Do you want to start a business, but are worried about the high risks associated with every business idea out there? It’s a valid point. According to data from the US Bureau of Labor Statistics, about 20% of US small businesses fail within the first year.
Around 50% by the end of the 5th year, and after 10 years, two-thirds of businesses have gone under.
But these are sobering statistics. The good news is that there are certain businesses that have remarkably high success rates. We are going to cover in this article seven of the best offline business that you can start right now with a low risque of failure.
Before we jump into these business ideas, you should already know that there is no business that will never fail. Any industry where you can make serious money is going to have some risk associated with it.
In fact, there is a well-known principle called the “risk-return tradeoff” that states that as the potential return rises, so does the risk. It’s why trading stocks and especially cryptocurrencies produce much higher gains over the long term than a typical bank savings account.
Now if you look at really high-yielding assets, like businesses, they can often generate returns well above 30%. But all of that comes with some serious risk of failure, as we covered at the beginning of this article.
But don’t lose hope. As we mentioned above, we are going to cover 7 types of businesses with very low failure rates. We will also include data showing these low failure rates and point you to some great resources to show you how you can get started in these businesses.
Now we want to emphasize how important it is to examine failure rates if you are thinking about starting up a business. Most entrepreneurs devote a lot of time, energy, and money to launching their new company.
If you are thinking about starting a new business, it’s crucial that you pick one that is likely to succeed. Maybe you have an exceptional business mind and can buck the trend. But, like Katniss Everdeen, we find that having the odds in your favor is always a good thing.
Without any further talks, let’s get into it and reveal seven offline businesses that you can start in 2022 with amazingly low risks!
Low-Risk, High-Reward Businesses to Explore
Laundromats is one of the best business ideas that has a really low failure rate. According to Laundrylux, laundromats have a 95% success rate over a 5-year period! Again, nothing is guaranteed in the entrepreneurial world, but that seems close to the perfect business.
This is a great recession-proof business that can make you money no matter what else is happening in the economy. After all, people will always need to get their clothes washed and dried, meaning you could have recurring customers who are consistently willing to pay you all over the year if they find what they were looking for which is: good service and excellent washing machines.
The great thing about a laundromat is that it can be run mostly passively. The machines do all of the hard work of washing and drying the clothes, and your customers do the work of loading and unloading the clothes. You will still need to take care of cleaning the laundromat, making repairs to the machines when needed, and collecting the money from the machines, but even for these activities, you can hire people to do them for you.
|Not seasonal, weather, economic dependent||Highly competitive market|
|Minimal employees/resources management||Large upfront investment|
|Potential for scalability (Multiple Locations,…etc)||Operating costs (Sometimes)|
|Flexibility and simplicity||Acquiring customers|
2. Rental Property Investing
The real estate business has been growing popular on the internet in the last few years, and there are so many gurus talking about it. But it is so vast and can be in many forms and formats. So even if everyone is talking about it you can still get a lot of profit out of it. Renting properties is a format of the real estate business.
To start a renting property business you need to go through two main core steps:
- Make a Plan: your first step is to pick one type of rental propriety to start with(single-family home, commercial property…etc)
- Choose Your Market: Invest where the number makes sense, you don’t have to drive to the location where you got your investment property, and try to understand as much as you can about that market.
Why is real estate such a great business idea? and notably rental property in this case? You can enjoy cash flow each month, your tenants pay down your mortgage for you, and your properties tend to appreciate over the long term. Plus, your rental property business can be structured to generate passive income. All you need to do is hire a property manager. Or you can build a team around you of other real estate investors based on trusted professional people’s recommendations. This way, you faster results with almost guaranteed success.
|Regular monthly income||Need some fundamentals skills|
|Deduct losses for tax purposes||Capital and credit required|
|Less volatility (performance is more |
predictable over the long term)
|Lack of liquidity|
3. Self Storage Facilities
If you like the idea of real estate investing but don’t like to deal with tenants, trash, and toilets, a self-storage facility might be a good option for you to invest in. It’s a growing business that could hit over 22 billion dollars in the few last years, and these resilient companies have a staggering 92% success rate.
People are always buying a lot of stuff from Amazon, Walmart, and other online companies. Meaning they need somewhere to store all the things they buy and don’t use anymore, and they don’t want to throw anything away. So a storage place is as important as a home nowadays.
