Welcome to our comprehensive guide on statistics related to industries for LLCs.
Key Takeaways
- LLCs in the technology, healthcare, and retail industries tend to be the most popular.
- Women-owned LLCs are on the rise, particularly in the healthcare and professional services industries.
- LLCs in the real estate and construction industries have higher profit margins but also face more legal risks.
- Keeping up with industry trends and innovation is crucial for LLC success.
- Avoid common mistakes such as not having a solid business plan or underestimating competition.
In this article, we will provide you with valuable insights and information regarding:
- The most common industries or sectors represented by LLCs
- The most profitable industries or sectors for LLCs based on revenue and growth rate
- The impact of industry trends, competition, and innovation on LLC performance and success
- The most common mistakes made by LLCs in different industries and how to avoid them.
As a business owner or entrepreneur looking to start a Limited Liability Company or grow your existing one, it’s crucial to have a solid understanding of these statistics.
This knowledge can help you make informed decisions about which industry or sector to focus on and how to position yourself for success within that space.
Table of Contents
So whether you’re just starting out or looking to improve your current LLC’s performance, keep reading to learn more about the statistics related to industries for LLCs.
What are the Most Popular Industries and Sectors for LLCs?
As an entrepreneur or business owner, choosing the right industry or sector to focus on for your LLC can make a significant impact on your success.
In this section, we will explore the most common industries or sectors represented by LLCs and provide insight into their performance as LLCs.
By gaining a deeper understanding of these industries, you can better position yourself for success and make informed decisions about where to invest your time and resources.
Source: Census.gov 2020 County Business Patterns: U.S. & states, NAICS sectors, legal form of organization (LFO)
Let’s have a look at exactly what each of these industries and sectors really are in more detail..
Professional, Scientific, & Technical Services - 16.73%
The Professional, Scientific, and Technical Services sector is made up of businesses that provide professional, scientific, and technical services to others.
These services require a lot of expertise and training. Businesses in this sector specialize in different areas and provide services to clients in different industries, and sometimes to households.
These services include things like legal advice and representation, accounting and payroll services, engineering and design services, computer services, consulting, research, advertising, photography, translation, interpretation, and veterinary services.
Notable companies in this sector include Deloitte, McKinsey & Company, Accenture, Apple, Google, and Microsoft.
Construction - 14.21%
The construction industry is all about building, fixing, and maintaining things like roads and buildings.
It’s important for a country’s development and sustainability.
But, it also creates a lot of waste.
This chapter talks about the different kinds of waste the construction industry produces and where it comes from.
It also suggests ways to make less waste in the first place.
Some well-known construction companies include Bechtel Corporation, Fluor Corporation, and Kiewit Corporation.
Health Care and Social Assistance 11.37
The Health Care and Social Assistance sector helps people with their health and social needs.
Some places in this sector only provide medical care, while others provide both medical care and social assistance.
Some only provide social assistance.
People who work in this sector are trained professionals.
They have the skills to help you with your health or social needs.
Different industries in this sector are based on the education of the people who work there.
Some notable healthcare companies include Johnson & Johnson, Pfizer, and UnitedHealth Group.
Retail Trade - 10.47%
The Retail Trade sector includes businesses that sell stuff and offer services related to selling stuff.
Retailers sell things to regular people in small quantities.
There are two types of retailers: store and nonstore.
1. Store retailers have physical locations that attract a lot of customers.
They advertise using TV, radio, and newspapers.
They sell things to people for personal or household use, and sometimes to businesses too. Some store retailers also offer services like repairs.
2. Nonstore retailers sell things to the public too, but they don’t have physical locations.
Instead, they use methods like infomercials, catalogs, and door-to-door sales to reach customers.
Some examples of well-known retail companies include Walmart, Amazon, and Target.
Accommodation & Food Services - 7.46%
The Accommodation and Food Services sector includes businesses that provide a place to stay and food to eat.
This sector includes places that offer both lodging and food because they’re often found together.
Some notable accommodation and food services companies includes hotels, restaurants, and catering companies like Marriott International, Hilton Worldwide Holdings Inc., and Yum! Brands Inc.
Other Services (excluding Public Administration) - 6.82%
The Other Services sector includes businesses that provide services not covered by other categories.
This sector includes companies that repair equipment and machinery, religious organizations, charities, and businesses that provide cleaning, laundry, personal care, pet care, photo printing, temporary parking, and dating services.
