What is the most profitable business in the world? Many people assume industries like oil, banking, or tech make the most money globally. However, the businesses generating the highest revenue often have unique models that allow them to turn big profits. Here are some examples of the most lucrative companies worldwide.
Payday loans provide short-term, high-interest loans to borrowers in need of quick cash. These loans usually range from $100-$1000 and are due on the borrower’s next payday, hence the name. Payday lenders charge interest rates starting around 400% APR, generating huge profits from borrowers unable to repay the loan quickly.
The payday loan industry generates over $9 billion in fees each year in the United States alone. With their astronomical interest rates, these lenders can make the equivalent of a 400% annual return on a two-week loan. Even with defaults, the massive margins on these loans result in sizable profits.
Credit card companies are another incredibly lucrative financial business. When customers don’t pay their full balance each month, credit card issuers earn interest on the remaining balance. With interest rates commonly around 15-25%, this interest quickly adds up.
In addition to interest charges, credit card companies collect billions each year in late fees, overlimit fees, foreign transaction fees and more. With over 600 million credit cards in circulation in the United States, these various fees generate tens of billions in revenue annually. The largest credit card issuers like Visa, Mastercard, and American Express are some of the most profitable companies worldwide.
Pizza delivery stands out as an extremely profitable food business. The average pizza place has a profit margin over 15%, surpassing the restaurant industry average. Delivery and takeout have grown immensely during the pandemic, increasing revenues.
Pizza delivery is also popular for entrepreneurs to start small businesses, as start-up costs are reasonable. With minimal staffing and ingredient costs, a delivery pizza operation can generate profits of over $70 per hour. Large national chains like Domino’s and Pizza Hut make billions in profits annually from their thousands of stores.
Full-service restaurants provide customers with a complete dining experience, with servers, bartenders and cooks on staff. This table service justifies higher menu prices, increasing profit margins. Alcohol sales also boost revenues significantly.
According to research by Sageworks, full-service restaurants average around 10% profit margins. Well-run establishments in busy locations can maintain margins of 15-20%. Full-service restaurant sales are estimated at over $250 billion annually in the United States alone.
Retail encompasses a huge segment of the economy, with over $4 trillion in U.S. sales each year. Successful retailers maximize profits by controlling inventory costs and optimizing their margins. Discount retailers like Walmart keep margins low but turn huge profits through their staggering sales volumes. High-end retailers like Nordstrom Rack boast margins over 40%.
While online shopping presents challenges, brick-and-mortar retail remains essential. Clothing, accessories, electronics and department stores generate solid returns in busy shopping areas. Small specialty shops also thrive by providing unique products.
Car washes are an extremely popular business, providing fast and convenient cleaning services. There are over 23,000 car washes operating in the United States. Car washes have advantages of recurring customers and minimal labor and inventory expenses.
Self-serve car washes generate profits of 40% or more, while automated car washes average margins around 20-35%. Additional services like detailing boost revenues. New express exterior washes are growing in popularity as well, providing quality cleaning in just minutes.
Home Service Businesses
Home service businesses like plumbing, electrical, HVAC, and painting provide essential repair and maintenance services. With routine maintenance and emergency calls, these businesses maintain a steady customer base.
Minimal equipment and start-up costs make starting a home service company relatively affordable. These businesses can quickly build recurring customers and word-of-mouth referrals. Specialization in a specific service allows focusing on quality work and higher margins.
Selling new and used vehicles is an enormous business, with over $1 trillion in U.S. sales annually. Dealerships generate significant profits through maintenance and repairs in addition to vehicle sales. Auto dealers maintain average net profits between 2-4% on sales. However, service and parts departments achieve profits of 45% or higher.
Luxury and specialty dealers can command higher margins on vehicle sales. But all dealerships rely on their service departments as the most consistent profit center. This recurring revenue provides financial stability despite fluctuations in sales figures.
Large publicly traded corporations are some of the biggest moneymakers worldwide. Companies like Walmart, Apple, and Saudi Aramco annually generate hundreds of billions in revenue and profits. Their global scale allows them to maximize profits across their operations.
These corporations control huge shares of their respective markets, enriching shareholders and executives. However, running these multinational companies also requires significant resources and investment. Achieving consistent profits at scale is an immense challenge. But the world’s largest corporations have proven their capabilities to generate wealth year after year.
In summary, while the oil and banking industries hold trillions in assets, some of the most profitable enterprises globally are more specialized. Companies focusing on financial services, food services, retail, automotive, home services and more build business models that allow them to effectively monetize their offerings. Their operational efficiency and customer demand drive outsized profits compared to their market share. Understanding what makes various business models lucrative can provide insights for aspiring entrepreneurs as well as investors.