4 min read · Nov 11, 2023
Are you thinking about starting a business but worried about failing?
You’re not alone. According to data from the US Bureau of Labor Statistics, about 20% of small businesses fail in the first year, and only a third survive past the 10-year mark.
The good news is that not all businesses have the same risk.
By choosing the right opportunity, you can greatly increase your odds of success. In this article, we’ll explore the 6 business models with the lowest failure rates.
If you’re an aspiring entrepreneur looking to start a business with minimal risk, this article is for you.
We’ll provide an overview of beginner-friendly business opportunities in different industries that have proven to be recession-resistant and have high success rates.
Choosing the right business model can make or break your chances of success.
Minimizing risk gives you the best odds to not only survive but thrive. This guide will help you make an informed decision and avoid common pitfalls.
With a 90%+ success rate over 5 years, laundromats are a low-cost, low-risk business.
The startup costs are reasonable, usually around $100k to buy an existing laundromat. Operations are simple — quarters go in, clothes come out clean. Minimal staffing is required since the machines do most of the work. There is consistent demand as people always need to wash clothes.
Even in recessions, laundromats remain stable.
Tips for running a successful laundromat:
- Find a location with lots of foot traffic
- Offer wash-and-fold services for extra revenue
- Maintain machines proactively to avoid costly breakdowns
- Consider adding amenities like WiFi, TVs, arcade games
Real estate investing has proven to be profitable over time.
Rental properties like single family homes, multifamily units, and apartment buildings have a high success rate of 85%.
Benefits of rental property businesses:
- Hard assets that hold value
- Monthly cash flow from rent
- Appreciation, averaging 4% yearly gains
- Leverage from mortgages to buy more properties
- Tax benefits of depreciation and 1031 exchanges
Tips for profitability:
- Research markets with rising rents and low vacancies
- Do proper due diligence on properties before buying
- Keep a reserve fund for maintenance and repairs
- Hire a property manager if scaling to multiple units
With minimal staffing required, self storage units have seen a 92% success rate.
Technology enables remote management of these facilities. Customers enjoy simple, hands-off access.
Tips for a hands-off self storage business:
- Implement keyless entry systems
- Use security cameras for monitoring
- Enable automated billing and payments
- Offer moving supplies and truck rentals as value-adds
Transportation businesses like food delivery, ride sharing, courier services, and long haul trucking have around a 76% success rate.
Low startup costs and continual demand make these recession resilient.
How to start a flexible transportation side business:
- Sign up to drive for Uber, Lyft, Doordash for instant income
- Start local courier deliveries using your own vehicle
- Expand to leasing a vehicle or small fleet over time
- Focus on last-mile deliveries for retailers and ecommerce
Vending machines offer a hands-off business model with minimal risks.
You can start with just $1,000–5,000 to purchase machines. Then simply restock and collect cash. Success rates range from 82% to over 90%.
Tips for maximizing vending profits:
- Place machines in areas with steady foot traffic — offices, schools, etc
- Offer a mix of snacks, drinks and healthy options
- Keep machines well stocked and serviced to avoid breakdowns
- Consider diversifying into laundromats, ATMs, arcade games
With increasing demand and government assistance, senior care facilities have sustainable profits.
You can start small by purchasing a residential home and having it certified for assisted living. Limited initial investment and recurring revenue make this scalable over time.
Getting started with senior home care:
- Buy or rent a home and have it certified for assisted living
- Hire trained caretakers and nurses as your staff
- Market to families looking for quality care for elderly parents
- Provide transportation, activities and nutrition services
The risky failure rates of small businesses can be intimidating.
However, not all industries are created equal when it comes to risk. Following proven business models like the ones outlined here can help stack the odds for success in your favor.
By understanding the fastest paths to profitability, you gain the confidence to take the first step.
Start small, reinvest earnings into growth, and who knows — you may end up building an empire one laundromat or vending machine at a time.
Here are the key steps:
- Research low-risk, beginner-friendly business models
- Start lean and minimize initial investment
- Choose a business aligned with your skills and interests
- Implement proven systems and processes from the beginning
- Reinvest profits to scale up over time
The perfect business idea is out there waiting for you. Now go seize the opportunity!
