Starting a Business? Avoid these 10

10 Worst Businesses to Start Right Now

Julie Bawden-Davis

Opening your own small business is an exhilarating undertaking made even more exciting if you’re successful. No matter how skilled a business person you are, venturing into stagnating or dwindling industries makes it more likely that your business will be one of the 50 percent that fails within the first five years.

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Help ensure your success by steering clear of these likely-to-fail businesses.

10. Restaurant

Opening a restaurant is no small order, as the 23 percent failure rate within the first year illustrates. Independent eateries find it hard to compete with restaurant chains able to buy bulk product at big discounts.

9. Internet Cafe

As Wi-Fi and mobile phones become more and more ubiquitous, it’s no longer necessary to find an internet café in order to log in. Most coffee shops and restaurants offer free Wi-Fi, and you can easily find hot spots in big cities. Plus, many cell phone providers allow customers to use their smartphones as a hotspot. This gives them the ability to use their phone as a way to access the internet.

8. Travel Agency

The internet has transformed how people make travel arrangements. You can perform all tasks necessary for planning travel online, and there are many sites that offer options for deeply discounted travel packages. Even airlines now give consumers discounts for booking online.

7. Social Sites/Search Engines

True, the worldwide web is vast, but there are certain things that the internet doesn’t need more of and that’s social sites and search engines. Trying to get noticed among big players like Google and Facebook is most likely a lesson in futility.

6. Taxi/Limo Service

It became a lot harder to make money in the personal transportation service when an app-based, car-hiring company hit the scene in 2009. Since then, use of ride-hailing apps has continued to grow. February 2017 was the first time that there were more ride-hailing services made than taxis, according to Todd Schneider.  As the apps continue to be popular, limo and taxi service companies have scrambled to remain profitable. Unlike traditional transportation companies that have a staff to support, ride referral services hire independent drivers. It’s hard enough for well-established transportation companies to compete with that business model, so steer clear.

5. Bookstore

The web has drastically changed book buying methods among readers. Many people tend to order print books online and have it delivered to their homes. A growing number of people are also buying eBooks, which means less paper book sales overall. And audiobooks are a growing trend. The number of audiobooks published in 2017 increased by 33.9% compared to 2016, according to the Audiobook Publishers Association. This doesn’t bode well for the few remaining brick and mortar bookstores. In fact, sales at bookstores in October 2018 dropped about 31% compared to October 2000.

4. Video Rental

Video rental is another dinosaur made extinct by the internet and the many free or inexpensive ways to enjoy movies and television programs online. More and more people are subscribing to streaming services each year. In fact, 55% of households in the U.S. paid a subscription for streaming services in 2017, according to Deloitte’s digital media trends survey. Deloitte’s research found that households paying for streaming services grew 450 percent in less than 10 years. There’s no way to fight this trend.

3. Gift Shop

Given the fact that they are full of nonessential items that people only buy as gifts or on a whim, gift shops aren’t the best bet for a successful venture. Opt for opening a store that specializes in a popular niche product.

2. Frozen Yogurt/Ice Cream Shop

In some cities, there’s a frozen yogurt or ice cream shop on just about every corner. As with other saturated markets, it could be difficult to differentiate and grow a frozen yogurt or ice cream shop when there are so many competitors nearby. Avoid this saturated market, no matter how many times your kids urge you to open up such a shop.

1. Office Supply Store

Multiple strikes are against you if you open an office supply store. These include the office supply store chains that dominate the market, the mega warehouse stores that stock office supplies and the fact that supplies are offered at deep discounts online.

Selling what you know is a good idea, but when what you know is offered everywhere or becoming obsolete, it’s time to rethink and devise a more profitable business venture idea.

If you were starting your business now, what would you do differently?

Next Steps: 10 Best Businesses to Start Right Now

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17 Responses to "10 Worst Businesses to Start Right Now"
    • Luong Do | October 28, 2017 at 5:03 pm

      What about hotels? Don’t we have apps to turn our homes into hotels to compete against the Big Boys?

    • Susan | October 27, 2017 at 7:46 pm

      Agree that most on this list are pretty obvious. Maybe that is because the article date is April 2015. Maybe 2 1/2 years ago these businesses weren’t quite so obvious.

    • V. B. Timpson | October 24, 2017 at 11:18 am

      Interesting article, however, more discouraging than incouraging. Have been in the limo service since 1978 & have experienced many highs & lows. The highs comes from hard work, while the lows pushes us into harder work. Faith, courage & determination are the keys to any successful business, large or small.