Administrative, Support, Waste Management & Remediation Services - 6.08%
The Administrative and Support and Waste Management and Remediation Services sector includes businesses that help other organizations with everyday tasks.
Many businesses do these tasks themselves, but some hire others to do them.
The businesses in this sector specialize in different tasks and serve clients in many industries, and sometimes even households.
The tasks include things like office work, hiring people, preparing documents, cleaning, and getting rid of waste.
Some notable administrative and support services companies include ADP, Cintas, and Securitas AB.
Real Estate and Rental and Leasing - 5.81%
The Real Estate and Rental and Leasing sector includes businesses that rent or lease things to others, like real estate and equipment.
It also includes businesses that manage, buy or sell real estate for others.
This sector is made up of three main industries: real estate rentals (including REITs), equipment rentals (like cars and computers), and rentals of non-copyrighted things.
Some notable real estate companies include CBRE Group, Jones Lang LaSalle, and Simon Property Group.
Wholesale Trade - 4.79%
The Wholesale Trade sector sells stuff in large quantities without changing it.
They also provide services to help sell the stuff.
The stuff they sell comes from farming, mining, manufacturing, and publishing.
Wholesalers sell to other businesses, not to regular people.
They work from a warehouse or office, not a store.
They don’t usually advertise to the public.
Customers find them through phone calls, meetings, or special ads.
They keep selling to the same customers over time.
Some notable wholesale trade companies include Sysco Corporation, McKesson Corporation, and Cardinal Health.
Finance & Insurance - 4.07%
The Finance and Insurance sector includes businesses that do financial stuff, like moving money around and selling insurance.
There are three main types of activities:
- Businesses that take money from people and use it to make loans or buy investments.
This is called financial intermediation.
- Businesses that sell insurance and collect money from people to cover potential losses.
They invest that money and use it to pay out claims.
- Businesses that help other businesses with financial stuff, insurance, and employee benefits.
The people who control the money supply are also included in this sector.
Some examples of well-known finance and insurance companies include JPMorgan Chase, Berkshire Hathaway, and Goldman Sachs.
Manufacturing - 3.78%
The Manufacturing sector makes new things by changing materials or substances.
They use machines and equipment to do this.
Some places make things by hand or in a worker’s home, like bakeries or custom tailors, and they are also part of this sector.
Manufacturing places can make things themselves or have someone else do it for them.
Some notable manufacturing companies include General Electric, Ford Motor Company, and Boeing.
Transportation & Warehousing - 3.54%
The Transportation and Warehousing sector includes businesses that move people or things, store goods, provide scenic tours, or help with transportation.
They use different types of transportation equipment depending on whether they’re traveling by air, rail, water, road, or pipeline.
Some examples of well-known transportation and warehousing companies include FedEx, UPS, and Union Pacific Corporation.
Arts, Entertainment, and Recreation - 1.92 %
The Arts, Entertainment, and Recreation industry has lots of different businesses that offer things to do for fun.
This includes places that put on shows or events, places that have historical or educational things to see, and places where you can do activities or hobbies.
Some businesses that offer these things are in other industries.
Prime examples of well-known arts and entertainment companies include Disney, Sony, and WarnerMedia.
Information - 1.29%
The information sector has many parts, like companies that make software or publish books online, plus movie and music makers, TV and radio stations, phone and internet companies, and businesses that help us find things online.
This sector has three types of companies:
(1) those that make and share information and cultural products,
(2) those that help us send and get these things, plus data and messages, and
(3) those that work with data.
Notable companies in this industry include Google and Facebook.
Educational Services - 1.16%
The Educational Services sector includes places that teach a lot of different things.
These places can be schools, colleges, universities, or training centers.
They can be run by people who want to make money or by the government.
Sometimes they also offer food and housing.
Teachers or instructors explain things and help students learn.
You can learn in many different places, like at school, work, or even at home using the internet.
Sometimes they even use simulators to help you learn.
Teachers can also adapt to students’ needs, like using sign language for students who can’t hear.
All of these places have one thing in common: they use teachers who know what they’re talking about to help you learn.
Some examples of well-known educational services companies include Pearson Education, Apollo Group, and DeVry Education Group.
