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Canada’s small businesses contribute significantly to the economy, making up 98% of employer businesses in 2021. But starting or buying a small business brings multiple challenges and risks, so it’s important to understand what industries are the most stable and profitable, and how you’ll manage competitive sectors.
Understanding market growth potential and how it aligns with your skills and interests is essential to building a profitable small business. This article will provide you with a helpful analysis of Canada's most profitable businesses, offering recent market insights on 10 business opportunities so you can make a more informed decision.
Most profitable small businesses in Canada
From digital services to mobile food trucks, here are the 10 most profitable businesses you can pursue.
Financial technology (Fintech)
Canada currently has over 1,200 fintech companies, with Toronto widely regarded as the fastest-growing technology market in North America. This competitive fintech ecosystem needs entrepreneurs to meet the growing demand for innovative financial solutions.
Fintech companies generate revenue by utilizing technology to provide financial services to businesses and consumers. With the right skills and knowledge, this is an excellent opportunity for entrepreneurs who want to join an industry that is projected to be worth $1.5 trillion by 2030. Understanding how to buy a financial business like this is crucial – your due diligence phase should focus on the technology infrastructure, reputational assessments, and of course, the financial projections of the business.
Fintech business owners can typically earn an average annual income of $120,000 to $179,212!
E-commerce businesses
Online shopping has accelerated, with more people preferring the convenience of making purchases in just a few clicks. The Canadian e-commerce market is projected to reach a user base of nearly 32 million users by 2027, positioning itself among the leading markets globally. And with almost half the population engaging in online shopping, the e-commerce space is poised to keep expanding in the coming years.
As online shopping becomes more popular, offering unique value propositions is crucial for new business owners to gain an edge and succeed in the highly competitive market.
Glassdoor data shows that the average income of an individual e-commerce owner in Canada ranges from $80,481 to $127,000 annually. However, some of the most profitable e-commerce businesses with strategic marketing do over a million dollars in sales yearly. Whether you plan start or buy an e-commerce business, you’ll be heading into a fiercely competitive but lucrative market.
Software development
Canada's success stories in software development, such as Blackberry, Shopify, and successful video game franchises, have gained global attention. These success stories have inspired more entrepreneurs to pursue software development.
The market's competitiveness is high, with numerous established and start-up companies competing for market share. But this also presents lucrative opportunities for innovation and differentiation.
The software industry in Canada is gaining more attention and is expected to experience an annual growth rate of 4.65% between now and 2028. This growth is driven by the need for customized software solutions across various industries in Canada.
Entrepreneurs have a significant opportunity to enter the software development market, with small start-ups earning an average annual revenue of $1-2 million.
Online education and e-learning
Online education and e-learning have become increasingly popular in Canada, with the COVID-19 pandemic accelerating their adoption. This trend has created a favorable market for entrepreneurs in the online education sector. Despite the competitive nature of the market, there is still a chance for entrepreneurs to earn a solid income by investing in innovative educational platforms.
In Canada, the annual revenue in the online education market is projected to reach $8.24 billion by 2027. With an annual growth rate of 12.52%, there is a substantial opportunity for new entrepreneurs and those seeking to buy and scale e-learning businesses. Online educational companies in Canada typically accumulate an average yearly revenue between $65,000 and $100,000.
Payroll and bookkeeping services
The payroll and bookkeeping market is a highly profitable industry in Canada, offering specialized services focused on payroll processing, expense tracking, and tax filing. With everyone needing to file taxes, these services are in high demand, making them highly lucrative.
This industry had a market size of about $6.8 billion in 2022, and it has recorded a 2.5% increase in 2023. Interestingly, this market currently has low competition compared to other profitable small businesses, attributed to the expertise and skill required to carry out credible audits.
Small bookkeeping businesses in Canada can earn an average revenue of $100,000 annually. However, with the incorporation of AI and intelligent process optimization, some bookkeeping and payroll service businesses earn up to $2 million in annual revenue.
Digital marketing
The way people shop and make buying decisions has changed, so many business owners need digital marketing agencies to help them market their products and services.
With more and more stories of profitable businesses built by leveraging the power of social media and digital advertising, more Canadian businesses are investing in agencies that can expand their reach, attract new customers, and diversify their revenue streams.
The estimated annual global growth rate of 9.1% between 2023 and 2028 clearly demonstrates the increasing need for digital services such as search engine optimization (SEO), social media advertising, and email marketing. Small digital marketing agencies in Canada can earn up to $150,000 annually with only a few contract staff, making it one of the most profitable service businesses for aspiring entrepreneurs.
