Are you an entrepreneur but you lack ideas on what finance business to start? If YES, here are 100+ best business ideas in the financial service industry.
Financial services can be known as a compendium of the economic services that are provided by the finance industry. These services encompass a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.
If you have a solid background in the financial services industry, then you are already half way to starting a profitable business. We have helped you with a list of profitable businesses you can start in the financial services industry.
100+ Best Business ideas in the Financial Service Industry
If you are a big time investor looking for ways to expand your investment portfolio, then you should consider starting a hedge fund business. Hedge funds can be defined as a regulated investment fund that is usually open to a limited range of investors who pay a performance fee to the fund’s investment manager who invests the funds and bring returns.
When running a hedge fund business, the easiest way for you to make money is to help your clients make more money. The income you will generate for your business will be based on your performance and economic savviness.
An insurance company is a business that provides coverage, in the form of compensation resulting from loss, damages, injury, treatment or hardship in exchange for premium payments. The job of selling insurance may not be so appealing, but the fact remains that the business is quite profitable. Whether you’re a pure life insurance agent or a property and casualty, insurance agents can make very good money.
To get licensed, you just have to take some basic tests that will cost you a couple of hundred bucks. Getting approved for property and casualty can be tough, especially depending on your geographic location. But if you think you like insurance and you want to help people, it’s definitely a good profession and an awesome small business idea that you can pursue.
One of the options you have if you want to start a business in the financial service industry is to open a bank. Banking is an industry that handles cash, credit, and other financial transactions. Banks provide a safe place to store extra cash and credit.
They offer savings accounts, certificates of deposit, and checking accounts. If you have the capital requirement and of course the qualifications, then you should by all means approach the central bank of your country, and request for the requirements to start a bank. But know that this is a heavy investment that might not be suitable for just one investor.
An investment club is a group of people who pool their money to make investments. Usually, investment clubs are organized as partnerships and after the members study different investments, the group decides to buy or sell based on a majority vote of the members.
People are lazy when it comes to investment, that’s a fact. Though they want to invest, but they really do not want to be bothered with the hassles of investment. So, if you are looking to start a trade in the finance related industry, then one of your options is to start an investment club, to help people to get round to making that investment.
A pawn shop offers secured loans to people when they use items of their personal property as collateral. People usually see pawn shops as a ‘saving grace’ in the time of need, so both the rich and poor all pay a visit to the pawn shop. If a loan is not paid within the agreed period, the item that was pawned will be put up for sale by the pawnbroker. If you know your way around in the industry, this can be a profitable business to start.
Bookkeeping is all about recording of financial transactions especially in businesses. It is part of the process of financial accounting. The basic transactions that bookkeepers keep for businesses include purchases, sales, receipts, and payments by an individual person or an organization/corporation.
If you are a registered accountant, one small but profitable business you can start in the financial services industry is a bookkeeping service. It costs you nothing to start, but pays you good income.
There are people who are specialized in collecting bad debts; yes, this is an art. If you are one of these, then it would not cost you much to set up a debt collection agency. You can be sure that a lot of businesses would be willing to hire your services if you have a reputation of collecting on debts. In this type of business, you make money by earning commission or a percentage from the debts you are able to recover. In essence, if you are able to negotiate better, you will earn more.
Tax preparation is the process of preparing tax returns, often income tax returns and generally for compensation. Tax preparation may be done by the taxpayer with or without the help of tax preparation software and online services.
Every country has its own set of laws governing the payment of tax, and these laws are often administered very strictly. Quite a lot of individuals and small businesses are still confused about their tax issues. You can set up a small business to help people sort out these issues.
- Mutual Fund Company
Amongst the investment vehicles available to investors is the Mutual Funds. In simple terms, Mutual funds is a pool of cash generated from various private investors with the same goal, interest and investment philosophy, for the sole aim of investing in stocks, bonds, assets, other securities and money market instruments. The fund is managed by a professional fund manager on behalf of the investors. If you are a licensed fund manager, you can set up a mutual fund company.
Credit repair is the process of fixing poor credit standing that may have deteriorated for a variety of different reasons. A credit repair business has unlimited profit potentials and a very low startup cost. This industry identifies errors in credit reporting and disputes inaccurate information with the appropriate organizations to improve credit ratings. These services are typically undertaken on behalf of a client who has known credit problems, such as a recent bankruptcy.
Insurance is one of those industries that is largely untroubled by the state of the economy. The reason for this is that most insurance products are a necessary part of modern life. You can’t own a car without automobile insurance, and while your mortgage company may not require that you have homeowners insurance, would you really consider leaving the single biggest investment of your life unprotected?
Industry participants earn commission income, mostly as a percentage of the premium of insurance policies sold. They also earn some fee for providing risk management consulting and other value-added services.