Agriculture, Forestry, Fishing, & Hunting - 0.35%
The Agriculture, Forestry, Fishing and Hunting sector includes places where people grow crops, raise animals, cut down trees for wood, and catch fish and other animals from a farm, ranch, or the wild.
These places are called farms, ranches, dairies, greenhouses, nurseries, orchards, or hatcheries.
A farm can be one piece of land or many separate pieces of land.
Sometimes the land is owned by the farmer and sometimes it’s rented.
The farm can be run by the farmer alone, with family members or employees, or by a business.
If a landowner has tenants or renters who farm the land, that land is also considered a farm.
Some popular agriculture, forestry, fishing, and hunting companies include Archer Daniels Midland Company, Tyson Foods, and Weyerhaeuser Company.
Management of Companies and Enterprises - 0.27%
The Management of Companies and Enterprises sector includes two types of businesses.
The first type owns a controlling interest in other companies or influences their decisions.
The second type manages the operations of a company, including planning and decision-making.
These businesses perform important tasks that are usually done by other companies.
By doing all these tasks in one place, they save money. Source
Mining, Quarrying, and Oil and Gas Extraction - 0.26%
The Mining industry involves getting minerals out of the ground, like coal and oil.
It includes things like digging mines and drilling wells, as well as processing the minerals to make them useful.
Some examples of well-known mining, quarrying, and oil and gas extraction companies include ExxonMobil, Chevron Corporation, and Freeport-McMoRan.
Industries not classified - 0.05%
This sector includes all other businesses which don’t fit into any of the other categories in our list.
Utilities - 0.04%
The Utilities sector provides important services like electricity, gas, steam, water, and sewage removal.
The specific activities provided by each utility vary:
Electricity involves making, sending, and delivering power;
Gas involves delivering it;
Steam involves making and/or delivering it;
Water involves cleaning and delivering it;
Sewage removal involves collecting, cleaning, and disposing of waste through sewers and treatment facilities.
Most Profitable Industries and Sectors for LLCs, Based on Revenue and Growth Rate
As an LLC owner or potential entrepreneur, understanding which industries are the most profitable can help you make informed decisions about where to invest your time and resources.
In the following section, we’ll explore some of the most profitable industries or sectors for LLCs based on revenue and growth rate.
It’s important to keep in mind that profitability can vary depending on a variety of factors, including market demand, competition, and economic conditions.
The average revenue and growth rates listed from each industry are from the top 5000 companies included in the data provided by the Inc. 5000, dataset.
With that said, let’s dive into the top-performing industries.
Construction:
Average revenue: $28.7 million Average growth rate: 491%
The construction industry has seen a surge in demand due to increased infrastructure spending, urbanization, and the need for affordable housing.
The COVID-19 pandemic has also led to an increase in home renovation and remodeling projects as people spend more time at home.
Government Services:
Average revenue: $28.5 million Average growth rate: 468%
The government services industry has experienced growth due to increased demand for public safety and security measures, as well as the need for administrative support services.
Government contracts have also played a role in supporting the growth of this industry.
Financial Services:
Average revenue: $27.9 million Average growth rate: 453%
The financial services industry has experienced growth due to the increasing adoption of digital banking and financial technology (fintech) solutions, as well as the rise of cryptocurrency and blockchain technology.
Energy:
Average revenue: $27.6 million Average growth rate: 448%
The energy industry has seen growth due to increased demand for renewable energy sources and sustainable practices, as well as advancements in energy storage technology.
Advertising & Marketing:
Average revenue: $27.0 million Average growth rate: 440%
The advertising and marketing industry has experienced growth due to the increasing use of digital and social media platforms for advertising campaigns, as well as the rise of influencer marketing.
Logistics & Transportation:
Average revenue: $26.8 million Average growth rate: 434%
The logistics and transportation industry has seen an increase in demand due to the rise of e-commerce and online shopping, as well as the need for efficient supply chain management in response to disruptions caused by the COVID-19 pandemic.
Security:
Average revenue: $26.4 million Average growth rate: 430%
The security industry has experienced growth due to increased demand for cybersecurity measures and physical security services, as well as the need for emergency management and disaster response planning.
Software:
Average revenue: $24.8 million Average growth rate: 422%
The software industry has seen growth due to the increasing use of automation and artificial intelligence in various sectors, as well as the rise of cloud computing and software-as-a-service (SaaS) models.
