 100%.
2. Oil & Gas: The oil and gas energy still has high net profits with 28.26% and a gross profit of 58.75%
3. Tobacco Companies: Selling addictive products pays off with a 27.52 net profit and 61.25% gross profit. If you could start growing and selling your own tobacco, you’d probably make a killing!
4. Transportation Companies: Railroads aren’t making as much as previous years, but they still have a 23.52% average net profit. Ship makers also have been making a great living.
5. Real Estate Investment Trusts (REITs): Real estate investment trusts are a big winner this year. They moved up from ninth place last year. Players in this industry can expect to earn 23.32% net profit and nearly 78% gross margins.
6. Software: Entertainment and system applications software companies are doing well with 20% net margins. Entertainment software has gross margins of 63%, while systems and applications have around 72% gross margins.
7. Investments and Asset Management: Managing other people’s money is an easy startup business. People with the right qualifications can tap into 19.82% net income and 67% gross margins.
8. Water Utilities: Providing water to municipalities can earn a sweet 19.34% net margin and 56% gross margin.
9. Semiconductors: Producing parts for electronic equipment can earn 17.94% net profits.
10. Computers: Computer and peripherals companies have a slightly less profitable business than the semiconductor companies that provide much of their technology, but they still have 17.47% profits.

Many of the most profitable businesses aren’t practical for people who want successful small business ideas for business owners.

Most of us don’t have access to venture capitalists or the ability to run a business for 10 years before it starts making money. So, we’re constraining our list to the most profitable and best small businesses to start.

What Small Business is Good to Start?

A good small business to start will normally have high growth opportunities and low barriers of entry, work well as a home-based business, and provide great profit margins. We’ve handpicked some of the most profitable small business ideas for you. Check out our picks for best profitable businesses 2024 below.

1. Cupcake Business

• Average Annual Revenue: $1.95M
• Average Profit Margins: 5.4%
• Startup Costs: $100-$3M
• Time To Revenue: 1-6 months
• Annual Market Growth Rate: 1.1%
• Best For: Cooks, chefs, bakers, or foodies with customer service, leadership, and marketing skills

Does your baking prowess receive rave reviews?

Consider exploring that talent! The cake industry is anticipated to see 3.3% growth, bringing it to $94.7 billion globally in 2028. Small specialty shops are poised to reap the majority of the profits.

A cupcake business emerges as a feasible option for individuals with limited resources. Launching this potential home-based venture requires only an oven and basic baking supplies.

As sales pick up, there's room for expansion to larger formats. Initially, you might sell cupcakes in a display case at a local shop, progress to a food truck, and eventually establish a standalone brick-and-mortar store.

Before diving in, thoroughly research the laws in your state governing the licenses, permits, and standards applicable to your budding bakery business.

Find out how Mignon Francois started the Cupcake Collection with just $5 and built a $10 million cupcake empire.

https://www.youtube.com/watch?v=jmviDvmh5js

2. Sports Memorabilia Shop

• Average Annual Revenue: $453,257
• Average Profit Margins: 6.7%
• Startup Costs: $100K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 1.5%
• Best For: Sports and pop culture experts, customer- and community-focused entrepreneurs, collectors

The current valuation of the sports memorabilia market is $26.1 billion—and it’s expected to grow to $227.2 billion by 2032 according to a report by Market Decipher.

This projection suggests significant annual profits for brick-and-mortar sports memorabilia shops. The essence of this small business concept lies in acquiring genuine or replica memorabilia and reselling it at a markup.

Procure memorabilia through various channels, including wholesalers, auctions, estate sales, advertisements, and online platforms like eBay. Make sure to confirm the authenticity of any signed memorabilia by autograph authenticators.

As you become proficient in authenticating pieces, you can generate additional income by authenticating memorabilia brought to your shop by customers.

Find out how Jim Sears makes $750K a year selling sports cards.

https://www.youtube.com/watch?v=bP5_Zt9VFXY

3. Bridal Gowns and Accessories

• Average Annual Revenue: $114K+
• Average Profit Margins: 10.3%
• Startup Costs: $500-$250K
• Time To Revenue: 3+ months
• Annual Market Growth Rate: 2.0%
• Best For: Designers, artists, and fashion experts with strong marketing and customer service skills

The bridal industry is expected to grow to $79.8 billion by 2027, which is a compound annual growth rate of 4.4%. According to BusinessWire, nearly 85% of bridal shopping is still done in retail stores.

Pro Tip: Note that bridal shops may cost $250,000 or more to get started because of all the gowns, veils, and accessories you’ll have to stock for your customers.