Private equity firms make use of their available funds or raise funds from investors with the aim of investing the fund in under-performing companies with potentials, with the aim or re-positioning the companies to start making profits. Starting this type of business does not only require huge startup capital base, but also relevant experience in the industry. But if you are able to revive and sell companies, you would be making good profits.
A credit card issuing company is a bank or credit union that offers credit cards. When consumers make credit card purchases, the credit card issuer is responsible for sending payments to merchants for purchases made with credit cards from that bank. Credit card issuing is a very unique business that can be started by anyone as long as they have the experience, licences and can finance the business. The industry has grown quite large over the years and is regarded as a multi-billion dollar industry.
A credit card processing company helps businesses to process payments made by their customers. To start a credit card processing business, you will need to supply your clients with the necessary gadgets with which they would process payments.
As an aspiring entrepreneur with vast experience in the financial industry, one of the related business opportunities you can leverage on is to start a credit card processing business. Although you need hands-on experience with a good track record to be able to attract well-paying clients, but that does not stop you from still making headway in the business.
CPA firms provide services such as auditing, bookkeeping, payroll processing, and tax return preparation. These firms are certified to audit the accounting records of public and private organizations and to demonstrate compliance to generally accepted accounting practices. If you are a Certified public accountant, you can open a firm where you will provide CPA services. This is yet another low cost business in the financial services industry.
Peer-to-peer lending (P2P) is a type of business loan where a large number of private investors lend to a business, usually through an online platform. The idea is that both the lenders and the borrowers get a better rate than they would through the banks.
According to Lending Club, the average annual rate of return for most loan notes is 5% to 7% for Grade A to Grade C borrowers. Investors pay a 1% transaction fee for all received payments. You do not get paid if the borrower doesn’t make a payment. Peer-to-peer lending platforms are a great alternative to the stock market and still yield a decent return. However, it’s risky and requires frequent diligence to invest wisely.
Payroll companies provide their clients with a variety of services related to your business’s payroll needs. This includes processing employee hours, cutting checks, directly depositing funds, and ensuring that your employees are paid correctly and on time, every time. This service is usually done on behalf of an employer. This industry generates $81 billion annually, and you are sure to make good profits out of it.
Whether you’re referring to a bank that sells many financial products or a company that sells only mortgages, mortgage lending companies are financial institutions that lend money to help people buy or refinance their homes. Starting a mortgage lending business is quite different from starting a mortgage brokerage business.
Mortgage lenders do often broker loans; they are different from brokers because they are only permitted to lend money to individuals seeking home financing. Starting your own Mortgage lending business can be quite simple if you have done your due diligence and you are able to finance the business.
This involves learning the different shifts in conversion rate, the rising and falling of currency values, and also buying and selling of currencies online. Although Forex trading involves a great deal of research and outstanding analytic skills, but this business can pay off really well if you have a sound knowledge in the field and also a bit of luck by your side. Just as ROI is never guaranteed, forex trading is risky but rewarding.
Starting an investment bank is yet another highly thriving and profitable business venture in the financial services industry which an investor who intends to start a business should consider. If you have the capital requirement and of course the qualifications, then you should by all means approach the central bank of your country and request for the requirements needed to start an investment bank. Once you are able to meet the requirements you will be issued a license to start your own investment bank.
Micro money lending are small loans that are given by individuals rather than banks or other related financial institutions. These loans can be given by a single person or gathered across a number of persons who each contribute a portion of the total amount.
Micro money lenders basically give out loans of $50,000 or less to startups and other small scale businesses or individuals. Due to the fact that the credit status of these borrowers may be quite low and the risk of default high, micro loans command above the average market interest rate making them attractive for investors to come in.
Cash advance business is a business that involves giving out quick loans to people who can’t approach the bank because they don’t have the required collateral or those who need the money urgently and can’t wait for the full circle of processing loans from the bank.
Of course, the interest rate for cash advance varies, but it is often higher than what one can get from the bank because of the risk involved in this type of business. No doubt starting a cash advance business requires a huge start-up capital, but the fact remains that it is a profitable venture.
Money transfer from one person’s account to another account was formerly the sole duty of banks; nowadays private individuals are setting up money transfer businesses. There are some licenses you need to obtain to run a money transfer business, and you would also be required to register for money services business license. A money transfer business is a very capital intensive business and you are required by law to have a certain capital base and mutual bond before you can set up shop.
Firms that operate in the Payday Loan industry offer payday loans, installment loans and other related financial services. They may also cash checks, drafts or money orders for the general public. The Payday Loan industry is quite large and is still growing because most workers always need pay top-up to augment their monthly pay.
A recent report released by IBISWORLD shows that the Payday Loan and Check Cashing Services industry has relatively low barriers of entry, particularly when compared to other financial services industries.