Food & Beverage:
Average revenue: $23.5 million Average growth rate: 414%
The food and beverage industry has experienced growth due to increased demand for healthy and organic food options, as well as the growing popularity of meal delivery services and food subscription boxes.
Healthcare:
Average revenue: $22.4 million Average growth rate: 408%
The healthcare industry has seen growth due to the aging population and increased demand for healthcare services, as well as advancements in medical technology and telemedicine solutions in response to the COVID-19 pandemic.
Impact of Industry Trends, Competition, and Innovation on LLC Performance and Success
As an LLC owner or potential entrepreneur, it’s important to keep up with industry trends, competition, and innovation.
These factors can significantly impact the success and performance of your business.
In this section, we’ll explore how industry trends, competition, and innovation can affect LLC success and offer some tips on how to stay ahead of the curve.
Trends
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80% of businesses fail because of a lack of market demand for their product or service. Source
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42% of small businesses fail because of a lack of market need for their product or service. Source
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The most common reason for small business failure is poor cash flow management, which accounts for 29% of all failures. Source
Competition
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42% of small business owners say that their biggest challenge is dealing with competition. Source
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Small businesses in the US face an average of 29 competitors. Source
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The top reason customers switch to a competitor is poor customer service, according to 82% of consumers. Source
Innovation
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66% of small business owners say that innovation is important for their business. Source
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Only 21% of small businesses have implemented artificial intelligence (AI) technology in their operations. Source
Most Common Mistakes Made by LLCs in Different Industries and How to Avoid Them
Starting and running an LLC is not easy, but avoiding common mistakes can help increase the chances of success.
In this section, we’ll explore some of the most common mistakes made by LLCs in different industries and provide tips on how to avoid them.
By learning from the experiences of others, you can position your LLC for growth and long-term success.
Retail
One common mistake made by LLCs in the retail industry is choosing bad partners.
It’s important to do your due diligence and research potential partners thoroughly to ensure they align with your values and business goals. Source
Healthcare
Poor understanding of the healthcare ecosystem **can be a major mistake made by LLCs in the healthcare industry.
This can lead to missed opportunities or poor decision-making when it comes to things like reimbursement, regulatory compliance, and patient care. Source
Technology
Forgetting to comply with industry regulations can be a major mistake made by LLCs in the technology industry.
Unfortunately, the consequences of noncompliance can be severe, including fines, lawsuits, and damage to your company’s reputation. Source
Construction
A common mistake made by LLCs in the construction industry is jumping into jobs without a plan.
This can lead to cost overruns, delays, and unsatisfied customers. Source
Real Estate
Not having a strategy can be detrimental for new real estate investors.
It’s important to have a clear investment strategy in place to avoid making costly mistakes, such as investing in the wrong type of property or in a location that lacks demand. Source
Professional Services
Not taking the time to build a strong brand identity can be a major mistake made by LLCs in the professional services industry.
Having a strong brand identity can help differentiate your business from competitors and attract new clients. Source
Food and Beverage
In the food and beverage industry, one common mistake made by LLCs is failing to meet regulations and standards.
This can lead to food safety issues, legal problems, and damage to your business’s reputation. Source
Finance and Insurance
In the finance and insurance industry, one common mistake made by LLCs is letting emotions cloud their judgment.
This can lead to poor decision-making, risky investments, and a lack of objectivity. Source
Manufacturing
Assuming your product or systems will work according to what you have in mind is all too common for business owners in the manufacturing industry.
This can lead to a lack of preparedness for unexpected downtime, which can be costly in terms of both time and money. Source
Arts and Entertainment
Forgetting to develop a detailed business plan can be a major mistake made by LLCs in the arts and entertainment industry.
This can lead to a lack of direction and focus, making it difficult to achieve your goals and grow your business. Source
In Summary…
As an LLC owner or potential entrepreneur, staying up to date on industry trends, competition, and innovation is crucial for the success of your business.
By learning from the experiences of other LLCs in your industry and avoiding common mistakes, you can position your business for growth and long-term success.
The information outlined in this article provides valuable insights into the top industries for LLCs, how industry trends, competition, and innovation can impact LLC performance and success, and the most common mistakes made by LLCs in different industries.
By using this information to inform your business decisions, you can increase your chances of success and avoid costly mistakes.
Don’t hesitate to seek professional advice when necessary and stay informed about updates in your industry.
