Aspiring entrepreneurs, investors, and small business owners work hard to ensure their company profits but thrives. But which industries are most likely to turn those efforts into maximum business profits?

Australia’s economy has been resilient after the pandemic, but the business landscape in 2025 is shaped by high interest rates, changing consumer behaviour and major policy reforms. According to the Australian Bureau of Statistics (ABS), total operating profits fell by 3.4% in 2023‑24 as energy‑intensive industries like mining saw profits pull back. Meanwhile, small businesses remain the backbone of the economy and make up more than 97% of all enterprises. Aspiring entrepreneurs and investors need to identify industries that not only offer strong profit margins, but also align with long‑term trends such as population ageing, decarbonisation and digital transformation.

This in depth report from the Business In Focus team isn’t your typical regurgitated list of 12 businesses to start in Australia. It uses data from the ATO small‑business benchmarks, ABS financial performance data, IBISWorld‑informed reports and major business publications to rank profitable industries, distinguish between high‑capital and low‑capital opportunities, and summarise macro trends influencing business viability in 2025 and beyond.

Profitability by Industry: Data‑Driven Ranking

The ABS Australian Industry release provides operating profit before tax (OPBT) by sector, while Money.com.au uses ABS data to calculate profit margins for 2022‑23. Table 1 ranks industries by OPBT (2023‑24) and profit margin (2022‑23). Mining continues to generate the highest absolute profit, but other sectors, particularly property operators, medical services and professional services deliver high margins.

Table 1 – Major industries by profitability

Industry (ANZSIC) OPBT, 2023‑24 (AUD m) Profit margin (2022‑23) & notes Key insights
Mining 176 772 m Oil and gas extraction (58.2%), non‑metallic mineral mining (49.4%) and coal mining (48%) had the highest margins. High capital and regulatory barriers; profits depend on commodity prices and decarbonisation policies.
Professional, scientific & technical services 72 579 m Profit margin ~23.9%, 83.6% of firms were profitable. Includes consultants, engineering and legal services. Demand is driven by digital transformation, cyber‑security and advisory work.
Construction 58 027 m Profit margin ~9.2%, but 79% of businesses were profitable. Residential and civil construction face material shortages; sustainability and infrastructure programs drive long‑term growth.
Rental, hiring & real estate services 43 345 m Property operators & real estate services recorded a 36.3% margin and 80.3% of firms were profitable. High margins come from asset appreciation and rental yields; capital intensive.
Wholesale trade 44 376 m Profit margin ~4%. Dependent on retail demand; margins thin but large volumes.
Transport, postal & warehousing 38 192 m Courier services have expense‑to‑turnover ratios between 40% and 89%, indicating margins between ~11% and 60%. Growth in e‑commerce driving demand for delivery and logistics; fuel costs and competition affect profitability.
Medical & other health care services – Profit margin 29.4% with 75% of firms profitable. Includes dental clinics, clinics and allied health services; benefits from ageing population and healthcare demand.
Finance & insurance services – Profit margin 25.3%, 77.9% of firms profitable. Strong margins due to lending spreads and wealth management fees; regulated sector.
Agriculture, forestry & fishing 12 424 m Profit margin ~17.5%; 71% of firms profitable. Capital‑intensive; exposed to climate, input costs and export markets.
Least profitable sectors – Exploration & mining support services (‑6.8% margin), water transport (‑0.9%), gambling activities (1.2%), private hospitals (1.4%) and telecom services (2%). These sectors face rising costs, heavy regulation or market disruption.

Observations

  • Mining remains the most lucrative in absolute terms. However, profit margins vary by commodity; oil and gas and non‑metallic mineral mining exceed 45 % margins, whereas exploration services operate at a loss.

  • Professional services, health services and real estate combine relatively high margins with a large share of profitable firms. These industries require professional qualifications but not heavy plant or machinery.

  • Transport and courier services have widely varying margins. ATO benchmarks show small courier businesses with turnover below AU$115k have average expenses of about 48% of turnover, implying margins near 52%. Larger operators face more competition and higher overheads.

  • Highly regulated sectors such as gambling, water transport and telecommunications have low or negative margins, highlighting the importance of market structure and regulation.

High‑Capital Business Opportunities

Some of the most profitable industries require significant upfront capital and specialist expertise. Investors seeking high returns should consider the following sectors.