Stock brokerage firms are financial institutions that help you buy and sell securities. They act as the middle man between the buyer and the seller. A brokerage fee compensates a broker for executing a transaction. It is usually, but not always, a percentage of the transaction value. If you want to get a foot into the financial services industry, you can set up a stock brokerage firm.
Finance consulting business is yet another thriving and profitable business in the finance services industry. Finance consultants offer consulting services that range from budgeting to savings to investments et al. If you have the required qualifications and experience then you should consider starting a finance consulting firm. You can consult for businesses, for the government and for individuals as well.
Mortgage Brokerage firms are established with the sole aim of providing a convenient platform in the form of long term loan to those who want to buy their own property. Mortgage Brokerage firms stand as the middle men between a Bank and Mortgage bank, as the case may be, and the individual or organization seeking to buy a property. Anybody, or group of investors may start and own a mortgage brokerage firm as long as they meet the requirements for establishing such organization in the country they intend establishing the business.
Microfinance is a category of financial services targeted at individuals and small businesses who lack access to conventional banking and related services. Microfinance includes microcredit, the provision of small loans to poor clients; savings and checking accounts; microinsurance; and payment systems. This is yet another profitable lending business you can start in the financial services industry.
An ATM business is a business where a company owns and operates a network of ATMs. They would negotiate with stores to have their ATMs mounted on their premises, they would pay the store a fee or share the profits with the store.
The advent of the ATM has indeed made available business opportunities for entrepreneurs. One of the finance services business that an entrepreneur can successfully launch is an ATM installation and maintenance business. Please note that you would require technical/engineering training before you can start this type of business.
Venture capital is a type of private equity, a form of financing that is provided by firms or funds to small, early-stage, emerging firms that are deemed to have high growth potential, or which have demonstrated high growth. Starting a venture capital firm may not be as easy as most people think, but you can rest assured that with the right information and qualifications, you can successfully establish your own venture capital firm and position it to start making profits within a short time.
A Bail bond business helps alleged criminals stay out of jail while fighting their criminal charges. After being arrested, a person may be given the option of posting bail (pay a set amount of money to the court) in order to be released prior to their trial.
The person, most times, may not have the money to pay for the bail. That is where the services of a professional bail bond business come in. For a fee, usually ten per cent (10%) of the total bail amount; a bail bondsman will secure a person’s pre-trial release. Bail bonding is a booming business, collecting $2.5 billion in fees in 2006 alone, according to Seattle PI.
If you are interested in starting an internet based business, one of the viable and profitable businesses that you can start along that line is a bitcoin exchange and trading company. A bitcoin exchange business is a site that facilitates exchange and trading bitcoins for fiat currencies or other digital currencies, and vice versa.
Bitcoin exchange sites/companies also provide platforms for customers to store their bitcoins. Starting a bitcoin exchange and trading company can be rewarding but you would have to compete with other well established bitcoin exchange and trading companies on the web.
This industry is made up of businesses that provide financial planning, financial advice and wealth management to people and business clients. Businesses in this industry also offer advice in conjunction with other activities such as portfolio management, protection planning and brokerage services.
Financial planners work with individuals, families and businesses to invest their money wisely. These professionals also called financial advisors are knowledgeable financial experts with the ability to differentiate profitable investment opportunities from poor performers. They match clients with a customized mix of products that protect their assets while earning a profitable return.
Real estate private equity (REPE) firms raise capital from outside investors, called Limited Partners (LPs), and then use this capital to acquire and develop properties, operate and improve them, and then sell them to realize a return on their investment.
Private equity real estate is an asset class that consists of pooled private and public investments in the property markets. Such investing involves the acquisition, financing and ownership (either direct or indirect) of property or properties via a pooled vehicle. Real estate investment is always very lucrative and this business is not an exception.
For individuals who understand what Crowdfunding is, they can attest to the fact that Crowdfunding is a thrilling prospect. It simply means linking potential entrepreneurs with millions of micro-investors. This business prospect has helped fund and launch countless new businesses, and it’s given a realistic platform for countless bright, young business owners who would otherwise have nowhere to go.
The global crowdfunding industry is believed to have raised approximately $34.4 Billion in 2016. To be a high flyer in this industry, you have to fight to build credibility.
A life insurance policy is a contract with an insurance company. In exchange for premium payments, the insurance company provides a lump-sum payment, known as a death benefit, to beneficiaries upon the insured’s death. Typically, life insurance is chosen based on the needs and goals of the owner. Life insurance companies make money by investing the premiums, hoping to make more than they’ll have to pay in claims. This is yet another viable financial services business.
If indeed you are a core professional who has successfully cut your teeth in the investment and financial services industry and you want to become your own boss, one of the profitable businesses you can launch is an investment portfolio management firm.