If you’re looking for additional guidance or support with starting or running your LLC, schedule a consultation call with Business Initiative today or use our contact form to get in touch.
And don’t forget to subscribe to our newsletter and follow us on Twitter for more valuable insights and resources!
FAQs - Frequently Asked Questions About LLCs in Various Industries
How do industry trends impact LLC performance?
Industry trends can significantly impact the success of an LLC.
Learn more...
For example, poor cash flow management is a common reason for small business failure and can be influenced by changing industry trends. It's important to stay informed about market demand and adapt your business strategy accordingly.
What are some common mistakes made by LLCs and how can I avoid them?
Common mistakes made by LLCs include poor cash flow management and not having a strong online presence.
Learn more...
Businesses should invest in social media marketing and e-commerce platforms to avoid not having a strong online presence or work with a lawyer to create comprehensive contracts that outline all expectations and requirements to avoid issues with clients.
In addition to these, there are specific mistakes that are more prevalent in different industries such as not conducting thorough due diligence before purchasing a property in real estate or not having proper licensing and certifications in finance and insurance.
How does competition affect small businesses?
Competition is one of the biggest challenges faced by small businesses.
Small businesses face an average of 29 competitors in the US alone, according to SmallBizGenius.net.
Poor customer service is also cited as a top reason customers switch to competitors.
How important is innovation for small businesses?
Innovation can be a key factor in the success of a small business.
Small businesses that prioritize innovation are 1.5 times more likely to experience revenue growth than those that do not, according to Forbes.
How has the COVID-19 pandemic impacted small businesses?
The COVID-19 pandemic has had a significant negative impact on small businesses.
Learn more...
According to CNBC, 86% of small businesses have been negatively impacted by the pandemic and nearly 60% of business closures are now permanent, as reported by Yelp.
How can I stay ahead of industry trends, competition, and innovation?
To stay ahead of industry trends, competition, and innovation, you should regularly monitor market conditions and customer preferences to identify emerging opportunities or potential threats.
Learn more...
Conducting market research, attending industry events, and networking with other professionals can help you gain valuable insights that inform your strategic decisions.
Prioritizing innovation is also crucial, as businesses that prioritize it are 1.5 times more likely to experience revenue growth than those that do not.
What factors contribute to small business failure?
Lack of market demand and poor cash flow management are two of the more common factors.
Learn more...
Small businesses often fail due to a lack of market demand for their product or service (80% of businesses fail for this reason) and poor cash flow management, which accounts for 29% of all failures.
Staying informed about market demand, managing finances effectively, and seeking professional advice when necessary can help mitigate these risks.
How can I improve customer retention in the face of competition?
Focus on providing excellent customer service.
Learn more...
Improving customer retention in the face of competition requires a focus on providing excellent customer service, as 82% of consumers report that they switch to a competitor due to poor customer service.
Engaging with customers through multiple channels, responding promptly to inquiries or complaints, and personalizing the customer experience can help build loyalty and reduce churn.
What steps should I take to protect my LLC's intellectual property?
Obtain patents and trademarks and monitor your content for infringement.
Learn more...
Protecting your LLC's intellectual property involves obtaining patents for inventions, registering trademarks for brand names or logos, and ensuring that any copyrights are properly registered.
Regularly monitoring the market for potential infringements is also important, as well as taking appropriate legal action if necessary to enforce your rights.
Research and Methodology
The information presented in this article was gathered from reputable sources such as Government websites like the Bureau of Labor Statistics and the U.S. Census.
There are also a few verified companies like Forbes, Investopedia, NAR, CNBC, and Small Biz Genius, etc.
All of the sources and information provided in this article was chosen due to their reputation for providing accurate and trustworthy information on business-related topics.
To ensure the quality of the information presented in this article, multiple sources were consulted for each point made.
Additionally, sources were cross-referenced to verify their credibility and accuracy.
The statistics and data presented in this article are based on research conducted by reputable organizations such as U.S. Census and Inc.com.
These organizations are known for conducting thorough research on small business trends and statistics.
Overall, the information presented in this article is based on a combination of expert analysis and reliable data sources.
By using a variety of credible sources, we aim to provide readers with a comprehensive understanding of the top industries for LLCs, how industry trends can impact LLC performance and success, common mistakes made by LLCs in different industries, and tips for avoiding these mistakes.
For every piece of information in the article, a direct link to the source is provided.
