California is a great place to start a business, with its huge population and pleasant climate. NerdWallet analyzed the data to find the industries where individual companies perform best in the Golden State. The best types of businesses to start in California include retail stores, salons and spas, educational businesses, e-commerce, and small-scale manufacturing. By number of employees, each of the top 10 industries on our list is smaller than the state median of 17.8 employees per company.
Real estate companies, with 4.5 employees per company, and personal care services, with 5.4 employees per business, had the lowest number of employees.The best business has high incomes and low payroll. Most companies struggle to generate high revenues while keeping payroll expenses under control. Those with higher incomes tend to have high-cost labor. The only exception is top-tier gas stations, which have been able to generate income with relatively cheap labor.When choosing the best business idea for you, it's important to consider factors such as average number of employees per company, revenue per employee, payroll cost per employee, cost per employee growth, revenue growth, OSHA citation penalty, and industry growth.
With one of the largest number of restaurants in the United States, California is a thriving market for the restaurant business. You'll need a considerable amount of capital when you start, but you have high returns.Bubble tea is another popular business idea in California. You have to choose a visible location followed by a good menu. By operating a bubble tea business, you will draw the attention of customers to the Taiwanese beverage in a retail environment.
The drink is incredibly popular in much of Asia, but it is still in the introductory stage in the United States. Here, it is finding increasing acceptance among a millennial trend-seeking audience, particularly in university settings.Clothing boutiques are also popular in California. Usually, a clothing boutique is much smaller than a regular clothing store and creates a more intimate atmosphere. Attract customers looking for very specific styles and types of clothing with your boutique.
Since many customers stick to their own styles, happy customers are likely to return to your business. It is important to establish relationships with these repeat customers, as their recommendations and satisfaction can contribute to the success of your boutique.Hookah lounges are also becoming increasingly popular in California. Also called hookah cafe, shisha bar or hookah den, a hookah lounge is a place where customers link to smoke shisha. This flavored tobacco is smoked through a pipe and can be shared by several people.
Hookah rooms may charge by time, by pipe, or by amount of tobacco. Normally, a hookah is shared between two and four people.The best types of businesses to start from home are those that can be done primarily online. Examples include e-commerce, educational services and consulting companies. Recruiting agencies help candidates find the most suitable job for them when they have many options.
On the other hand, in this fast-paced business scenario, companies struggle to carry out their hiring process; this is where hiring agencies come into play.If your company has employees or pays taxes separately from you, you must obtain a federal employer identification number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons to do so. Banks often require an EIN to open an account in the company's name, and other companies with which you do business may require an EIN to process payments.Small-scale manufacturing can be a good idea for a profitable business to start in California. The California Retail Association represents companies in this industry with information on government regulations, legislation and more.
The California Antique Dealers Association represents the interests of second-hand retail business owners.Property management is another good idea for a profitable business to start in California; offering several property management services can be very beneficial for your business success. If you are a car enthusiast and want to start a low-investment business, a car wash is undoubtedly one of the most profitable business ideas in California in the automotive industry.Once you've chosen the best business idea for you, determining an SEO strategy is essential to small business success; this type of high-quality service is in high demand especially in large cities.Small construction companies should also be very profitable businesses ideas in cities such as Los Angeles, San Francisco and San José; there are nearly 17500 landlords of real estate in California -the largest number of businesses within an industry on the Top 10 list.No matter what type of business you create, you should consider opening a separate business account to make it easier to track your income and expenses.