4. Consignment Shop

• Average Annual Revenue: $60K-$120K
• Average Profit Margins: 5-15%
• Startup Costs: $100-$10K
• Time To Revenue: 30-90 days
• Annual Market Growth Rate: -9.3%
• Best For: Fashion and style experts who are excellent negotiators and communicators

The projected growth of the secondhand market in the U.S. is astonishing. According to GlobalData and thredUP, the resale clothing market is expected to more than double its current value. With a growth rate that’s 16x faster than the overall retail clothing market, the resale clothing industry will reach a value of $82 billion by 2026.

A consignment shop is the ideal business model for entrepreneurs with limited funds. Entrepreneurs can participate in the profits without purchasing inventory by showcasing other people’s used products, including clothing, antiques, collectibles, and memorabilia.

Additionally, selling items on online marketplaces like Poshmark, Mercari, and eBay creates additional profitable opportunities by expanding to a national or even global market.

Primary consignment shop expenses are:

• Business formation as an LLC
• Storefront rental
• Licenses and insurance
• Inventory
• Point-of-sale (POS) system
• Hiring (if needed)

Overall, the growth in the secondhand market presents a promising opportunity for entrepreneurs interested in the consignment business model.

5. Food Truck

• Average Annual Revenue: $41K+
• Average Profit Margins: 6.4%
• Startup Cost: $1K-$100K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.2%
• Best For: Foodies, chefs, cooks, bakers, and other food service veterans

Many people start food trucks because they are more profitable than owning a restaurant. You can save money by:

• Holding off on hiring employees
• Avoiding the costs associated with a building
• Offering a more focused menu

Kyle Gourlie, the owner of Vet Chef, told us:

[su_quote]To get started, it cost me around $41,200. Today, I am making $417K a year and aim to keep my food costs under 35%.[/su_quote]

Check out our interview with him below to learn how to start a profitable food truck business.

Keep reading for more of our top small business ideas that will make for the most profitable, best businesses in 2024.

6. Bed and Breakfast (B&B)

• Average Annual Revenue: $263K+
• Average Profit Margins: 10.1%
• Startup Cost: $100K-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: 1.3%
• Best For: Property owners who are service industry pros with a passion for entertaining and hosting

If you happen to own a charming, rustic, or historically significant home, a bed and breakfast could serve as an excellent starter business.

According to the Bureau of Labor Statistics, the U.S. bed and breakfast (B&B) industry is presently valued at $2 billion. While it faced a slowdown during the COVID-19 pandemic, its typical growth rate stands at 3.8% annually.

One notable advantage is you’ll live in the business, which cuts down the costs of accommodations. Customers normally expect:

• Personalized customer service
• Unique travel experience
• Home-cooked meals
• Grocery stores nearby
• Personal advice about local attractions

Pro Tip: It's important to invest in home insurance, a food handling permit, and potentially a license to sell alcohol, if applicable. Additionally, if you plan to convert a traditional home into a B&B business, collaborating with your local planning commission may be necessary.

7. Party Rental Business

• Average Annual Revenue: $444K+
• Average Profit Margins: 35-40%
• Startup Cost: $100-$3.5M
• Time to Revenue: 6-18 months
• Annual Market Growth Rate: -0.8%
• Best For: People who own rentable assets, collectors, great networkers

The party rental industry boasts a valuation of $5.9 billion and is experiencing a steady annual growth of 4.3% as indicated by Research and Markets.

A business in party rentals involves leasing various products for events, including tables, tents, caterers, sound equipment, and stages. The venture holds significant profit potential, and your business could cater to a range of events, from nonprofit fundraisers to upscale galas.

While the potential earnings are promising, it's crucial to make a substantial upfront investment in equipment before expecting to see profits. The strategy involves recovering these costs through repeated equipment rentals.

When setting up your business's inventory, you can consider the option of renting a storage facility to potentially save costs. Then maximize community awareness of your offerings by engaging in robust marketing efforts. Establish a physical location as early as possible to build brand credibility and reap long-term savings.

8. Sewing and Alterations Shop

• Average Annual Revenue: $27K+
• Average Profit Margins: 8.3%
• Startup Cost: $500-$250K
• Time to Revenue: 3+ months
• Annual Market Growth Rate: 1.6%
• Best For: Detail-focused entrepreneurs, fashion and clothing experts who excel at listening and communication

Tailoring and alterations earn $9.4 billion, and the industry is anticipated to experience 4.7% year-over-year growth according to a report by Polaris Market Research.

The beauty of venturing into this type of business lies in its scalability, plus it will help you expand your skill set. Tasks like sewing simple hems and replacing buttons might evolve into dressmaking and design as your knowledge and experience grow.

