10 Most Profitable Businesses in 2021

In this article, we will take a look at the 10 most profitable US companies in 2021. You can skip our detailed analysis of the business industry and go directly to 5 Most Profitable Businesses in 2021.

With the pandemic of 2020 wreaking havoc on businesses and even entire industries in a matter of days, it is altogether too soon to predict the success, or lack thereof, of businesses and industries in 2021. However, given current circumstances and the business environment, the following businesses have been identified as the most profitable in the United States for the year 2021. The analysis has been conducted on the basis of the business environment in the US, the prevalence of periodic COVID-19 outbreaks, and the long-term prospects of the businesses.

With this context and industry outlook in mind, let’s start our list of the 10 most profitable US companies in 2021.

10. Tutoring Business

The majority of schools and colleges in the United States are offering online classes instead of allowing students to attend classes on campus due to the prevalence of the COVID-19. The tutoring business is especially profitable during the COVID-19 pandemic as students do not understand their lessons sufficiently via remote learning. Startups such as TeacherPod were solely designed to meet the students’ rising demand for tutors. Moreover, tutoring companies based in the United States such as Chegg and Club Z! Inc., have been thriving.

Tutoring businesses in the United States may specialize in one, or more, of the following:

  • Natural Sciences
  • Foreign Languages
  • Mathematics
  • History
  • English
  • College Essay preparation
  • Entrance Tests preparation
  • Management Sciences

As these tutoring services would undoubtedly be offered exclusively using video software, the startup costs for such business would be low. Moreover, the operating costs of the business would be low, as most aspects of the business would be service-oriented instead of product-oriented and fixed costs would most likely be limited to the cost of internet data and any software that the business would use. Tutoring services would be profitable both on small and large scales. The tutoring business may even consist of one or two people entirely, making the margins extremely high. As many students required tutors even before the COVID-19 outbreak, the tutoring business would flourish even after the pandemic has passed. Depending on the level of education of the tutors, the revenue earned by each tutor could be up to $56 per hour. It is hence no wonder that the size of the online tutoring industry in the US for the year 2021 is $1.3 billion with a growth of 10.2% since 2016.

9. Fitness Business

Even though gyms and all kinds of indoor fitness centers had been closed due to the impact of the COVID-19, the fitness industry has managed to flourish. The annual revenue of the industry is $27.6 billion in the United States, notwithstanding the boost in the business due to the COVID-19 restrictions. One of the most noteworthy names in the fitness industry includes Nike (NYSE: NKE), which reported a 3% increase in revenue to $10.4 billion in 2021. Moreover, the stock price of Nike increased by 57.76% in the past 12 months. Furthermore, Peloton (NASDAQ: PTON) is another fitness business that is becoming increasingly profitable. The revenue of Peloton surged 128% in 2021 to $1.06 billion from $466.3 million in 2020. The company’s share similarly increased by 319.56% in the past year.

Bloomberg revealed in their study that 54% of gym subscribers had either frozen or cancelled their memberships due to the risk of contracting the virus in gyms and fitness studios. Instead, virtual workouts were perceived by the public as the perfect alternative to in-studio workouts. The fitness booking platform Mindbody reported a 30% increase in subscribers in the beginning of 2021.  Moreover, around half of the subscribers were for yoga, signifying that emotional, spiritual, and mental fitness had become as significant to the subscribers as physical fitness.

Due to the coronavirus and the consequent social distancing, virtual fitness classes have become popular as 46% of virtual subscribers of Mindbody intended to continue with their virtual fitness classes even after the pandemic was over. However, fitness companies such as Gold’s Gym, Planet Fitness Inc. (NYSE: PLNT) and 24-hour Fitness which did not adapt to the changing business environment during the COVID-19 lockdown suffered heavy losses. Specifically, Gold’s Gym was forced to permanently close 50% of its locations while 24-hour Fitness closed down 30% of its locations according to EisnerAmper.

8. Delivery Business

The delivery business has been growing ever since the first restaurant in the United States offered to transport their goods to customers’ homes. As the demand for such services grew, so did the supply, with more and more restaurants and businesses offering to deliver goods to their customers. Since the 2020 pandemic, the delivery business has grown massively, as people strongly prefer to stay safe indoors while all their purchased items, from groceries to medicines, are delivered to them securely. Even after the pandemic is over, the convenience of receiving ordered goods at home will not be any less desired by the US population. While food delivery services alone generated a revenue of $26.5 billion by the end of 2020, the demand for goods delivery is expected to surge even higher in the near future.

Related: 10 Best Food Delivery Stocks to Buy in 2021

Doordash (NYSE: DASH) is one of the most successful companies in the food delivery business. The company’s revenue grew by 241% in 2020, from $850 million to $2.9 billion. Doordash has 18 million active users in 2021, and controls 45 percent of the US food delivery market.

The competition is high in the delivery business, as there are quite a few businesses whose operations solely consist of collecting and deliveries goods, with not many factors differentiating between them. Many delivery companies have been introduced since the beginning of the pandemic and have been highly profitable since. Although the margins of the delivery service industry are low on average, some companies charge higher rates for shorter delivery times and for larger packages in addition to their standard charges.

7. Digital Marketing Business

The occurrence of technological advancements and the adoption of those advancements worldwide confirm that the digital age has arrived. With digital services such as e-commerce, e-learning, and e-banking becoming mainstream in the US, marketing is also becoming digitalized. In fact, the digital marketing business is all set to be one of the most profitable in the United States for the year 2021. With customers shifting increasingly from physical platforms and markets to digital markets, businesses need to make their presence known in their customers’ localities.

As hundreds of new startups emerge in the USA each year, there can never be too many digital marketing agencies that cater to the businesses. Moreover, new digital marketing companies would undoubtedly even give the emerging startups a better chance of their survival, making the digital marketing business a highly profitable one. With a market size of $17.2 billion, and a growth of 4.4% from 2020 to 2021, the digital marketing industry is booming. In the future, too, the industry’s prospects look promising, as it creates more jobs with a range of services. Digital marketing agencies may offer services such as web design, content creation, content writing, SEO, social media advertising, and social media management. With high margins, and ever-increasing demand, the digital marketing business is one of the most profitable in the US at present.

6. App Development Business

As coronavirus forced businesses to close their physical operations, companies raced to increase their digital footprint and capture millions of potential customers online that are spending several hours daily on their smartphones. Data from apps platform App Annie shows that over 33 billion new apps were downloaded just in the third quarter of 2020 and a whopping $28 billion was spent in apps, a 20% increase when compared to the same period last year.  In order to be present in the virtual world of the internet, businesses turn to app developers to establish their digital presence. There exists a great need of businesses to build their customer apps that their customers can download, hence a great demand for app developers has emerged.

As app development does not require certification or any physical location, there is very less competition and therefore low barriers to entry for the app development business. Although, according to reports by IBIS World, there are currently 1,321 app publishing businesses operating in the United States, the competition does not discourage new app developers due to the low initial investment and sizable margins that the business can generate. The market size for the app development industry in the US is currently $31 billion, with an average growth of 7.5% annually, making it one of the most profitable businesses in the United States.

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Disclosure: None. 10 Most Profitable US Companies in 2021 is originally published on Insider Monkey.