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 fail within the first five years.
Help ensure your success by steering clear of these likely-to-fail businesses.
Opening a restaurant is no small order, as the 23% 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.
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. In 2022, publisher’s audiobook revenue grew 10%. This is the eleventh year straight showing double-digit growth.
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, around 60% of households are using a streaming video service.
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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