Starting and building a successful business is no walk in the park, and the risk of failure keeps most entrepreneurs awake at night. In fairness, this fear of failure isn't irrational, as statistics show that nearly 90% of small businesses fail. The average failure rate for start-ups within the first year is 10%, and the chances of failure increase to 70% in years two through five.
So, yes, business failure is a common event, but there are ways to avoid it, including choosing to buy or start a business with a low risk of failure. Always remember that a solid and thorough business plan is the first step to avoiding business failure. This article lists some fail-proof business ideas you can venture into with little to no risk.
We'll analyze the following businesses with low risk and high demand:
- Real estate
- Laundromat
- Vending machine
- Self-storage
- Senior housing
- Business Consulting
- E-commerce
- Event planning
- Cleaning services
- Pet services
10 businesses that never fail
Let's take a look at some businesses that have low failure rates, why their business models are resilient, and where entrepreneurs and business buyers can find opportunities to invest in.
Real estate
Real estate is a low-risk business opportunity for short-term investment due to its market resilience, tangibility, and risk mitigation through diversification. In real estate, you're less likely to lose money because the property itself protects your investment. Housing is a basic need, which makes it an inelastic commodity. This means it's less affected by speculations, sentiments, and changes in economic conditions than more volatile investments like bonds and stocks.
Real estate is a tangible asset, which means your investment retains its value even if the market dips temporarily. Also, real estate investing is flexible since you can diversify your portfolio into channels like property development, luxury homes, and house flips.
To know if real estate is a safe investment, we also have to look at some profitability indicators of the industry. The real estate industry, with a CAGR of 4.7%, is expected to increase in market value from US$113.60 trillion in 2023 to US$142.9 trillion by 2028.
Laundromat
Laundromats in popular locations often have an exceptional ROI. Laundromats are not impacted by seasonality and are recession-resistant. Also, unlike other brick-and-mortar businesses that may face challenges from e-commerce competitors, laundromats have no such problems.
Laundromats can be financially rewarding if the basics, such as location, machinery, marketing, and maintenance, are right. Their scalability, flexibility, and easy-to-handle cash flow make laundromats a sensible pick for experienced and new business investors.
The laundromat is a business with a low failure rate because it has low labor costs— with 70% of laundromat investors having 0-3 staff, an average cash-on-cash ROI of up to 35%, upfront payment before service, and minimum inventory.
The profitability indicators for laundry care show that it belongs to a stable industry. The estimated revenue of the sector is US$15.35bn in 2023, and it's expected to grow at a CAGR of 2.55% between 2023 and 2028. The trend is favorable due to the increasing number of people joining the U.S. Workforce, contributing to the growing demand for professional laundry facilities to save time and energy.
Vending machines
The success rate of a vending machine business is typically above 80%. Vending is another low-risk business that generates high returns. The complete return on investment period for this business is 12 to 18 months.
Buying a vending machine is a good investment because it has a low overhead cost and requires minimal maintenance. You can buy a used vending machine for a very reasonable price and stock it with essential products in high demand.
Vending is a flexible business. You can decide what location to put your machines in, what kind of products they will sell and when they'll be reloaded. It is also very scalable. You can grow at your own pace, and when you're confident enough to expand your business, you can establish as many vending machine stations as you want.
The vending machine industry has an estimated market value of US$60bn in 2023 and is projected to reach US$143bn by 2023 at a CAGR of 9%. The boost in the market can be credited to the rise in demand for on-the-go food and beverages due to the changing eating habits of consumers.
With the right strategy, product and location, a successful vending machine can generate revenue 24hrs a day, 7 days a week, allowing you to earn a living while working other jobs or acquiring a new skill.
Self-storage business
Self-storage businesses have an impressive success rate of 92%. This is a low-risk and high returns business you can start without prior experience.
Self-storage business has a relatively low start-up cost compared to other real estate endeavors. Building a small to mid-sized facility from the ground up generally costs $200,000 to $500,000. Also, it's easy to secure funding for a self-storage business— due to its high success rates, lenders consider self-storage loans to be low-risk.
There is a growing demand for the self-storage industry, as more than one in 10 U.S. households rent a self-storage unit. The national average cost for all unit sizes was at an all-time high of $110 per month in 2022. The self-storage sector, with a market cap of US$39.5bn in 2021 and a national average occupancy of 92%, is expected to reach a market cap of US$44.6bn by 2024.
Senior housing
Senior housing is one of those businesses that will always be in demand, and the need for new senior care facilities is about to increase within the next few decades.
The number of Americans aged 65 and above is expected to nearly double by 2060. An increase from 52 million to 95 million means seniors will make up 23% of the American population. These numbers will influence the need for senior housing as demand is expected to rise from 1.5 million units in 2020 to 3.2 million units in 2040. This means to catch up with this demand, 100,000 units per year for the next 15 to 17 years.