Investment portfolio management has to do with starting a financial consulting business that helps individuals, corporations, and even governments in managing their investment portfolios and financial capital by acting as the client’s agent in the issuance of securities and investing. This kind of venture needs the effort of more than one person and it is worthy to note that this business is very lucrative.
The job of an Insurance Brokerage business is to sell life, health, property, car, and other types of insurance coverage to their clients. Insurance Brokers may work with individual customers or with businesses with assets they wish to protect.
They create complex coverage plans to provide the best service to their customers. Brokers may focus on one particular type of insurance or industry, or they could provide advice on many different types of insurance. An insurance broker makes money off commissions from selling insurance to individuals or businesses.
Bitcoin is a digital currency that operates independently of any country’s central bank. In order to get an updated value of the worth of a bitcoin, you can make use of Google’s currency converter. If you are interested in mining bitcoin, then you have two options to follow. You can choose to mine a block of bitcoins from the computer or you can choose to pool.
If you want quick returns on your investment, then joining a pool is your best option because mining a block of bitcoins from your computer may take you a month or more before you get any return on your investment. But note that if you join a pool, you will only get smaller payments, but you can be rest assured that you will get them on regular basis.
A fundraising business is the type of business that you can start at home or in a small office. A fundraising business owner may work to plan special fundraising event, call on donors and help guide its clients with its marketing efforts to promote their cause.
A fundraising business requires great oral and written skills. It is important to find a niche in the business as there are a lot of noble organizations and associations that require funds to be raised for them. Starting this business would require an experience of some sort because of the so many skills involved in raising funds.
An auto insurance company pools clients’ risks to make payments more affordable for the insured. Driving a car provides freedom and convenience, but it’s also a huge responsibility. That is why it’s the law to have an auto insurance policy if you are a registered car owner.
If a driver gets into an accident, auto insurance pays for car repairs, medical bills, legal fees and even rental fees for a replacement car for you and maybe other drivers involved in the collision. This is an easy business to start if you can provide the requirements.
An asset management company (AMC) is a team of professionals within a financial firm that are dedicated to managing cash and investment assets for clients. It is a firm that invests clients’ pooled funds into securities and other investment vehicles for the purpose of generating profit.
This company provides investors with more diversification and investing options than they would have by themselves. An asset management firm is one of the businesses an entrepreneur can successfully start small and perhaps with a functional home office without breaking the bank for cash.
Grant writing is the process of completing an application exercise for funding given by an institution such as a government department, corporation, foundation or trust. Every year, the amount of grants made available by corporations, foundations and government agencies climb higher; so does the number of businesses hoping to finance their start-ups, innovations and expansion dreams.
And since a lot of entrepreneurs do not have the talent to navigate the grant application process themselves, the need for professional grant writers is also soaring. This is the reason why if you have the necessary skills and disposition, beginning a grant writing consulting business can be both personally and financially rewarding.
The Prepaid Credit and Debit Card Providers industry is made up of companies that issue preloaded, open-loop credit and debit cards to consumers for making purchases. It is important to state that a prepaid credit card company is a highly risky venture because you stand the chance of getting your money trapped in the business when borrowers are not able to pay you back.
Starting a bureau de change is yet another thriving and profitable business venture that an entrepreneur who is interested in starting a business in the finance services industry should consider. A bureau de change is a place where people change currencies. If you are setting up a bureau de change, ensure that you choose a location inside an airport or somewhere close to an airport; bureau de change business thrives in such areas.
An escrow can be referred to as a neutral third party that helps two parties engaged in a transaction to retain their money and other deposits till the deal is closed. Escrow activities in the United States are regulated and they require licensing from the state before the business can start up.
The main attribute of this business is trust as the parties involved must trust in your ability to secure the funds and dispense them when needed, and also to have transparent processes in place to handle disputes should they arise.
Factoring involves a company selling its accounts receivables or invoices to a third party as a means of accessing cash to finance further business activity without having to wait for their debtors to pay them. Factoring companies generate revenue through factor fees, or the difference between the price paid for the invoice and money received from debtors.
Starting a factoring company can be demanding and risky at the same time, but if you have done your due diligence before venturing into the business, you are likely not going to run at a loss.
Title insurance protects property buyers and mortgage lenders against defects or problems with a title when there is a transfer of property ownership. If a title dispute arises during a sale, the title insurance company may be responsible for paying specified legal damages, depending on the policy.
A title company makes sure that the title to a piece of real estate is legitimate and then issues title insurance for that property. Title insurance protects the lender and/or owner against lawsuits or claims against the property that result from disputes over the title.
If you are already in the financial industry or you have a degree or background in finance, then you can build a career as a certified financial advisor or coach by establishing a financial coaching firm. Financial coaching firm is under the financial planning & advice industry and establishments in this industry provide financial planning, advice and wealth management to individuals and business clients. Financial coaches also offer other activities such as portfolio management, protection planning and brokerage services.