By Contributor Melissa Houston
5 Businesses With The Highest Profit Margins In 2025
When it comes to starting a business, revenue gets all the attention but profit is what actually builds wealth. You can make a million dollars in sales and still be broke if your expenses eat it all up. That鈥檚 why smart entrepreneurs focus on one key metric from the start: profit margins.
Profit margins tell you how much of your revenue you keep after covering costs. And while some business models struggle to stay afloat with thin margins, others generate serious income with low overhead.
Why Profit Margins Matter
Profit margin matters because it鈥檚 the money you keep. It鈥檚 easy to get caught up in flashy revenue numbers, but if most of that money goes right back out the door in expenses, your business isn鈥檛 truly profitable. A high profit margin means your business is efficient, sustainable, and has the potential to generate real wealth. Generally, a net profit margin of 20 percent or more is considered strong, though this can vary by industry.
Some businesses, like grocery stores or product-based retailers, operate on razor-thin margins, sometimes as low as 2 to 5 percent because of high overhead and fierce pricing competition. Others, like software or consulting, can soar with margins well over 50 percent because they have low operating costs and can charge premium prices. The difference comes down to how much it costs you to deliver your product or service and how much pricing power you have.
The key drivers of profitability include low overhead costs, scalable models that don鈥檛 require trading time for money, and the ability to charge more than it costs to deliver. When you find a business model that checks all three boxes, you鈥檙e not just running a business; you鈥檙e building a money-making machine.
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Let鈥檚 explore the five businesses with the highest profit margins:
1. Software as a Service (SaaS)
SaaS businesses enjoy incredibly high profit margins (often between 70 and 90 percent) thanks to low distribution costs and scalable, subscription-based models. Ideal for tech-savvy founders, SaaS allows you to build once and sell repeatedly with predictable recurring revenue.
2. Online education and digital products
Online education and digital products offer profit margins between 60 and 85 percent, with minimal overhead since there鈥檚 no inventory or shipping involved. Once created, products like courses, ebooks, and templates can be sold repeatedly, making this model ideal for creators who can build and market an engaged audience.
3. Financial services
Financial services and advisory businesses like fractional CFO services or consulting typically see profit margins between 50 and 75 percent due to their high-value, low-overhead nature. They鈥檙e especially suited for experienced professionals leaving corporate roles, with opportunities to scale through retainers, group programs, or digital offerings.
4. High-end coaching and mentorship
High-end coaching and mentorship businesses can achieve profit margins of 50 to 80 percent, driven by premium pricing and low delivery costs. This model works best for experts or thought leaders with a strong personal brand and a clearly defined niche.
5. Luxury beauty or skincare brands
These brands often enjoy profit margins of 40 to 70 percent, thanks to high markups and direct-to-consumer sales. Success in this space depends heavily on standout branding, premium packaging, and a compelling brand story that builds loyalty and trust.
What these high-profit businesses have in common is a powerful combination of lean operations, strong pricing power, scalable delivery models, and high perceived value. They keep costs low, often by minimizing inventory, overhead, or labor, while charging premium prices for offerings that customers see as valuable. Most importantly, their models allow for growth without a proportional increase in expenses, which means more money flows to the bottom line as they scale.
The bottom line is that when you want to build a business that generates wealth, you need to consider profit margins. The businesses with the highest profit margins share common traits that make them efficient, scalable, and financially rewarding. Focusing on profitability from day one will set you up for long term success.
Melissa Houston, CPA is the author of Cash Confident: An Entrepreneur鈥檚 Guide to Creating a Profitable Business and the founder of She Means Profit.
She Means Profit is dedicated to advancing women entrepreneurs with the financial education, strategic coaching, and business resources they need to break financial barriers, scale profitably, and build sustainable wealth. Our mission is to increase the number of women-owned businesses generating $1 million+ in revenue, ensuring that more women achieve financial independence and long-term success.
The opinions expressed in this article are not intended to replace any professional or expert accounting and/or tax advice whatsoever.
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