Gabriel B. Ajak | December 31, 2024

Five Businesses That Rarely Fail and Cost Less to Start

Starting a business can be daunting for young and aspiring entrepreneurs. One of the most critical decisions they face is choosing the right business model, which can significantly impact long-term success. The article “5 Businesses That Rarely Fail and Cost Less to Start” highlights a few industries known for their economic resilience, stability, and promise of sustained growth. The article will explore these industries in detail, including real-life case studies, testimonials, and practical insights to inspire your entrepreneurial journey.

1. Senior Care Centers

As the aging population grows, senior care centers represent one of the most dependable and impactful businesses. These facilities provide essential services, often supported by government grants and programs, making them financially viable.

“When my father struggled with dementia, I realized there weren’t enough quality senior care facilities in my area,” shares Monica, a former nurse who worked at the Texas Medical Center for over a decade and now runs a mid-sized senior care center in Houston. “Opening this center was a personal mission, but it’s also been a stable and fulfilling business venture.”

Business Strengths

• Senior living care business has an impressive success rate of 97% across all studies.
• It is a subsidized operation. Federal and state funding and tax breaks ease financial burdens.
• Senior living care has the highest business demand and growth. The global senior population is projected to double by 2030, and 75 million baby boomers are anticipated to retire in the United States, ensuring long-term demand.
• Senior care and living centers have a significant impact on the community. These facilities fulfill a vital societal need, fostering goodwill and enhancing their reputation.

2. Laundromats

Laundromats have long been a recession-proof business. They cater to everyday needs, requiring minimal labor while offering a steady income. Their success lies in their simplicity and high repeat customer base.

Here is the story of an entrepreneur who owns a laundromat. Carlos, a retired teacher, invested in a laundromat in a working-class neighborhood in Texas. “At first, I was worried about competition, but my research showed there was only one other laundromat nearby, and they didn’t have updated machines,” he says. After renovating and introducing eco-friendly washers, Carlos saw a 30% increase in foot traffic within six months.

Business Strengths

• Laundromats have a high success rate of 95% in the first five years of its operation.
• It is a self-service model business that reduces operational costs with minimal staffing needed and regular demand from individuals without access to in-home laundry.
• Its self-serve business model produces a durable revenue stream (DRS).
• It presents a sense of belonging to a community. Laundromats are essential services for lower-income and high-density urban areas.

Challenges to Consider

• Maintenance of machines can be costly if not well managed.
• It requires upfront investment for equipment and leasing to the right location.

3. Self-Storage Facilities

The self-storage industry has quietly become a booming asset class fueled by urbanization and shifting lifestyle trends. Whether it’s downsizing, decluttering, or storing seasonal goods, self-storage facilities fulfill a growing demand.

“I was hesitant about entering the storage business because it didn’t seem ‘sexy,’” admits Priya, a real estate investor. “But once I researched the numbers, I realized it was a gold mine. People don’t stop needing storage—whether they’re moving, renovating, or just holding onto things. My occupancy rate is over 90% year-round.”

Business Strengths

• Self-storage facilities have an impressive success rate of 92%.
• Self-storage is a low-maintenance business. Self-storage is a low-maintenance business that requires no inventory, minimal staffing, and straightforward operations.
• It has consistent demand and benefits from consistent demand, as urban living and e-commerce growth create a stable customer base.
• Its scalability is feasible. Additionally, the business is scalable; storage facilities can be expanded with modular units to accommodate growth.

Challenges to Consider

• High initial costs for acquiring land or converting an existing building.
• Zoning regulations and location selection are critical for success.

4. Transportation Businesses

With the rise of e-commerce, transportation businesses have seen unprecedented growth. From last-mile delivery services to freight logistics, this sector has become the backbone of the global economy.

Ahmed, a delivery van driver and a resident of Katy, Texas, decided to start his own transportation business after recognizing inefficiencies in his employer's delivery routes. He partnered with local small businesses to create a reliable courier service. "I started with just one van, and now I have a fleet of five vehicles and contracts with three major retailers," he shares.

Business Strengths

• The transportation business has a success rate of 90%.
• Transportation has a very competitive high demand. The continued growth of e-commerce fuels consistent needs.
• It has a scalable business model. The ideal approach is to start small and expand operations with software and fleet management tools.
• Transportation has a global reach. Logistics opportunities exist both domestically and internationally.

Challenges to Consider

• Rising fuel costs and maintenance expenses.
• Intense competition from larger logistics companies.

5. Rental Properties and/or Vending Machines

Rental Properties

Real estate has always been a cornerstone of wealth generation. Rental properties, in particular, provide a unique combination of long-term security and passive income. According to a widely cited statistic by Andrew Carnegie, “90% of all millionaires got their wealth through real estate.”

