Starting your own business is a dream for many of us, but it can be a daunting and terrifying endeavor, especially given the high failure rates. According to the US Bureau of Labor Statistics, 20% of small businesses fail within their first year, 50% within five years, and 66% within ten years. Despite these statistics, some industries defy the odds and boast remarkably high success rates. Understanding the success rates of different industries can help us make more informed decisions when starting a business and improve our chances of success. Here are seven business ideas with low failure rates and the potential to earn upwards of $7,000 a month when done right.
1. Rental Property Business
Real estate has long been a lucrative field. Andrew Carnegie famously said, "90% of millionaires got their wealth by investing in real estate." The rental property business boasts an 85.3% success rate. With predictable expenses like utilities and mortgages, real estate can provide both monthly cash flow and long-term capital gains as properties typically appreciate in value over time. You can even start without owning property through rental arbitrage by renting a property at a lower rate on a long-term lease and subletting it on a short-term basis.
2. Laundromat Business
Laundromats have a success rate of 94.8% over five years. They require minimal staff, often just one person or none at all, thanks to coin-operated machines. Laundromats also offer a high return on investment (35% on average) and consistent cash flow as customers pay upfront. They are recession-proof since people always need to wash their clothes, and they are not affected by seasonality or e-commerce competition.
3. Self-Storage Business
With a 92% success rate, self-storage facilities rent out storage space to individuals and businesses on a short-term basis, typically month-to-month. They have lower startup costs compared to other real estate ventures and can often operate with minimal to no employees due to automation. The self-storage industry had a market cap of $39.5 billion in 2021 and is expected to grow to $44.6 billion by 2024.
4. Cleaning Business
The demand for cleaning services is on the rise due to remote work, busy lifestyles, and an aging population. Starting a cleaning business requires a small initial investment, and satisfied customers often lead to repeat business, providing a steady income. The cleaning industry had a market value of $168 billion in 2022 and is expected to surpass $276 billion by 2028.
5. Vending Machine Business
Vending machine businesses have an 82% success rate. You can start small with one machine and expand over time. Vending machines require little upkeep and can sell a variety of products, from snacks to personal care items. The industry had an estimated market value of $60 billion in 2023 and is projected to reach $43 billion by 2024. You can typically recoup your investment within 12 to 18 months.
6. Senior Care Centers
Senior care centers benefit from government subsidies and a growing elderly population. The number of Americans aged 65 or older is expected to nearly double by 2060, increasing the demand for senior housing. Senior care centers are considered recession-proof as people downsize during economic declines. The sector saw annual investment returns of 11.6% over ten years, according to the National Investment Center for Senior Housing and Care.
7. Special Needs Care for Kids
Approximately one in six children in the US has developmental disabilities or delays. The market for special education software and special needs care is growing, driven by increasing awareness and diagnosis rates. Government funding and subsidies often provide financial stability for these businesses. While starting a special needs care business requires specialized knowledge, licensing, and adherence to regulations, the potential for financial and social reward is significant.
Starting a business is never without risks, but choosing an industry with a high success rate can increase your chances of achieving that crucial first win, boosting your confidence and motivation to keep going.
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