I actually have an acquaintance who designed costumes for Cirque de Soleil before opening her own small business. With that experience in altering and customizing high-end garments, she opened a brick-and-mortar shop and gets asked to design work for businesses and live performances throughout the country.

During the initial stages, it is entirely respectable to launch your operation in a clean, smoke- and pet-free space within your home.

Pro Tip: Begin by making gradual investments in a commercial-grade sewing machine, a variety of fabrics, backup equipment, and a point-of-sale (POS) system. The costs can range from $150 for an entry-level sewing machine to $10,000 or more for a top-of-the-line model.

9. Gently Used Maternity Clothing Shop

• Average Annual Revenue: $60K-$120K
• Average Profit Margins: 5-15%
• Startup Costs: $100-$10K
• Time To Revenue: 30-90 days
• Annual Market Growth Rate: -9.3%
• Best For: Fashion and style experts who are excellent negotiators and communicators

In 2021, the maternity wear industry held a valuation of $12.2 billion, and projections from Research and Markets indicate a growth to $16.5 billion by 2028, featuring a 4.4% year-over-year increase.

The demand for formal business women's maternity attire is notably driven by the nearly 57% female composition of the U.S. workforce, as per the Bureau of Labor Statistics.

Following their pregnancies, many women opt to pass their maternity clothing on to others in need. You can play a role in facilitating this by establishing a shop specializing in gently used maternity attire and other pregnancy supplies.

Start your used maternity clothing venture by selecting and legally formalizing your business structure.

Then, get a seller's permit and source inventory from social media, consignment shops, and thrift stores. Promote your business within the community, expressing your interest in purchasing used maternity clothing. Finally, ensure profitability by selling the clothing at prices that exceed your purchase cost.

10. Cleaning Service

• Average Annual Revenue: $74K+
• Average Profit Margins: 6.7%
• Startup Costs: $1K-$30K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 1.2%
• Best For: Self-motivated, independent, and detail-oriented entrepreneurs

Cleaning businesses are virtually gold mines. They’re easy to start, and they have high success rates. Our friend Chris Mondragon pulls in over $125K monthly with his company, Queen Bee Cleaning! In his words:

[su_quote]As you start out, your margins are 40-50%.[/su_quote]

Forty to fifty percent! Seasoned business owners and aspiring entrepreneurs know how significant that is! With only 13 weekly cleaning contracts, you can rake in $7,800—not in revenue, but pure profit! Now imagine signing 20 or 30 of these high-paying contracts.

Cleaning is a business built to scale. But be careful: You can’t scale to millions of dollars just anywhere. There’s a tried-and-true calculation that reveals the earning potential in your area. If the numbers line up, you can scale to seven figures.

If you’re curious about how to use the calculation and want to know how to start your cleaning business from scratch—no franchise required—check out this free masterclass with Chris Mondragon.

You can read Chris’s incredible story here or watch our exclusive interview below.

https://www.youtube.com/watch?v=YcYIYdqegGA

11. Virtual Assistant

• Average Annual Revenue: $35K-$50K
• Average Profit Margins: 10.5%
• Startup Costs: $100-$200
• Time To Revenue: 1-3 months
• Annual Market Growth Rate: 1.9%
• Best For: People with strong organization and communication skills, those who want to work from home and set their own hours

Becoming a virtual assistant for clients you choose is a profitable business to start. Some of the top virtual assistants on Upwork make $85 an hour. That’s up to $152K per year for doing things like scheduling appointments, sending emails, completing research, and other jobs you can do remotely.

Like other jobs that use a knowledge-based business model, the main startup costs are licensing and software. If you want to make more than that, you can start a VA agency and hire other people to help with this small business idea.

12. Social Media Management

• Average Annual Revenue: $817K
• Average Profit Margins: 6.9%
• Startup Costs: $100-$10K
• Time to Revenue: 1-6 months
• Annual Market Growth Rate: 1.3%
• Best For: Social media experts, writers and content creators, people with search engine optimization (SEO) expertise

Social media marketing is a vast industry. According to Statista, it is a $153.7 billion industry. And all you need is a computer, some software, and to find some clients.

Jason Yormark of Socialistics told us:

[su_quote]You can expect each client to be around $2,000-5,000 per month and require 20-40 man-hours to give them proper service.[/su_quote]

That means a single person can make up to $40K monthly from home without investing in inventory. Find out how Jason turned his company into a $500K-a-year social media marketing agency:

https://www.youtube.com/watch?v=kb1czTEK8f8

Pro Tip: You can also learn from our blog on how to start a marketing agency.