When Emily, a software engineer in her late 30s, decided to invest in a duplex in a growing suburban area in Houston, she had no prior real estate experience. “I started small,” she recalls. “The rent from one unit covered my mortgage, and within three years, I bought another property.” Emily now owns six rental properties, earning enough passive income to retire early.

Business Strengths

• According to the Department of Labor statistics, rental property has an 85.3% success rate.
• Rental property has a simple business model, a consistent rental income, and fewer operational demands.
• It has tangible assets and properties that appreciate over time, ensuring long-term value even during economic downturns.
• Its market demand is steady, and as populations grow and urban centers expand, the demand for rental housing remains constant.

Business Challenges to Consider

• Fluctuating property values during recessions.
• Maintenance and tenant management can be time-intensive.

5.1. Vending Machines

Vending machines are an excellent choice for entrepreneurs with limited capital. These “micro-businesses” can be operated with minimal oversight, making them perfect for side income or as a scalable venture.

Jamal, a college student, started with one vending machine stocked with snacks on his university campus. “It was just a way to make extra money,” he explains. “But I reinvested my profits into more machines, and now I own 12 vending machines across two cities. It’s almost entirely passive income.”

Business Strengths

• The startup cost is between $3,000 - $5,000
• Low Entry Cost: Affordable to set up, with quick ROI.
• Flexibility: Machines can be placed in diverse locations—schools, offices, gyms, and malls.
• Revenue Potential: Offers steady income without requiring constant supervision.

Challenges to Consider

• Finding and securing high-traffic locations.
• Theft or vandalism can be a concern in some areas.

Let’s piece it together. The five businesses highlighted in this article—rental properties, laundromats, self-storage facilities, transportation businesses, vending machines, and senior care centers—offer a combination of stability, accessibility, and long-term growth potential. However, no business is entirely risk-free. Success requires research, planning, and adaptability.

Whether you’re looking to build passive income, create a lasting legacy, or address a growing societal need, these industries provide solid foundations for success. Take the time to analyze your resources, interests, and local market conditions, and you could soon join the ranks of successful entrepreneurs in these thriving fields.

Investment Exploration Questions and Answers (IEQA)

1. What does the article say about how government subsidies influence senior care centers?

Government subsidies significantly boost the success of senior care centers by providing. These factors make senior care centers an attractive and secure business opportunity.

• 97% Success Rate: As highlighted in the article, the senior care center’s exceptionally high success rate is mainly attributable to Uncle Sam’s financial backing.
• Financial Support: Subsidies, grants, and tax breaks reduce operational costs, making the senior care center business more viable and profitable.
• Incentives for Entrepreneurs: Financial incentives encourage more aspiring entrepreneurs to invest in the industry, ensuring supply meets growing demand due to aging populations.
• Lower Entry Barriers: Government programs often offer start-up assistance, making it feasible for new entrants to establish care facilities.

2. What does the article say about why self-storage businesses excel as an asset class?

Self-storage businesses excel for several compelling reasons.

• 92% Success Rate: As highlighted in the video, the proven success rate since 2008 establishes it as a robust and enduring asset class.
• Consistent Demand: Due to urbanization, downsizing, and lifestyle changes, there is a steady demand for storage, making it a reliable investment.
• High-Profit Margins: With low operational costs and minimal staffing requirements, self-storage facilities achieve significant profitability.
• Recession-Resilient: Economic fluctuations often increase demand as people move or downsize, ensuring steady occupancy rates even in downturns.
• Adaptable Spaces: Units are easy to repurpose or resize, catering to various customer needs. These factors make self-storage a low-risk, high-reward investment opportunity.

3. What does the article say about the barriers to scaling vending machine businesses?

Scaling vending machine businesses poses challenges primarily due to logistical and operational limitations.

• High Maintenance Requirements: Managing more vending machines requires frequent restocking and servicing, which may increase operational complexity for an aspiring entrepreneur.
• Difficulty in Location Expansion: Securing premium locations involves competition, high rental fees, or compliance with local regulations, making expansion challenging for an entrepreneur with limited business connections.
• Limited Scalability of the Model: Each vending machine operates as an independent unit, requiring individual servicing and monitoring, which restricts large-scale automation.
• Capital-Intensive Growth: Adding and maintaining new machines can quickly escalate costs, particularly when coupled with low initial profit margins per machine.

Though the above hurdles are some things, the entrepreneur must remember when exploring investment options in vending machines, the success rate shows that these hurdles may not be as severe as you might think. Some entrepreneurs have successfully overcome these hurdles by focusing on strategic partnerships, leveraging technology for remote monitoring, and targeting niche markets.