Let me state that no business is immune to failure. Risk is often a contributing factor, but risk also means that the potential return is greater than a business with low risk.
According to the “Risk Return Trade-off” principle, the potential return of a business increases proportionally to the increase in risk.
That is how individuals differentiate between potential low and high-return ventures.
According to the US Bureau of Labor Statistics (BLS), 18.4% of businesses fail in the first year, rising to 49.7% after 5 years.
Some businesses just have a lower success rate due to the Risk attached to them.
However, this doesn’t mean that you should just give up on your dreams of starting your own business as there are plenty of businesses that offer low-risk, yield steady returns, and have a high success rate.
It comes as no surprise then that one of the wisest things to do when you’re just starting in business is to choose a business with low risk, and one that has a decent chance of succeeding.
We all want the “big money” and we fancy ourselves to be “The one that will succeed against the odds”, but when starting, I think we can all agree that it’s always better to have the odds in your favor, right?
Below I’ll introduce you to 3 businesses with low risk but despite this, they are businesses that will always be in demand.
Vending Machine Business
That brings us to our first entry in this list- the Vending Machine Business. This is a business with a very high success rate- up to 90%.
With a Vending Machine Business, you don’t need the overhead of the Marketing costs associated with most businesses (a large part of why businesses fail). Instead, you rely on what we call, “feet”- the amount of traffic that crosses your business premises. Choose the right location, and you’ll have success right out of the gate.
Another advantage of a Vending Machine Business is that you do not need staff, therefore there’s no need to pay salaries, provide training, and everything that comes with managing staff.
You have a business that operates 24 hours a day, 365 days a year, earning you passive income- money while you’re sleeping.
It’s a pretty hands-off, all-cash business that can be run from home, or while you’re holding down another job.
You’ll be making money from the first day and again- it’s all cash. No cheques, no credit, no problems with change or exchanging money. It’s all automatic.
What a fantastic way to make money!
We can now move on to the second entry on this list- Transportation.
There are several possibilities in the Transport business that you may want to research and analyze first in your area, but if you have a good strategy, you stand to make a lot of money in the Transport industry.
There are several niches within the Transportation industry you may want to look at from low to high-ticket ventures, but they all offer pretty essential services, and there will always be demand for these services. All year round, in good times or bad.
They are- Bicycle Rental, Livestock Transportation, Medical Transportation, Employee Shuttling, Dump Trucks, Boat Transport, Marine Services (using your boat for transport), Limousine Services, Taxi Services, Senior Services, and more.
What sets them apart, is the amount of risk associated with each, and the level of demand. They will all yield a steady income, but, if you want to maximize your earnings- “Risk” and “Demand” are solid indicators of high returns.
Keep in mind that there are 2 main areas of business in the Transportation sphere: Public and Private Transport.
In these post-epidemic times, growth in both these industries may be slower than in pre-pandemic times, however, there is growth. The global transportation industry is expected to grow at a rate of 3.4% through 2027.
Fuel costs may have sky-rocketed, however, this does not stop the industry from servicing demands. 80 percent of American cities get all of their goods solely by truck so the trucking industry isn’t going anywhere.
The increase in fuel prices has also opened up other possibilities in the Public Transportation sphere, and regardless of the cost of fuel, Emergency services, staff shuttling, and many other niches within this industry continue to see growth in demand.
The Transportation industry, like Real Estate, is an Evergreen industry, with a high success rate.
This leads us to the final- and without a doubt, the number one business on this list- Real Estate.
What can be said about this business that has not already been said? More millionaires have been created in the Real Estate industry than all industrial investments, combined. Many wealthy and influential figures, across the world and history, owe their success to Real Estate.
But why is it such a lucrative venture? The answer to that is Amortization. Due to the power of debt, your tenants or renters will pay off your mortgage, while you’re looking at a steady monthly income potential of between 6-12%, perhaps even more.
Most wealthy people avoid speculative investments and instead, prefer asset classes over which they can exercise “Control”. Real Estate is probably the number one asset class in this category, which is why so many have been successful in this business.
Speculative investment offers big returns, but some of us prefer to be in control of our business, right?
You see, unlike other speculative investments that require someone who has to assume that values will increase, with Real Estate you are “in control” of the value of your properties. You can raise the rent or upgrade or make changes to the property to raise the value as you see fit.
There will always be demand for housing or rental property, but remember, the 3 key success factors in Real Estate are: Location, location, location!
Without a suitable location- you will find it very difficult to take advantage of all the other tactics that will enable you to run your Real Estate Business effectively- the most important being, “Control”.
That’s because the Location is Permanent. Secondly, it determines Supply & Demand, and finally- it determines Appreciation.
If you combine all of the above- a steady monthly income, a business that’s guaranteed to pay for itself, assets that are guaranteed to increase in value over time, with cost and profit margins that are within your control- it’s no wonder why the Real Estate business is such a lucrative and steady business model.
A business that solves problems, will never be unsuccessful. If you are an entrepreneur looking for a business idea- identify a problem and provide a solution for it, and you will be successful!
At the same time, it’s often wise to steer clear of reinventing the wheel when you’re starting. A traditional business like the aforementioned models may just be the ticket you need to fund your future investments. They’ve stood the test of time, and their longevity is a testament to their success.