Business ideas that Never Fail? 6 Businesses with Amazingly Low Failure Rates
January 8, 2023
Most businesses fail, the question is how can you have business ideas that never fail?
We’ve found 6 business ideas with the lowest failure rate associated with them this is all backed by data. Because according to the US Bureau of Labor Statistics, 20% of small businesses fail within the first year, then that jumps up to like 50% by the five years, and after ten years 2/3 of all businesses have gone. That’s not good odds not great odds at all.
So if we actually look at the data to figure out which ones have the highest likelihood to succeed then we can determine if we want to jump into those pools I always talk about the most important decision you make the first deal you do or the first business you start. Because if the first one fails, your likelihood of taking the risk again is incredibly diminished this is called your recency bias.
if your recency bias is winning, that’s why we want small wins then you are more likely to go win again or take more risk. if your recency bias is losing or things that feel bad you’re less likely to continue to take risks. so let’s get to the data and see business ideas that never fail and That have the lowest failure Rates.
laundromats have an amazingly low failure rate. According to Laundrylux laundromats have about a 94.8% success rate over a five-year period. I also confirmed these numbers because laundry Lux is a member of the laundromat community. So maybe they’re a little biased and the Chamber of Commerce did a study in partnership with Speed Queen where they show that they have about a 93% success rate.
so somewhere in the 90s let’s call it again nothing’s guaranteed in business but that’s one of the reasons I talk about these laundromats as my gateway drug to business buy-in, they have a low failure rate in business they’re simple to understand quarters machines a little bit of a dryer, a little bit of a washer, they typically don’t take Millions to start or buy.
It also turns out people need to wash their clothes even during recessions so you have downside protection lastly there’s a passive component. if you do laundromats as an absentee business you can run them remotely, or with very few employees, or contractors your employees end up being your machines.
2. Rental property businesses
Andrew Carnegie said
90 of all millionaires become so through owning real estate
More Money’s been made in real estate than almost all industrial Investments combined. So it makes sense that they have an 85.3% success rate why is real estate interesting and why does it have a low failure rate? well, one is because it’s a simple business with hard assets so you know you have your house the market is really efficient. so typically your house is worth what the market says, it is there’s not a lot of room for variance there or change you typically have monthly cash flow in the form of rental income.
It’s pretty easy to model because you know up front I have to pay an exit mortgage and I have to pay why from my renter and here’s the delta. or the difference between the two also interesting Parts about real estate are obviously things like appreciation baked in four percent a year on average. or my favorite word leverage this is the form of mortgage right,
So you have the ability to use somebody else’s money in order to buy real estate. that also allows you to have tax benefits like 1031 exchanges where you sell to defer capital gains depreciation. And amortization which basically is a different way for you to take write-offs on your taxes overall there’s also great tax benefits to being a real estate investor only.
There’s the passive component and you could just hire a property manager there’s no such thing as free money with no work. But real estate prices are interesting if you’re in the right cycle of the market now right now I think real estate’s price is pretty high but Falling fast.
If we talk about California today real estate prices are down like 20% to 30%. You need to think about can I qualify for a loan. can I cover the mortgage? But this success rate is probably there for all the reasons that we talked about you know. Even if you’re making a small percentage monthly like the average rental property that’s about $462 a month, it’s not going to make you a billionaire but you probably can understand how to grow the business and how not to grow the business and what a good deal looks like with a little bit of work.
3. Self-storage facility
A self-storage facility is the best idea on our list of Business ideas that Never Fail. if you don’t like the idea of real estate investing for a multi-family let’s say you don’t want to deal with tenants or trash. Self Storage has fewer of those things they have been one of the leading asset classes in real estate since 2008 and according to a few studies won by a rhino building these resilient businesses have a 92% success rate.
I would say though there are a lot of these self-storage facilities so will that 92% rate continue I’d want to watch what’s going to happen in the next couple of months and years. But I have plenty of friends like this guy who makes millions on absentee storage sites he lives hours away from here.
Basically, you have keyless entry you have tracking systems you have security systems automated bill pay have all automated contracts. all of this allows people to get in and out of their units without you then there’s the value add component AKA adding things to the business to make it more valuable and efficient.
