For many people, starting a business is an exciting idea. Others, who may have lost their jobs during the coronavirus pandemic, may see it as a necessity. Before jumping in, though, you should make sure you research your options thoroughly.
Many business ideas sound great on paper, but the reality can be completely different. Some or all of the 10 business ideas listed below may appeal to you, but all of them would be extremely difficult to execute successfully in today’s business environment. Before diving into any of these industries, consult with a small business expert to see if you should consider looking elsewhere.
pet supply store
It’s well known that pet owners are willing to spend almost anything on their furry friends. In fact, many owners consider their pets legitimate family members. Opening a pet supply store therefore sounds like a great idea, with a guaranteed flow of customers. The problem is competition and prices. Pet supplies are now readily available in a number of places beyond pet supply stores, including pharmacies, grocery stores, and many online outlets. As with any business, if you can find a place where you’re the only pet store within 100 miles, you might be onto something. However, for everyone else, it might not be the best option.
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Few things sound more glamorous than being a travel agent. Between helping clients travel to exciting places around the world and visiting those regions yourself, the idea of being a travel agent is a dream come true for many. However, times have changed. About a third of all travel in the United States is now booked online, and the number of retail travel agencies is declining. Although there will always be in-person sales at travel agencies, the industry is clearly on the decline. One possible way to counter this would be to operate a niche or specialized agency, but you’ll need to do your homework to be successful.
Opening a restaurant has always been tricky business. According to Fundera, historically, about half of all restaurants fail within the first five years. However, with the lingering effects of the coronavirus pandemic, this overall failure rate will undoubtedly increase. Entering an industry with a historically high failure rate at a time when restaurants are facing huge headwinds seems like a particularly risky move.
Blogging is an attractive industry for many because it is an opportunity for self-expression. There are also very few barriers to entry. Overall, blogging seems like an easy way to make money. However, the reality is below. To make money, blogs traditionally rely on ad revenue. But there are only a limited number of ads that users can click. This is where the low barrier to entry really hurts bloggers. With so many blogs and advertisements, it is difficult for an individual blogger to generate income. Unless you already have a large following on social media, are a recognized celebrity, or have a particularly interesting niche, earning real money as a blogger can be difficult.
Just like blogging, there are very few barriers to entry if you want to open an e-commerce store. However, an e-commerce store shares many of the same barriers to profitability as a blog, especially visibility and competition. If you plan to make sales in your online store, you need to let people know that you are online and available. If your site isn’t showing up in search engine rankings, you’ll be lucky to get even a few sales, no matter how good your products are. Even if customers know you exist, you’ll be competing on price and product quality with countless other sites, including well-known retailers like Costco, Target, and Walmart. You can get sales from a one-of-a-kind product, but if you’re trying to generate a lot of money, e-commerce is a very difficult path to take.
Repair of electronic or household appliances
If you’re good at fixing things, you might be considering getting into electronics or appliance repair. After all, things break all the time, don’t they? Unfortunately, there are a number of headwinds when it comes to being an independent repairer. For starters, electronics and appliances are getting cheaper and cheaper. By the time a product is out of warranty, many consumers are more willing to simply purchase a new product rather than pay for a repair, especially if the price difference is not too great. In American consumer culture, many customers upgrade their appliances or electronics every few years anyway, even if they aren’t broken. Ultimately, it becomes increasingly difficult to succeed as a repairman, especially if you have just started a new workshop.
Transportation services may appear to be always in demand, and therefore solid business opportunities. Unfortunately, the landscape for these types of businesses has changed dramatically over the past decade. Ride-sharing companies like Uber and Lyft have drastically reduced the taxi and limo business, and even the coronavirus pandemic has made riding in public vehicles less attractive. Specialized transportation, such as amusement rides for the elderly, may be a viable niche, but even that would require jumping regulatory hurdles. Overall, the business is challenging for any new entrant, with existing players with established infrastructure dominating the industry.
Good photographers have always been in demand, especially for weddings, family portraits and other special events or occasions. But there’s no denying that the proliferation of high-quality cameras on smartphones has diminished the need for professional photography services. The Samsung Galaxy S20 Ultra, for example, has a 108MP camera, 8K video and 100x digital zoom, specs that were pro-grade in the not-too-distant past. Although photographers are still in demand for certain special occasions, the general need for photographers is rapidly diminishing.
The corner liquor store used to be the easiest and best way to find your drink of choice. But these days, like many retail operations, you can get almost anything you want from a wide variety of sources. Big-box retailer Costco is actually the nation’s largest wine merchant, and online sources and even grocery stores are now stocking their shelves with a wide variety of liquor. Many of these sources are actually cheaper than independent liquor stores, and buying liquor at regular runs is quite convenient for most customers. There will always be impulse purchases at liquor stores, but the competition in the industry is brutal.
When it comes to dream businesses, opening a nightclub is high on the list for many. Who wouldn’t want to offer a hip experience with shows, specialty cocktails and good vibes? Again, however, the reality of this type of business is usually far from fantasy. Even in the best-case scenario, a nightclub needs a good location, publicity, and some type of attraction to attract crowds from other entertainment venues. In 2020, the coronavirus closed all nightclubs, and many will never reopen. Even if the pandemic subsides as expected, there may be continued reluctance from customers to cram into small areas for some time to come. In short, starting a nightclub now might be a short-lived experience.
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This article originally appeared on GOBankingRates.com: Business ideas that sound good on paper but fall short