What we also like about managing a self-storage facility is if you want to make your self-storage business as passive as possible, you can start an automated self-storage business. New technologies make this not only possible but easy. People can now use a mobile application to book the storage unit, obtain the code to unlock the unit, and simply move their stuff in. No onsite manager is needed. You can also reduce human errors and expenses.
|Reliable in all economies||Highly competitive market|
|Demand for storage is high and relatively reliable||Security|
|Opportunities for additional revenue streams||Location can be tricky|
|Less unexpected expenses||Lower actual net operating income ‘NOI’|
4. Transportation Businesses
After the global health pandemic, and with the growing interests in e-commerce, gig economy, and online platforms, it is more lucrative than ever to start a transportation business. If you don’t know how it works, a transportation business is simply a business that delivers goods or people from one place to another for a fee. It can come in many forms, from a full-fledged long-haul trucking business to a simple little side hustle driving a bike for Uber Eats on the weekends and everything in between.
This business idea has a very good success rate of 76.4% according to an article by Advisor Smith
Now, your results may vary, and certain transportation businesses are going to be riskier than others. But on average, you are looking at a really solid success rate. You just need to pick the best strategy by analyzing the existing demand, prospects clients, and geographical area.
|Flexible capital Investment||A longer sales process (it can be hard to attract customers)|
|Adaptable Service with a simple business model||Highly competitive market|
|High customer retention rates with a predictable income stream||More challenging to earn passive income|
|Unlimited income potential ‘Scalable’||Require good management skills|
5. Vending Machine Routes
One of our favorite businesses is a vending machine route. It is a simple business model with a relatively modest investment, like 2 to 6 thousand dollars, you can buy one or multiple vending machines and just get started. (You can find vending machine routes for sale on eBay or any other marketplace, prices vary from $800 for a used one to $3000+ for new ones.)
Once you completed the first step by finding a good vending machine according to your budget, all you need now to do is find a safe and well-trafficked location that will generate sales for you. It’s really as simple as that.
You can start with a single machine to figure out how the business works and then slowly expand (Don’t worry, the worst that can happen is you will have slow sales in the first few days, but you need to be patient).
Before you know it, you could understand the vending machine winning formula, get multiple machines, test multiple locations, hire employees to fill out the machines, and generate thousands of dollars a month in mostly passive income for you.
So, what is the success rate for a vending machine business? A whopping 91% according to Drop’s Vending, a long-standing provider of nationwide vending services.
|Low start-up costs help minimize risks||Competition in Proved Locations|
|Simple business model||Technical problems with machines|
|Complete control of your business’s growth||Income remains the same unless you expand|
|Unlimited income potential ‘Scalable’||You need to adapt to new vending machine technologies|
6. Agriculture Businesses
Agriculture is one of the most important contributions to the global economy since it feeds billions of people every day. Agricultural business refers to the manufacture and sale of agricultural products such as farm equipment and supplies machinery and other farm-related services, in addition to real farm activities.
Agriculture businesses are highly resilient and tend to have a very low failure rate. The failure rate can approximately hit 0% if you met two conditions, you love what you do (Agriculture), and more importantly, you know what you are doing.
Your first step in the agricultural farm business plan is to do your research about where you are going to sell your product in a local farm market, to chefs, or at the farm stand. Having a clear idea of what will you actually grow, who you are going to sell, and what the demand/supply for it in the selected area are the fundamentals when you get started. After that, you need to design your land and start the production. (These steps need in-depth documentation and more technical knowledge)
|A large market for agricultural products||Time-consuming and physically demanding|
|You can start with a low initial budget||Unpredictable and Harsh Weather|
|Sense of achievement||Finding good employees|
|Government benefits||You need to adapt to new vending machine technologies|
7. Dump Truck Business
Assuming you live close to mining activities, there will probably be interest in dump trucks that can pull away coal or different materials being removed from the mine. Remarkably, you don’t need to put a large capital to begin a mining activity. A second-hand dump truck can be purchased for nearly $15,000. Not only that, dump trucks are most of the time versatile.
The first thing that comes to mind when you think about starting a dump truck business, is how can you get clients? That should be hard, you don’t know anyone who works in the business and you don’t have any idea how it works!
Well, that’s easier than it looks, because we got your back. One way to get your first clients is to get in your car and start searching for random dump trucks, once you find one, just start following follow it.
Wait until they finish their job, and go ask them about the business and where can you get work from, and explain your situation. If you met with the wrong man, it’s totally okay just go for the next target. If you find a helpful driver he will end up presenting you to the project manager (That’s what we wanted from the beginning.)
By following this process you are building your network, do it multiple times until you end up having a full-time schedule for your first dump truck. And before you know it you will have an army of dump trucks working for you.
In addition to that, this process will let you how much demand is in the market and you will discover new opportunities in this business. For example, there is plenty of demand for these services coming from construction companies, landscapers, real estate flippers, and even residential property owners who need to haul away large amounts of junk.
|Stable investment||Pricing (Depends on the competition)|
|Good return on investment – ROI||Dump Truck breakdowns|
|Potential for Growth – Scalable||Finding trusted drivers|
|Steady demand over the course of a year||Unexpected expense (Fuel)|