Hi Michelle,

I offer proofreading and editing services in my business, and quite frankly, it's one of my favorite tasks, and it can absolutely be profitable as a niche service. Like Serena mentioned, you may want to target authors. If you get in with one or two and do good work, they'll tell their friends, and you'll get more work through word-of-mouth.

As for the difference between proofreading and editing, basically, editing includes making sure that the text flows well and makes sense. To go a step further, copy editing involves checking for continuity in the content, like making sure that the same tense is used throughout the work, etc. Copy editors also check for spelling and grammatical errors. Proofreading, only the other hand, requires only looking for typos and basic grammatical errors (like missing punctuation).

There's an important distinction between proofreading and copy editing because copy editors can generally charge more for their services. Definitely something to consider!
As far as a degree goes, it may be required for full-time employment as a copy editor, but I don't think it will matter in your business. I have a degree in English, but none of my potential clients have ever asked me about my education. They care more about my experience and knowledge of correct spelling and grammar - after all, that's what really matters in the end.

Hope that helps!