They’re high with this type of asset class, it doesn’t take a ton to make Self Storage Pretty interesting in fact look at what you can do. if you just paint the front of your self storage unit and what the normal increase in the property value is for that. so the phone has allowed us to have no manager on-site needed in most ways.
4. Last-mile delivery
Last-mile delivery has been the biggest change in our economy in the last 10 years when it comes to transportation and Logistics with e-commerce coming along with the gig economy online platforms. it’s more needed than ever to have a way to get the goods into our greedy little mitts and porches basically, Trucking that delivers Goods or people from one place to another for a fee is transportation and Logistics.
According to advisor Smith, that’s kind of fascinating because these businesses would be more complex now there is a massive difference between short and long-haul Trucking or shipping food from Uber and long-haul Trucking. so your results are going to vary but on average these businesses have a high success rate.
Last-mile delivery has very Low Failure Rates.
I think because again we don’t have that many inputs I’d worry about scale given the demand for drivers. if you wanted to really create a huge Empire. but as a job turned into a business, this one could be an interesting and relatively low risk you know you could buy a truck that’s going to have inherent value in it a little bit of depreciation after you buy it.
Maybe if you buy it new and it’s your time to start with actually running the routes or having somebody else but you don’t have a lot of what’s called CAPEX or upfront expenses in order to run this business. and so not only does it have a relatively low failure rate but I always am looking for how can I make sure a deal can never bankrupt me. I don’t ever want to do a deal where if this deal goes sideways, especially in the beginning I could Wipe Out the past 20 years of my investing and working and neither do you and that’s why I like these little Gateway starter businesses.
5. vending machine Roots
So you don’t need a lot of cash 3k to 5k you buy a vending machine and get started or you’re super smart and industrious and you buy a used one for 800 bucks like this you know I’ve talked Ad nauseam AKA a lot about this. and I have friends who have vending machines that vend healthy food you know normal vending machines. Cupcake vending machines brilliant idea he definitely made more than a few grand on that thing.
I don’t want to make a big deal about this but if you do not think that red velvet cupcakes from sprinkles are the best cupcakes out there like I don’t know if we can be friends.
if you have your vending machine couple of different things you need to do for IT.
to find a well-trafficked location and negotiate to put it in for you know as a service or for a rental fee. And then fill inventory great little starter business.
I wouldn’t do it if I was a pro or wanted to make a lot of money meaning if I wanted to make hundreds and thousands of dollars a year this business is probably really good for your first 20, 30, 50 maybe you could get to a hundred thousand dollars. but it’s a great business to learn things like PL’s Logistics pricing margins manage a few contractors or run it by yourself you start small it’s not going to bankrupt you if you figure out how the business works.
And then you slowly expand and this business has more than a 90 almost success rate then you could eventually have a bunch of them roll them up. and sell them as a group like these companies do. so the actual success rate for a vending machine business varies from 90% according to drop vending who’s in the space or 82% success rate according to the US Bureau of Labor there are a slew billion dollar vending companies which is interesting.
Because it does show that you can scale this space although I think it’d be a hard slog. so when you combine the low failure rate affordable startup cost and simple operations of this business I really like this starter business for people who want to hustle.
6. Senior care centers
Senior Care Centers had such a low failure rate but actually it kind of makes sense for a lot of reasons
1- government subsidies, State subsidies, and City subsidies basically allow people to run Senior Care Centers like this with some help from the government.
2- Obviously the demographics in the US are changing there are a lot of older people and fewer young people and they need more care now originally when I thought of these ideas. I was like what are some beginner ways to do this you can’t buy I mean this property right here costs tens of millions of dollars you probably can’t buy that when you’re just starting out. But I didn’t realize that there were a ton of little houses where they actually rent a house and get it zoned properly for senior care or alternatively buy a house and get its own or the right certificates to be able to have assisted living there.
So that’s why this idea is actually kind of interesting there’s definitely oversight here and certifications and Zoning that you have to be aware of but you don’t have to the millions I thought you did so there you have it 6 Business ideas that never fail that have Amazingly Low Failure Rates.