Senior care centers appear to be recession-resistant investments. This is because, during economic declines, most people downsize their homes and relocate to senior housing for more convenient and affordable living conditions. As of 2020, the National Investment Center for Senior Housing and Care reported that the annual investment return for senior housing over ten years is 11.6%.
Business consulting
Business consulting can be a great business opportunity if you have niche expertise and industry contacts. Business consulting has a low overhead cost, and you'll often get upfront payments, which makes it a low-risk business.
As an individual business consultant, your revenue depends on several factors, such as your location, your level of expertise and the industries you serve. Industries in high demand for consultants include Marketing, IT, human resources, social media, security, and finance. Typically, the average earnings of a U.S. consultant is between $45,000 and $95,000 per year.
The management consultant industry has an annual revenue growth of 7.4% and a market value of 365.8bn in 2022. The continuous rise of this industry demonstrates that companies require external counsel with specialized knowledge about business development and administration.
E-commerce
The digital age has ushered in remarkable opportunities for entrepreneurs. Starting an e-commerce business allows you to tap into the global market and requires minimal physical infrastructure. By implementing the right marketing efforts and strategy, you present your product and services to a worldwide audience without the constraints of a brick-and-mortar location.
E-commerce stores require low overhead costs to begin, and they belong to a rapidly growing industry. The revenue in the e-commerce market is estimated at US$925.40bn as of 2023. With a CAGR of 11.22%, the market cap is projected to reach US$1,416bn by 2027.
Event planning
Event planning might be the best low-risk business for you if you have the ability to visualize a client's idea of the perfect function and bring it to fruition. Event planning doesn't require much overhead cost. You don't need an office, and you can hire temp workers on a need-to basis. The unique payment structure of this business fosters positive cash flow since payment is upfront.
The event planning industry had a market size of US$94.8bn in 2020. Growing at a CAGR of 13.0%, the industry's market value is projected to reach US$538.6bn by 2030.
Cleaning services
Cleaning businesses are a low-risk and in-demand service you can start if you have a knack for cleaning and organizing.
Remote work is becoming increasingly prevalent, and more people are struggling to pull off work, child care and keeping their homes clean. The growing population of seniors (baby boomers) also means the demand for cleaning services will increase. In 2022, nearly 10% of all U.S. households hired home cleaning services.
The cleaning industry had a market value of US$168.34bn. The market value is expected to surpass US$276bn by 2028, rising at a CAGR of 6.5%. This boost can also be attributed to the incorporation of sophisticated cleaning automation, which leads to an increase in productivity and automation.
Pet services
The pet care and services industry is an opportunity to turn your passion and love for our furry buddies into a profitable venture. You can enter the pet care industry through several sectors, including pet grooming and walking, dog training, pet products, and pet boarding.
The pet service industry is on the rise; it was valued at US$23.03bn in 2022, and it's expected to expand at a CAGR of 5.4% to US$29.95 by 2028. The key drivers of this market include pet humanization, an increasing population of companion animals, and increasing expenditure on pet products.
Helpful FAQs
What businesses are least likely to fail?
Businesses that are least likely to fail include:
- Laundromat— 95% success rate
- Vending machine— above 80% success rate
- Self-storage— 92% success rate
- Real estate— 85.3 % success rate
- Cleaning services— 68% success rate
What are the top five reasons businesses fail?
The top five reasons businesses fail are:
- Financial challenges
- Poor management
- Lack of an effective business plan
- Low market demand for products
- Ineffective marketing strategy
What industries will never go out of business
Industries that will never go out of business include:
- Healthcare and Pharmaceutical
- Food and Beverage
- Transportation
- Agriculture
- IT and Technology services
Bottom line: businesses that never fail
There you have it. A list of the top 10 businesses that never fail. Becoming a successful entrepreneur isn't easy, and every industry has its challenges. However, some businesses are more resilient than others. These businesses are low risk, require little to no overhead expenses and are rarely affected by changes in economic conditions.
Here are some of the most important things to consider when buying or starting a business that never fails:
- Always adapt, upgrade, and cater to consumer and industry shifts.
- Understand the cyclical nature of the industry you’re interested in.
- Ensure you understand the risks of entering a specific industry and prepare to mitigate them strategically.
Are you looking for a business to buy in your preferred industry? If so, you’ve come to the right platform.
You can browse through thousands of businesses for sale on our site. Of course, purchasing a thriving business is only the first step; you still need to work at growing your business. To educate yourself on how to do this, you might want to take a look at our articles on growing a business and improving the cash flow of a business.
We hope this article has been useful, and we wish you the best of luck on your new business venture!
@Be_theBoss