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In today’s economy, which startup businesses are just plain likely to fail? Of course, a lot depends on who is doing the starting up. But experts say there are certain businesses that are more likely to fail than others.
“There’s this very sad pattern about how people start businesses,” says Scott Shane, an entrepreneurship professor at Case Western Reserve University in Cleveland, Ohio. “People are most likely to start businesses in industries where start-ups are most likely to fail.”
Which are the worst startup businesses for Arkansas right now? Better yet, which are the best? Let us know in comments.
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Startups are always a risky business and most fail. The sectors the article covered are just seven possibilities from a myriad of ways to do it wrong. Focus on few key themes can make a big difference such as:
- You better be an expert in whatever business you start. Knowing that customers will buy what you offer is fundamental. That means for any potential startup you really need to know the market opportunity, customers, and competition. There is no replacement for experience and research before you start the business.
- Learn the numbers. Do worst case, realistic projections for both revenues and expenses. Secure startup capital to meet the worst case.
- Don’t start the business if you aren’t prepared to work for nothing or close to nothing for a long time. The early days are really tough and until the business is sustaining through either cash flow from sales or outside capital, plan on eating pizza and Mountain Dew and not having much of a social life.
Even with all of this said, the adversity in a downturn can definitely give birth to great businesses if you have the tenacity to make it happen.
The worst startup I can think entering right now is Real Estate – it is not easy to get established sales and competition is very high for a more limited market.