Best Businesses to Start in Alabama

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The vast majority of businesses in Alabama are small businesses. With Alabama’s low tax rates and low cost of living, it’s a desirable location for starting a new venture. So maybe it’s time to strike out on your own and make a name for yourself in the Alabama business world.

Starting your own business is an exciting step to take if you have an idea about what kind of business you want to start. But what if you’re still trying to figure out what your new business should be? What is the best business to start in Alabama? The answer to this question depends on your personal strengths as much as it depends on general business trends. We can help you brainstorm good business ideas. And once you’re ready to start your own business, our Alabama startup business resources and services can get help you get started quickly!

The Most Profitable Small Business Ideas in Alabama

When you’re running your own business, you want it to be a lucrative business. The profitability of your business can have a lot to do with the type of business you choose. Below are 7 types of businesses that can be profitable in the State of Alabama. 

Idea #1: Food Preparation

People need to eat, and the food service industry is large in Alabama. If you have the ability to serve food to the public, you could have a booming business on your hands! And you don’t have to open a restaurant to have a piece of the pie. In fact, the Alabama Cottage Food Law allows you to sell certain foods that you prepare at your home. You can also rent commercial kitchen space from many different vendors. If you have a delicious cookie or jelly recipe that has been in your family for generations, you can put that recipe to work and build your own enterprise!

Idea #2: Retail Apparel

Clothing is also a regular need for many, and selling clothing at retail can be a great way to break into the marketplace as a business owner. Not only do you have the option of selling your wares to locals in a brick-and-mortar space, but you can also start an online business to sell apparel to people across the country and around the world. 

Idea #3: Tourist Attractions

Alabama brings in millions of tourists on a yearly basis. If you have a property or skill that can educate and/or entertain multiple visitors in your area, you could bring in a lot of tourist revenue. Making tours, arts, and activities available to locals and out-of-towners alike can be a great way to make your mark in the Alabama economy. 

Idea #4: Lodging 

This business idea is related to Alabama’s status as a healthy tourism draw. Visitors from out of town will likely need to pay someone for a place to stay during their visit. If you have a residential property that you can rent to others, you could have a successful business in Alabama. To protect yourself legally and financially while renting your property, you can make your rental business a limited liability company.

Idea #5: Agriculture

Residents of Alabama build a substantial amount of revenue from farming each year. Even if you don’t have traditional farmland, you might still be able to participate in this large economy through urban farming. Not only can your farming activities earn you revenue through the products you sell, but your farming business can also be a tourist attraction. 

Idea #6: Information Technology

The high-tech industry in Alabama is strong. If you’re good with computers and internet applications, you could build a lucrative business reputation as someone who can come in and fix internet- and technology-based business issues. 

Idea #7: Professional Services

Do you have specialized training and/or licensing? Maybe you’re a Certified Public Accountant, an occupational therapist, a landscaper, etc. You can easily use your special skills to go into business for yourself, helping individuals or other businesses stay financially fit, physically safe, or beautifully maintained. You can protect yourself as a professional business owner by starting your business as a professional LLC.

Why These Are the Best Small Businesses to Start in Alabama

Any one of the businesses listed above can be a good business to start in Alabama because:

  • You can start many of them as home-based businesses
  • Many of them don’t require you to buy a lot of large, expensive machinery
  • Many of them are part of in-demand industries in Alabama
  • They can have significant staying power

Don’t let these be the only factors you consider when you decide what kind of business to start. Think about what you bring to the table and your passions. Even if your vision isn’t the most popular business choice, you could still make it a successful business through hard work and good strategizing. 

Best Cities in Alabama for Starting a Business

If you’re looking for a new location in Alabama where you can plant your business roots, three cities that could be successful options are:

  • Birmingham
  • Mobile
  • Huntsville

These cities are at the top for large industries such as technology, and some are internationally recognized as cities to watch.

Why Form Your Business with Us?

We have the tools to support your business ideas from start to finish, so you can focus on expanding your enterprise. Our Alabama Business Formation Service can file important paperwork for you and help you get set up in minutes. We can also educate you on how to form a corporation or organize an LLC. Once your business is off the ground, we can help you keep it legally compliant with our Worry-Free Compliance Service. And we’re not just here for the big business events that come up a handful of times in the year. Our extensive catalog of business support services can help you manage your invoices, find business inspiration, and organize your important documents. We focus on many of the administrative details of your business, so you don’t have to.

We can help!

Whether you want to start a limited liability company (LLC) or corporation with your new business idea, we can make it easy with our Alabama LLC Formation Service, or our Alabama Corporation Formation Service. We can even help guide you through filing an Alabama Certificate of Incorporation. And if you don’t know which business entity type to start, we can help you Compare Different Business Structures

Now, let’s take a look at some of the most profitable business ideas in Alabama. 


  • Among the many reasons for booming industry in Alabama are the low costs, the rich land, and the impressive technological infrastructure. 

  • Many Alabama business owners can grow their businesses by researching their markets and taking advantage of the many business resources and business opportunities available in the state.

  • There are many franchise opportunities available in Alabama. It’s important to research what retailers and services providers in the state are open to franchising. 

  • Drop-shipping is a hot e-commerce business you can start from home.

  • Photography, copywriting, and other creative endeavors are great options for home businesses.

Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.

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Written by Team ZenBusiness

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