Business consulting
As the Canadian economy grows, competition across various sectors has intensified, leading to a demand for innovative business strategies. This trend naturally increases the demand for business consultants in Canada.
The consulting industry is a thriving market globally, with an estimated value of $321.52 billion and projected annual growth of 4.21% between 2023 and 2028. While the consulting market in Canada is competitive, it presents opportunities for entrepreneurs who can effectively market their services.
The average annual salary of business consultants in Canada falls between $90,000 and $200,000. Buying a consulting company and scaling it is a route that allows you to tap into an established client base and proven business model.
Waste management
With more than 35 million people in Canada, it’s no surprise that the waste management industry is thriving. Currently valued at $7 billion, the waste management industry is expected to grow at an annual rate of about 2.7%.
There are many opportunities in the Canadian waste management market, from collecting and recycling, to waste disposal and landfill management. Regardless of your chosen approach, building a strong customer base is essential to succeed in this competitive industry.
Waste management businesses in Canada can be profitable, with an annual salary of £58,500 to $124,099. Buying an existing waste management business can be a great way to enter into this lucrative market. a
Pet care
With a projected market value of $810.2 million by 2028, Canada’s pet grooming industry is a lucrative opportunity for entrepreneurs who love to care for animals. The market's potential is increasing with an estimated 3.2% annual growth rate. This presents an opportunity to introduce innovative pet care services and products to meet the needs of pet owners, such as pet grooming, daycare, and pet-friendly accommodations. Entrepreneurs who tap into this market can benefit from a growing customer base and potentially significant profits.
In Canada, owning a cat costs an average of $3,700 annually, while the average cost for a dog is $3,500 per year. This translates to high demand for pet products and services, including food, toys, grooming, and veterinary care. Despite being highly competitive, the pet care market still has ample space for aspiring entrepreneurs.
Entrepreneurs in the pet care and pet supplies industry have the potential to earn an annual income ranging from $50,000 to $150,000, depending on their level of expertise. Starting a dog walking business is also a great route into this market. If this doesn’t interest you, there are various pet-related business opportunities you can invest in.
Food trucks
The food truck business is a popular and profitable industry in Canada. The business involves selling food from a mobile vehicle, giving entrepreneurs the flexibility to move around and reach different audiences.
Research indicates that Canada’s street food vendor market size reached £228 million. While this number isn’t as large as other sectors, the market is expected to grow based on increased consumer confidence and demand for gourmet street food.
The competitiveness of the industry is high, but food truck businesses can set themselves apart by offering delicious dishes, building a unique brand, and implementing effective marketing.
The potential annual earnings for a food truck entrepreneur in Canada can vary depending on factors such as location, menu, and marketing strategy. With the growing demand for convenient and tasty street food, food truck business owners can earn between $250,000 to $500,000 annually.
Investing in an existing food truck might require more upfront capital, but you’ll also purchase existing inventory, clientele, and an online presence that you can grow.
FAQs on the most profitable businesses in Canada
What are the most profitable businesses in Canada?
Canada has a thriving economy that is built on small businesses. Some of the most profitable businesses include:
- Fintech
- Software development
- E-commerce
- Online education and e-learning
- Digital marketing agencies
- Business consulting
- Waste management services
- Pet-related businesses
- · Food trucks
What kind of online business is most profitable?
There are many different online businesses, each with their own significant potential for profits. The e-commerce model can be the most profitable. It is highly scalability, enabling you to expand with rising demand. E-commerce presents a fantastic opportunity for aspiring entrepreneurs, offering the potential for high profitability.
What small business has the highest profit margin?
Payroll and bookkeeping services have a high-profit margin in Canada. Businesses operating within this sector typically experience a substantial profit margin of 35%.
What is the easiest business to succeed in?
Launching an e-commerce business is relatively easy as it requires low start-up costs and it can be operated remotely.
Ready to start your journey into business ownership?
Starting or buying a business can be a risky yet rewarding journey. It’s essential to carefully consider two factors before launching a new business: funding and the skills required to manage the business efficiently.
Having adequate funding in place before you launch a business will help you maintain and run the business until it generates profits. You should also evaluate your skills and determine if they align with the market you are entering. This can help you identify potential areas for growth and improvement.
If you're considering starting a business, you can read through our start-up guides to understand what it will take to start a specific business. If you’re thinking of buying a business, you can browse through thousands of profitable businesses for sale in Canada in our site.
The world is waiting for your business, so let’s make sure you start your journey today!
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