Many people think of small business as a side character in the American economy.

They’re not.

Small businesses make up 99.9% of all businesses in the United States and employ nearly half of all private-sector workers.¹ They power local economies, create jobs, and quietly shape communities across the country.

And “small” does not always mean tiny.

In some industries, a company with hundreds of employees can still qualify as a small business under federal standards. Manufacturing firms, for example, can have up to 1,500 employees and still meet the Small Business Administration’s (SBA) definition of small.²

But here’s the part that often gets overlooked:

Some very profitable businesses are sitting inside those numbers.

Not flashy startups.

Not household-name tech companies.

The businesses your neighbors built.

Forget the flashy initial public offerings (IPOs).

Some impressive profit margins belong to businesses many people rarely think about.

Public Storage, the largest self-storage operator in the United States, reported net income of $1.8 billion on $4.8 billion in revenue in 2025 — a net margin of roughly 37%.³ That’s more than triple the broader U.S. market average of 9.74% ,⁴ and it’s a reminder that some of the steadiest cash flow in American business is hiding in places no one talks about at dinner parties.

Pest control companies often benefit from repeat service needs and recurring contracts. Plumbing and heating, ventilation, and air conditioning (HVAC) contractors don’t post sky-high margins, but they often generate something arguably more valuable: steady, recurring demand that doesn’t disappear when the economy slows.

Then there are laundromats, commercial cleaning companies, and vending machine operators.

Not glamorous.

Not trendy.

But often remarkably consistent.

The pattern shows up pretty quickly:

Essential services. Repeat demand. Local trust. Cash flow.

These businesses are not built around buzz.

They’re built around things people need whether the economy feels strong, shaky, or somewhere in between.

And lately, more people have started paying attention.

Researchers at Stanford’s Graduate School of Business have tracked 681 search funds — investment vehicles in which entrepreneurs acquire and operate existing private companies — and found an aggregate pre-tax internal rate of return (IRR) of 35.1% since the model began in 1984.⁵ A record 94 new search funds launched in 2023 alone.⁵ Remember, past performance does not guarantee future results.

The businesses that get the most attention are not always the ones built to last.

According to U.S. Bureau of Labor Statistics data, only about half of new businesses survive to their fifth year, and roughly one in three make it to year ten.⁶

But survival rates vary meaningfully by industry.

Capital-intensive and regulated sectors — including utilities, manufacturing, and certain trades — tend to post stronger long-term survival rates than information and tech businesses.⁷

The difference can be surprisingly simple.

Traditional service businesses are often built around immediate, repeat demand.

Pipes leak.

Air conditioners break.

Pests come back.

Storage units fill up.

And while many startups spend years chasing scale before turning a profit, traditional service businesses may be designed to generate revenue much earlier.

They often rely on local relationships, practical needs, and ongoing demand.

In other words, the businesses making the biggest headlines are not always the ones with the most durable foundations.

But here’s where the story gets even bigger.

An estimated six million small- and medium-sized businesses are expected to face ownership transitions by 2035 as baby boomers retire — and the firms positioned for sale could represent up to $5 trillion in enterprise value.⁸

The reason is simple: America’s business owners are getting older.

More than 11,000 Americans turn 65 every day during the so-called ‘Peak 65’ wave, according to research from the Alliance for Lifetime Income, and many of them have spent decades building the companies that quietly support their local communities.⁹

But building a successful business and successfully passing one on are not the same thing.

According to recent Gallup research, roughly half of U.S. business owners either plan to close their business or have no plan for what happens after they step away.¹⁰ And for family businesses, the odds tend to get tougher with each handoff. Many do not make it past the second or third generation.¹¹

That means a lot of neighborhood businesses are approaching a turning point.

The next chapter may depend on the plans made before the handoff begins.