Which industries were hardest-hit in 2010? Which fared the best? According to financial software company Sageworks' analysis of net profit margins and sales of tens of thousands of private companies in 97 industries, ranging from construction to health care, the answers aren't surprising: Commercial contractors and building materials suppliers were among the biggest losers while law firms and medical clinics beat pre-recession levels. What is perhaps surprising, though, were a few of the biggest gainers: day-care centers and funeral homes. Will Boland, acting chief administrative officer at Sageworks, says parents needing to take an additional job to make ends meet likely led to the increase at day cares. He adds that they, like funeral homes, have yet to hire more workers post-recession. Flip through this slide show for snapshots of the 10 industries with the lowest profit margins in 2010 and the 10 industries with the highest margins.

Note: We used Sageworks private company data for profit margins and sales; we used 2007 Census data (the most recent available) for the total number of firms and people employed in each industry.
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Which industries were hardest-hit in 2010? Which fared the best? According to financial software company Sageworks' analysis of net profit margins and sales of tens of thousands of private companies in 97 industries, ranging from construction to health care, the answers aren't surprising: Commercial contractors and building materials suppliers were among the biggest losers while law firms and medical clinics beat pre-recession levels. What is perhaps surprising, though, were a few of the biggest gainers: day-care centers and funeral homes. Will Boland, acting chief administrative officer at Sageworks, says parents needing to take an additional job to make ends meet likely led to the increase at day cares. He adds that they, like funeral homes, have yet to hire more workers post-recession. Flip through this slide show for snapshots of the 10 industries with the lowest profit margins in 2010 and the 10 industries with the highest margins.

Note: We used Sageworks private company data for profit margins and sales; we used 2007 Census data (the most recent available) for the total number of firms and people employed in each industry.
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Most and Least Profitable Business Types

Tracking 2010 Profit Margins in 97 Industries
Tracking 2010 Profit Margins in 97 Industries
Which industries were hardest-hit in 2010? Which fared the best? According to financial software company Sageworks' analysis of net profit margins and sales of tens of thousands of private companies in 97 industries, ranging from construction to health care, the answers aren't surprising: Commercial contractors and building materials suppliers were among the biggest losers while law firms and medical clinics beat pre-recession levels. What is perhaps surprising, though, were a few of the biggest gainers: day-care centers and funeral homes. Will Boland, acting chief administrative officer at Sageworks, says parents needing to take an additional job to make ends meet likely led to the increase at day cares. He adds that they, like funeral homes, have yet to hire more workers post-recession. Flip through this slide show for snapshots of the 10 industries with the lowest profit margins in 2010 and the 10 industries with the highest margins.

Note: We used Sageworks private company data for profit margins and sales; we used 2007 Census data (the most recent available) for the total number of firms and people employed in each industry.
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Nonresidential Building Construction
Nonresidential Building Construction
Net profit margin rank: 97
Net profit margin: 0.78%
Change in 2009-2010 sales: –15.54%
Number of firms: 45,105
Employment: 766,961

The industry—which includes industrial, commercial, and institutional building construction trades—had a 4.84 percent profit margin in 2006. It dropped below 1 percent last year.
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Highway, Street, and Bridge Construction
Highway, Street, and Bridge Construction
Net profit margin rank: 96
Net profit margin: 0.83%
Change in 2009-2010 sales: –2.31%
Number of firms: 10,953
Employment: 323,289

The change in sales for the sector was above 10 percent from 2005 to 2006. It dropped into negative territory during the recession.
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Utility System Construction
Utility System Construction
Net profit margin rank: 95
Net profit margin: 0.88%
Change in 2009-2010 sales: –14.51%
Number of firms: 20,421
Employment: 524,840

Contractors and construction companies that install water and sewer lines, oil and gas pipelines, and power and communication lines have seen their payroll-to-sales ratio (payroll expense as a percentage of sales) rise from about 10 percent to 15 percent since 2006.
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Building Material and Supplies Dealers
Building Material and Supplies Dealers
Net profit margin rank: 94
Net profit margin: 1.25%
Change in 2009-2010 sales: –5.74%
Number of firms: 45,392
Employment: 1,202,392

Sales have been dropping since 2007 for the sector, which includes paint and wallpaper stores, hardware stores, home centers, and other building materials suppliers.
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Foundation, Structure, and Building Exterior Contractors
Foundation, Structure, and Building Exterior Contractors
Net profit margin rank: 93
Net profit margin: 1.35%
Change in 2009-2010 sales: –17.17%
Number of firms: 115,010
Employment: 1,103,222

The industry, which includes framers, roofers, and masons, continued to suffer in 2010, with sales dropping by more than 17 percent from a year earlier.
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Lumber and Other Construction Materials Merchant Wholesalers
Lumber and Other Construction Materials Merchant Wholesalers
Net profit margin rank: 92
Net profit margin: 1.74%
Change in 2009-2010 sales: –9.20%
Number of firms: 12,895
Employment: 264,252

