The vast majority of businesses fail. Statistically, 2 out of every 3 businesses never exist beyond a decade. In other words, when you start a business, you are more likely to fail than succeed. This is not to discourage you but to put things into perspective. Technically, any business can either succeed or fail. Thus when saying ‘low failure rate’ this implies roughly a 95 percent success rate. These are businesses with an extremely high likelihood of succeeding. Let us explore some of the businesses with low failure rates.
The basic idea is to own land and monetize it somehow. Real estate is quite broad, so you need to understand the dynamics. For example, which is the most lucrative constituent of the real estate market? You will find that it is typically commercial real estate. This usually entails such as residential, office spaces, parking spaces, retail and industrial spaces. Real estate value often appreciates more over time. It is not surprising that almost all notably wealthy people have interests in real estate.
An on-demand service is a service that is always sought after and readily available at any given time. The on-demand industry is literally like an economy in itself. For example, people generally need the services of experts with specialized skill sets. This can be a plumber, an electrician, a fitness trainer, a tutor, a hairdresser, and the like. It can also be areas such as dry cleaning, household cleaning, and consumer goods (e.g. FMCG).
We can also look at it from the standpoint of accounting, taxation, consultancy, marketing, legal, and writing services. As you can see, the list goes on and on. Businesses dealing with any of such on-demand services have a low failure rate. This is because the services are sought virtually daily, and the clientele is ever-growing. These businesses also easily enjoy repeat purchases, referrals, and word-of-mouth marketing.
There are lots of niching options in transportation. We have passenger service vehicle services. This can be ferrying people along defined routes using, e.g. light motor vehicles, kombis, and buses. Then it can involve taxi services and hiring services. When you look at most success stories in this domain, they started out small. This is because transportation businesses are scalable due to two things. You can have more or less predefined and sustainable revenues over time.
For example, imagine you have a bus that caters for the Masvingo to Harare route. That would mean you two trips daily, i.e. to and fro. Daily you can project what you get and can plan ahead. With proper financial management, you can grow your fleet easily. In the same vein, other services such as repairs, spare parts, maintenance and the like are good businesses here too. Overall, as long you do not ignore the fundamentals, transportation has a high success rate.
Have you ever been to a private hospital or a pharmacy? Well, most of us have been, and most of us pass by such almost daily. When you look at those places, you will realize how much people need healthcare. I can cite an example of pharmacies in Masvingo CBD. There were very few pharmacies in that CBD for a couple of years. Yet now their number has shot up over a very short space of time. Some of the new entrants are branches of pharmacy brands that are widening their branch network in Zimbabwe. This shows the potency of business involving healthcare provision. The same goes for private hospitals or private clinics; they keep popping up.
This is all because the prospects in this type of business are high. Plus, the success rate of such businesses is quite high. That is why it is easier to survive and expand your reach by opening more branches. The failure rate for healthcare services is so low that they are considered inflation-proof services. No wonder they are thriving right now despite the hyperinflationary environment. That is a case in point!
Important To Note
There are countless other businesses implied through the ones we discussed. Look at everyone we discussed, and you will see they can branch off to others we did not mention. For example, we mentioned consumer goods such as FMCG under on-demand services. By implication, this means agriculture is a domain characterized by low failure rate businesses. Thus you should not be blinkered by looking only at the real estate, on-demand services, transportation, and healthcare that we covered. They all point to countless more business ideas with low failure rates.
Starting any of these businesses does not automatically mean you will not fail. This is just a guide to point you in the right direction if you want to increase your chances of success. Otherwise, the tenets of properly running a business still apply. It is also worth noting that low failure rate businesses tend to be swarmed. This means competition might be intense, given how most people prefer starting such businesses. I once did an article on the top 12 causes of startup failure; kindly check that out. Get to know and be wary of them even as you run these businesses with low failure rates.