Renewable Energy & Clean Tech

  • Booming investment: According to the Clean Energy Australia 2025 report, financial commitments to large‑scale renewable energy jumped from AU$1.5 billion in 2023 to AU$9 billion in 2024, the highest since 2018. The federal Capacity Investment Scheme aims to support 23 GW of generation and 9 GW of storage by 2030. In 2024 alone, 5.2 GW of new renewable capacity was added, with 3.2 GW from rooftop solar.

  • Policy incentives: The Small Business Energy Incentive allows SMEs to deduct the full cost of energy‑efficient equipment up to AU$100k per asset. Corporate power‑purchase agreements and net‑zero targets are spurring demand.

  • Opportunities: Solar panel installation, battery storage, electric‑vehicle (EV) charging infrastructure and green hydrogen projects. The Cockatoo Financial blog notes that a $2.1 billion wind farm approved in 2025 will power 1.2 million homes and create 1,500 jobs. These ventures require substantial capital but benefit from government grants, long‑term contracts and rising energy prices.

Mining and Resources

  • Mining generated AU$176.8 billion in profit before tax and includes some of the highest‑margin businesses (oil and gas extraction at 58.2%). Demand for critical minerals (lithium, nickel) and rare earths linked to EVs and renewable technologies drives investment. However, exploration services are loss‑making, illustrating that profit depends on asset quality and scale.

Property & Real Estate

  • Property operators and real estate services enjoyed a 36.3% margin, while 80% of businesses were profitable. Development and leasing require significant capital and exposure to interest rates, but profits come from asset appreciation, rental yields and development margins.

Health, Aged Care & Biotech

  • Demographic tailwinds: Australia’s population is ageing, and the National Disability Insurance Scheme (NDIS) supports more than 640,000 participants. The federal budget allocated an extra AU$3.4 billion for aged‑care workforce development.

  • Profitability: Medical and other health care services recorded a 29.4% margin. Dental practices’ total expenses to turnover range from 53% to 80% depending on turnover, implying margins of 20% to 47%. Growth areas include home‑care providers, allied health clinics, telehealth platforms and biotech startups – ViraGene raised AU$150 m for cancer diagnostics in 2024.

Technology, Cybersecurity & AI

  • Digitalisation boom: A 2025 digital economy strategy expands the Digital Solutions program and provides grants up to AU$50k for AI integration. About 23% of SMEs already use AI tools, including chatbots and automation.

  • Cybersecurity urgency: Cyber incidents grew 23% year‑on‑year, and 67% of incidents affected small businesses. New regulatory standards require advanced threat monitoring, creating demand for security services and software.

  • Opportunities: AI‑powered SaaS platforms, cybersecurity consultancies, cloud infrastructure and quantum computing solutions. These ventures require technical expertise and R&D investment but promise scalable returns.

Manufacturing & Advanced Manufacturing

  • While manufacturing’s profit margin (~5%) is moderate, policy initiatives such as the National Reconstruction Fund and supply‑chain resilience strategies are encouraging domestic production of pharmaceuticals, defence and renewable technology components. Investors with access to capital could benefit from government co‑investment and onshoring trends.

Low‑Capital Business Opportunities

Not every profitable business requires millions of dollars. Service‑based and digital businesses can offer attractive margins with modest start‑up costs.

Cleaning, Gardening & Home Services

  • Demand surge: BizCover’s survey of insurance requests showed Aged & disability care, cleaning and gardening had the highest volume of new small‑business enquiries in 2024. HelloLeaders links this growth to the ageing population and NDIS subsidies.

  • High margins: The ATO’s benchmark for building and industrial cleaning services shows total expenses as low as 43% of turnover for small businesses; margins can exceed 50%. For small plumbing and electrical businesses, average expenses are about 59% and 61% of turnover respectively, implying margins around 40%. Courier services have expenses around 48% of turnover for small operators.

  • Why it’s profitable: People dislike cleaning and prefer convenience. Cleaning services are highly profitable because busy professionals will pay a premium and startups can differentiate by offering eco‑friendly products.

Home‑Based Personal & Wellness Services

  • Mobile massage, wellness coaching and personal training require certifications but little equipment. Mobile services eliminate the cost of a physical studio and can be targeted at NDIS participants or busy parents. The same list includes health‑focused meal prep, virtual coaching and corporate wellness workshops.

  • Tutoring and education services benefit from the global online education market, projected to hit US$457.8 billion by 2026. Thanks to video‑conferencing tools, tutors can work from home; Lightspeed notes that startup costs are low because all that’s needed is a computer.