Lumber and construction materials sales rose slightly in 2010 after dropping since 2007.
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Household and Institutional Furniture and Kitchen Cabinet Manufacturing
Household and Institutional Furniture and Kitchen Cabinet Manufacturing
Net profit margin rank: 91
Net profit margin: 1.82%
Change in 2009-2010 sales: –9.61%
Number of firms: 16,184
Employment: 333,974

Net profit margin for the industry, which includes cabinet makers and furniture upholsterers, was in negative territory last year. It nudged upward in 2010.
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Printing and Related Support Activities
Printing and Related Support Activities
Net profit margin rank: 90
Net profit margin: 1.96%
Change in 2009-2010 sales: –0.55%
Number of firms: 3,239
Employment: 35,493

Profit margins were below 5 percent in 2006 for the prepress services, device manufacturers, and various types of printers that form this shrinking industry.
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Cement and Concrete Product Manufacturing
Cement and Concrete Product Manufacturing
Net profit margin rank: 89
Net profit margin: 2.03%
Change in 2009-2010 sales: –16.25%
Number of firms: 5,093
Employment: 221,488

Profit margins dropped into negative territory in 2009 for makers of cement and bricks. They bounced back slightly in 2010.
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Hardware and Plumbing and Heating Equipment and Supplies Merchant Wholesalers
Hardware and Plumbing and Heating Equipment and Supplies Merchant Wholesalers
Net profit margin rank: 88
Net profit margin: 2.06%
Change in 2009-2010 sales: –0.71%
Number of firms: 11,261
Employment: 232,006

Profit margins bounced back a bit in 2010 from the trough of 2009 for wholesale sellers of heating and air-conditioning equipment, refrigeration equipment, and similar supplies.
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Accounting, Tax Preparation, Bookkeeping, and Payroll Services
Accounting, Tax Preparation, Bookkeeping, and Payroll Services
Net profit margin rank: 1
Net profit margin: 18.36%
Change in 2009-2010 sales: 0.15%
Number of firms: 108,428
Employment: 1,357,368

The payroll-to-sales ratio dropped from just above 30 percent in 2006 to 12 percent last year. The industry includes accountants and payroll services.

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Offices of Dentists
Offices of Dentists
Net profit margin rank: 2
Net profit margin: 17.04%
Change in 2009-2010 sales: 7.18%
Number of firms: 120,676
Employment: 824,770

In a reliably profitable business, dentists were able to maintain double-digit profit margins throughout the recession.
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Legal Services
Legal Services
Net profit margin rank: 3
Net profit margin: 16.75%
Change in 2009-2010 sales: 3.79%
Number of firms: 15,541
Employment: 268,328

The legal services industry—from notaries to settlement offices—was highly profitable during the recession and increased margins last year.
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Offices of Other Health Practitioners
Offices of Other Health Practitioners
Net profit margin rank: 4
Net profit margin: 16.14%
Change in 2009-2010 sales: 7.25%
Number of firms: 113,010
Employment: 614,171

Chiropractors, optometrists, and mental health practitioners weathered the recession well, experiencing only a modest dip in sales during the recession. This industry doesn't include physicians.
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Other Financial Investment Activities
Other Financial Investment Activities
Net profit margin rank: 5
Net profit margin: 16.11%
Change in 2009-2010 sales: 0.33%
Number of firms: 16,184
Employment: 333,974

This industry category excludes everything from bankers to securities traders to commodity contract dealers. Those within the sector, such as portfolio managers and investment advisers, dropped payrolls drastically in order to maintain historically high profit margins.
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Offices of Physicians
Offices of Physicians
Net profit margin rank: 6
Net profit margin: 13.24%
Change in 2009-2010 sales: 3.05%
Number of firms: 191,961
Employment: 2,169,682

Physicians' profit margin hovered near 10 percent from 2006 to 2009. It jumped in 2010 as sales increased.
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Outpatient Care Centers
Outpatient Care Centers
Net profit margin rank: 7
Net profit margin: 12.10%
Change in 2009-2010 sales: 8.76%
Number of firms: 14,444
Employment: 695,863

Payrolls dropped in 2008 and 2009 but picked up again last year as sales increased. The industry includes centers whose services range from family planning to kidney dialysis.
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Death Care Services
Death Care Services
Net profit margin rank: 8
Net profit margin: 11.87%
Change in 2009-2010 sales: 5.22%
Number of firms: 15,839
Employment: 136,928

Funeral homes, cemeteries, and crematories saw a major bump in profit margin last year as sales bounced back from negative territory.
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Other Professional, Scientific, and Technical Services
Other Professional, Scientific, and Technical Services
Net profit margin rank: 9
Net profit margin: 11.55%
Change in 2009-2010 sales: 2.57%
Number of firms: 64,704
Employment: 599,993

This broad-ranging umbrella industry includes commercial photography and portrait studios, translators and interpreters, and veterinarians.

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Child Day-Care Services
Child Day-Care Services
Net profit margin rank: 10
Net profit margin: 10.43%
Change in 2009-2010 sales: 3.31%
Number of firms: 59,985
Employment: 853,648

The payroll-to-sales ratio was nearly 40 percent in 2006, before the recession, but dropped under 20 percent last year. That leanness boosted profit margins.
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