    • Nathan | October 20, 2017 at 11:35 pm

      1. I’d like to see a list of the 10 ten good businesses to start right now (tech/software company #1).
      2. I’m continually blown away to hear that people still use travel agents.
      3. This list is fairly obvious.


    • Tommy Brittain | October 17, 2017 at 9:52 pm

      Since Value-Add is the key word in startup success, it seems a video rental store would be a great opportunity. Not only could you provide video and DVD rentals, but you could also rent VHS and Beta players for viewing at home! There has to be a great open market for homes that need tape players. Maybe you could even bring back 8-track (anybody reading this remember what that is?) and rent out music media as a bonus.

    • Sam Rogers | October 17, 2017 at 9:23 pm

      Surprised a magazine or niche publishing business isn’t on this list? Would like to see 10 Best Business list category..

    • Jenny Fike | October 17, 2017 at 11:51 am

      I’d be interested to know the Top 10 Best to start up right now.
      Thank you!

    • Travis Schwieger | October 17, 2017 at 3:43 pm

      Well, this has been the most obvious article I’ve read this decade. Thanks for the tip about the video rental place, I had my eye on an old Blockbuster that has been collecting dust for the last 15 years. I feel like that was just a filler answer…no real thought put into that.

      Best companies to start? Anything dealing with Blockchain technology, data mining, predictive analytics, or business intelligence. But that may just be my biased view.

    • Rob Thomson | October 17, 2017 at 2:42 pm

      I don’t know, everything else goes in cycles, now may be the best time to jump in to a video rental store. It would be like going to a 50’s style diner in the 80’s.

    • Daniel eremian | October 17, 2017 at 12:33 pm

      Been in restaurant business for 50 years,there is no business harder,end of story.just opened new sandwich shop 3 years ago,successful bUT extremely tough to compete

    • kr apart | October 17, 2017 at 12:23 pm

      Video rental store? Really?? LoL

    • Catherine Myers | October 17, 2017 at 12:19 pm

      What are the ten BEST businesses to start now?

    • Reed Gesteland | October 17, 2017 at 5:36 am

      I felt that this list was a bit obvious and uninspired. I also really don’t understand how a restaurant can be considered a dwindling or stagnant business. Sure it is hard to compete with the chains, but smaller, boutique restaurants are actually doing better compared to their chain equivalents. Millennials are all about experiences so great food at a fantastic restaurant tops their list. Yes, the restaurant business is risky, but I completely disagree that it is one that you shouldn’t start right now. In fact, with the economy booming and people having more disposable income, I think a restaurant is actually a great business to start if you have a novel idea and some great food to share!

      As for a bookstore, Amazon just opened up a brick and mortar bookstore in a mall in my neighborhood. I don’t know if it will succeed, but if Amazon thinks there’s a market, then who am I to argue with their research and marketing prowess.

      I do agree with the author that you shouldn’t jump into a venture feet first without a lot of market research. However, even if a business is “offered everywhere” that doesn’t make it something you should avoid necessarily. Where there are many of the same types of businesses, there’s also a market. If you can enter that market with something that clearly differentiates you and makes you stand out, then why not give it a try? I mean, there’s a burger shop at every corner in most cities so you would think that a newcomer like Five Guys doesn’t stand a chance. However, they have been doing very well despite the supposed saturation and their menu isn’t really all that varied either.

    • Hal Kaplan | October 17, 2017 at 5:23 am

      Thank you, Captain Obvious. While it is true that these businesses are pretty much played out, you are overlooking synergism. An internet restaurant that sells office supplies (computers, phones, notepads) yogurt, gifts, books and videos on how to use the internet, etc. etc. all under one roof. Kind of like a brick and mortar Amazon.

      These are still good things to be selling if you have the right type of venue. You heard it here first but no need to thank me. Because of the major impositions our governments place on small businesses, including onerous insurance requirements, no business is a cake walk.

    • Tammy Larsen | October 17, 2017 at 3:56 am

      I disagree about a travel agency. Though it is true you can book your travel online, personal service will out weigh the lack of service booking online offers. The internet is often too overwhelming and who do you go to when your vacation goes awry. Travel Vonsultants are there from beginning to end. I started my business in 2009 when the economy was failing, but my business thrives as the years went by. Personal service are what people are really looking for.

    • Linwood Howell | October 17, 2017 at 3:22 am

      Great article but how about the 10 best businesses to start now. Service businesses should be high on the list especially those offering on-site, skilled services or specialized services that can’t be out sourced.

    • steve | October 17, 2017 at 2:09 am

      why not the 10 best to open? you think people are considering opening video rentals?

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