Consulting, Bookkeeping & Digital Services

  • Professional services have strong margins (23.9%) and high profitability rates. Solo consultants can offer marketing, IT, cybersecurity or business‑planning services. Entrepreneurs should position themselves as problem solvers rather than information providers.

  • Freelance writing and digital marketing can be operated remotely. The same article warns that writers who compete on price struggle; specialising in high‑demand niches (tech, finance) and leveraging LinkedIn helps command premium rates.

  • E‑commerce and dropshipping: The Australian online retail market exceeds AU$32 billion. Entrepreneurs can start niche e‑commerce stores, subscription boxes or online marketplaces with limited inventory by using dropship suppliers. However, competition is intense; differentiation and marketing are key.

Niche Pet Services & Hospitality Alternatives

  • Mobile pet grooming and pet sitting: Mobile pet care is a high‑margin, low‑overhead business. Targeting anxious pets or hypoallergenic grooming can justify premium pricing.

  • Food trucks and boutique catering: Lightspeed lists food trucks and cleaning companies among the most accessible businesses for beginners because they avoid the high costs of opening a restaurant and can scale gradually.

Macro & Policy Trends Influencing Profitability

The most profitable businesses align with macroeconomic and policy tailwinds. Key trends shaping Australia’s business environment in 2025 include:

  • Ageing population and care demand: The NDIS covers more than 640 000 participants and the government has funded aged‑care workforce development. Small businesses providing home‑care, allied health services, mobility aids and meal preparation will benefit.

  • Digital transformation and AI adoption: Roughly 23% of SMEs use AI tools, and the Digital Solutions program offers grants up to AU$50 k for AI integration. Demand for cybersecurity and digital marketing is rising as online retail turnover increases by 12.3% year‑on‑year and cyber incidents grow by 23%.

  • Green energy and sustainability: Consumers are increasingly willing to pay a premium for sustainable products – 73% express this willingness. Government incentives such as the small business energy deduction and large‑scale renewable projects support investment in clean tech and energy‑efficient equipment.

  • Regional growth and infrastructure spending: A AU$2.8 billion regional accelerator program and a AU$120 billion infrastructure pipeline provide subcontracting opportunities. Construction and trades that support these projects stand to benefit.

  • Access to capital: Alternative lending platforms grew 34% in 2024, and the instant asset write‑off remains at AU$20k for SMEs. These policies lower the cost of investing in equipment and technology.

Guidance for Different Entrepreneurs

Solo founders and side‑hustlers

  • Focus on low‑capital, service‑based niches with high margins and recurring revenue. Cleaning, gardening, mobile wellness services, tutoring, bookkeeping and digital marketing require minimal upfront investment yet benefit from demographic and digital trends. Use online tools to acquire clients and manage operations.

  • Differentiate your offering: Provide eco‑friendly products, specialise in niche markets (e.g., seniors, NDIS participants or anxious pets) and build personal relationships for customer retention.

  • Leverage government programs: Apply for digital adoption grants and energy‑efficiency deductions to reduce costs.

Investor‑backed startups and growth‑oriented ventures

  • Target high‑capital sectors like renewable energy, property development, biotech and advanced manufacturing. These sectors have high barriers to entry but benefit from government incentives, increasing demand and potential economies of scale.

  • Partner with experts and secure long‑term contracts: Renewable projects often rely on power‑purchase agreements and government schemes; biotech requires partnerships with universities and hospitals. Conduct due diligence to avoid exploration‑stage losses in mining.

  • Invest in digital and AI solutions: Develop SaaS platforms, cybersecurity services and automation tools. Support from the Digital Solutions program and growing demand for security and analytics make this a high‑growth space.

Conclusion

Profitability in 2025 depends not only on margins but also on aligning with structural trends such as decarbonisation, population ageing and digitalisation. Mining, professional services, real estate and health services currently deliver the highest margins, but capital requirements and regulatory risks vary. Renewable energy, clean tech, biotech and AI offer substantial long‑term opportunities for investors with significant capital. Cleaning, personal care, tutoring, pet services and online consulting provide low‑capital entry points with healthy margins, especially when tailored to niche client needs. By combining data from the ABS, ATO benchmarks, Money.com.au and industry reports, entrepreneurs can make informed decisions about where to deploy their time and resources in the years ahead.

Sources:
https://www.abs.gov.au/statistics/industry/industry-overview/australian-industry/latest-release

https://www.money.com.au/research/australian-business-statistics

https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/small-business-benchmarks/benchmarks-a-z