13. Accounting and Bookkeeping

• Average Annual Revenue: $244K per employee
• Average Profit Margins: 18%
• Startup Cost: $500-$2.5K
• Time To Revenue: 3-12 months (plus accounting degree)
• Annual Market Growth Rate: 1%
• Best For: Certified accountants, entrepreneurs with strong math and financial skills

To become a certified public accountant, you will need 150 hours of education in accounting. That’s a bachelor’s degree and passing the CPA exam, which is a test for proficiency created by the American Institute for Certified Public Accountants (AICPA).

Once you have a CPA license, you can start a company and make a great living. There are only 40,000 AICPA members and over 80 million tax returns filed annually by tax professionals, so there’s plenty of work.

Granted, tax prep services do some of those, but CPAs do the big ones. Even at the low end of $100 per tax return, that’s still $8 billion in revenue, and that’s just part of what CPAs do.

Add in payroll, quarterly minimum filing, certifying businesses for SOC 2 compliance, managing business sales tax payments, and other business finances, and it’s obvious why working as a CPA is one of the most lucrative business ideas in 2022.

14. Consulting

• Average Annual Revenue: $364K
• Average Profit Margins: 6.4%
• Startup Costs: $1K-$3.5M
• Time To Revenue: 6-18 months
• Annual Market Growth Rate: 2.2%
• Best For: Executives and business leaders, entrepreneurs with management or business expertise, people with strong analytic, problem-solving, and communication skills

A consulting business is focused on helping other business owners solve their problems. You can choose a niche if you have a specific area in which you are an expert, or you can be an all-in-one solution.

When I initially started my consulting business, I was consulting on everything. One day I’d analyze payment processors, and the next, I would look for good influencers for a brand. I eventually gravitated to writing about business and technology because it makes it easier to pass knowledge on to thousands of people per month.

Business consultants can make anywhere from several hundred per day to billions per year. Consultants who specialize in mergers and acquisitions can earn huge commissions.

Check out this interview with Ryan Gromfin, who makes $35K a month with his consulting business:

Least Profitable Industries

There are some industries that are really struggling right now. You might want to avoid these industries if you want to make a profit fast.

Industry	Net Income
Entertainment	-0.23%
Telecom Services	-0.28%
Chemical (Diversified)	-1.01%
Broadcasting	-1.41%
Furniture & Home Furnishings	-2.24%
Rubber & Tires	-2.53%
Electronics (Consumer & Office)	-3.05%
Real Estate (Operations & Services)	-3.14%
Precious Metals	-4.26%
Drugs (Biotechnology)	-11.88%
Software (Internet)	-14.32%
Real Estate (Development)	-16.35%

Most of these industries are tied to big purchases. You’re seeing losses tied to inflation of expenses like materials and wages, combined with people cutting back on making new purchases. This is expected when discretionary income decreases.

Pro Tip: Assuming wage growth continues and outpaces inflation, we should see these return to profitability in a few years. Until then, our blog on recession-proof businesses can provide even more inspiration for getting started in a bad (or questionable) economy.

Frequently Asked Questions (FAQs)

What are the top five most profitable businesses in the world?

According to CompaniesMarketCap.com on December 11, 2023, the five most profitable businesses were

1. Apple (valued at $2.99 trillion)
2. Microsoft (valued at $2.741 trillion)
3. Saudi Aramco (valued at $2.139 trillion)
4. Alphabet (Google, valued at $1.665 trillion)
5. Amazon (valued at $1.503 trillion).

Note that the values of these companies fluctuate daily.

What are the easiest businesses to start?

Dog walking, house cleaning, and sewing businesses are the easiest to start because they have low startup costs and low barriers when it comes to getting licenses and permits.

What businesses are in high demand?

IBISWorld states that fruit and nut farming, solar power, online gambling services, hybrid and electric vehicle manufacturing, and 3D printing and prototyping are the fastest-growing businesses in 2024.

So What Are the Most Profitable Businesses to Start?

We’ve discussed the most profitable business ideas from multiple vantage points. Some are easy businesses to start from home, and some are not as easy to get into because of education requirements or other barriers to entry.

When it comes down to it, the most profitable business for you to start is one you have knowledge in, you know how to find customers for, and you want to spend the rest of your life exploring and working with.

You can make any of your favorite 2024 business ideas one of the most profitable and successful business ideas if you:

1. Create a business plan: Read our guide if you’ve never created one.
2. Provide excellent customer service: Check out HelpScout’s blog on what makes great customer service.
3. Educate yourself on the industry: Follow our blogs and YouTube.
4. Don’t give up: Many business owners give up right before they hit exponential growth. Learn how to run a business.

What other profitable and successful small business ideas are you thinking about starting?