With majority of entrepreneurs failing, what are some businesses that never fail? Diving into the business world is a high-risk gamble. Well, you’re not entirely wrong. But just like any venture, understanding the market can lead to a smoother journey.
Every business owner strives to make a profit, grow their enterprise, and create a lasting impact. Yet, many fall into pitfalls due to needing more knowledge, preparation, or simply venturing into the wrong industry.
While large corporations focus on maintaining their stock prices, credit ratings, and market relevance, smaller businesses face different hurdles. Shockingly, according to Fundera, 20% of small businesses fail within their first year.
By the five-year mark, that failure rate jumps to 50%. Why is this, you wonder? Choosing the right business model at the right time and place is essential to maximize your chances of success.
The question arises: What businesses that never fail withstand economic downturns and offer stability? Let’s take a closer look:
Real Estate
Have you ever heard of the famous quote from Andrew Carnegie, “90% of millionaires got their wealth by investing in real estate”? Well, there’s some truth to it. Rental property businesses enjoy an impressive 85.3% success rate.
Think about it: Real estate has been a cornerstone in the U.S., raising more money than most other sectors combined.
But why? Well, properties have an inherent value that doesn’t just plummet overnight. Imagine having a business plan where you earn steady passive income every month from your rental properties. The costs? Mostly set in stone.
Plus, the value of properties tends to go up over time. You invest, it grows. Simple, right? And if paperwork isn’t your thing, hire a property manager. They’ll handle the nitty-gritty, leaving you with a smooth-running, money-making machine.
Trucking
When the word “transportation company” pops up, many picture huge trucks zooming across the country, while others might visualize smaller vans navigating the bustling streets for local deliveries.
This is the world of trucking—a sector where transportation businesses, from freight giants to local delivery services, trucking marks an impressive 76% success rate.
Dive into the behind-the-scenes financial services, and you’ll find it doesn’t necessarily require millions of dollars to start this venture.
Instead, with a solid business plan, all you might need to commence is the vehicle itself. Considering the annual growth rate of goods that need transporting, it’s a venture worth pondering.
Vending
Step into the vending world, where initiating a business means setting up a single machine. Be it snacks, beverages, or any other pocket-friendly item, the options are vast.
With the right marketing strategies, sales can surge, transforming this venture into a highly profitable business.
However, like every venture, there are costs—replenishing stock, fuel for transportation, and occasionally, leasing space in high-footfall zones. Additionally, with a pinch of negotiation and networking, you could land a spot in a company’s breakroom or a busy lobby, all for free.
And if a time comes when you yearn for a change, these routes can be sold, potentially earning you thousands of dollars.
Laundromats
In a world driven by appearances, laundromats have carved their niche. The logic is straightforward—no matter the twists and turns of market cycles or the broader economy, clean attire remains a constant need.
The beauty of this business model? Most of these establishments function around the clock without continuous staff intervention.
And while setting up might seem daunting, ringing in thousands of dollars, with the right financial plan, it’s more accessible than most assume.
Child Care
Parents, especially those constantly balancing work with family life, always seek dependable childcare services.
Think about it: from babysitting to daycare centers, there’s a constant need, underscored by the fact that, as per international studies, the number of working mothers is on the rise.
Beginning on a modest scale, perhaps by offering services over the weekends, you could cater to multiple kids simultaneously.
The earnings from these engagements could act as the seed capital for your child care center—a real estate business opportunity.
As a side benefit, why not offer thematic services, like organizing baby showers? Such a venture has the potential to stand the test of time, generating compound annual growth.
Cleaning Services
The demand for a spotless environment in homes or offices stays the same. But the beauty of this sector lies in its versatility.
While some might cater to corporate spaces requiring janitorial solutions, establishments like restaurants demand niche cleaning services.
The food business, in particular, emphasizes hygiene, with many even necessitating specialized hospital supplies. But why stop there? Delving deeper, opportunities abound, from carpet and dry cleaning to boat maintenance.
A cleaning service, whether generic or specialized, can be a lucrative venture. And with a green thumb approach, you could emphasize eco-friendly methods, aligning with the contemporary sustainability ethos.
Senior Care Centers (Healthcare)
Venture into the healthcare industry, and you’ll stumble upon a sector with opportunities: senior care. With the U.S. demographic landscape skewing older, the demand in this domain has seen an impressive growth trajectory. But what’s fuelling this growth?
A significant chunk of the credit goes to governmental support. Federal, state and even city-level subsidies have injected a degree of predictability and stability into this model.
But, as with any healthcare venture, it’s not without regulations. There are rules you will need to follow. However, once you’ve grasped the nuances, you’re looking at a business model that’s not just profitable but also timeless.
Why Do Some Businesses Fail?
If you’re contemplating starting a venture, it’s crucial to be aware of the common pitfalls: Each business faces unique challenges, but certain pitfalls recur across sectors and industries.
Recognizing these pitfalls can equip an entrepreneur with the knowledge to sidestep them. Here’s a closer examination of some of these common challenges:
Bad Operational Management
While novel concepts can spark interest, the longevity of a business relies on sustainable operations. Think of the success of franchises.
Their strength lies not solely in a recognizable brand, but in that every outlet operates using a set, replicable system, irrespective of location.
This consistency is what customers trust. Systems bring efficiency, allowing businesses to deliver consistently, reduce waste, and continually assess areas of improvement.
Poor Financial Management
Initial capital isn’t just about launching the business but ensuring it can operate and adapt until it becomes self-sustaining.
Remember, revenue is vanity, profit is sanity, but cash flow is reality. Businesses can be profitable on paper but fail because they need help managing their cash.
While it’s essential to manage costs, understanding where to invest – like in quality, marketing, or employee training – can determine a business’s growth trajectory.
Poor Business Strategy
A strategy isn’t a one-off document but a guiding blueprint. It articulates how a business will face competition, adapt to market changes, and capitalize on opportunities.
Successful strategies balance ambitious long-term goals and achievable short-term targets, ensuring businesses are both aspirational and grounded.
Absence of Leadership
While managers maintain, leaders inspire. They envision the future, motivate their teams, and drive innovation.
They shape organizational cultures where employees feel valued, increasing productivity and loyalty.
A leader’s role isn’t just visionary; they ensure the team is accountable, driving the business towards its objectives.
Unsuitable Location
For brick-and-mortar establishments, location is about more than just footfall. It’s about being accessible to the target audience, understanding competition density, and ensuring logistical feasibility.
For online ventures, “location” translates to digital visibility. Understanding digital advertising and leveraging social media become pivotal to being easily discoverable through search engines.
Lack of Demand
Before launching, it’s crucial to understand if there’s a genuine need or gap in the market that the business addresses.
Even post-launch, continually gauging market response and being willing to pivot services or products can keep businesses relevant.
Remember, successful businesses don’t just meet demands; they engage customers, encouraging feedback and fostering loyalty.
Wrapping Up
While starting a new business can be fraught with risks, above are some industries that have demonstrated robustness against economic downturns and shifts.
From real estate to senior care centers, these business avenues promise a higher probability of success, especially when approached with knowledge, dedication, and adaptability.
However, no business, regardless of its sector, is exempt from universal challenges such as poor management, financial missteps, and the absence of effective leadership.
To this end, budding entrepreneurs must arm themselves with not just industry insights but a holistic understanding of the business world. Success, after all, isn’t solely about selecting a thriving sector but seamlessly blending passion with pragmatism.
