Is This the Best List to Choose Your Business Idea or Just an Arbitrary List?
There are tons of people out on social media giving business advice. Some of it is good advice, but most of it isn’t good. In this new series watch CapForge’s owner react to different advice videos. He’s an expert in all things business and has 20+ years of experience under his belt. Some of the things he reacts to might even surprise you!
CapForge Founder and Owner Matt Remuzzi reacts to this list of “high success rated” businesses.
Video Transcript:
Business Advice Video:
Top four businesses with the lowest failure rate. The fourth one is my favorite. No. 1 laundromat. They are extremely successful and they’re not just there to launder money like you see in movies. With a success rate of 95%. No. 2 self-storage. A place of people leave their old junk forever, with a success rate of 92%. No.3 vending machine, with a success rate of 91%. No. 4 Real Estate, which has created the most millionaires in the United States with a success rate of 86%. Follow for more.
Matt’s Review:
Okay, I’m not sure how he’s defining success rate or what stats he’s using. Certainly, laundromats go out of business or don’t make money. It can definitely happen or things change, demographics in the neighborhood change so it no longer makes sense or all kinds of things can happen. So I wouldn’t necessarily go right to a laundromat as a sure-fire business and because they are – they have the perception of being pretty sure-fire, he is not the only person
saying this, they cost a lot of money. If you buy a laundromat the investment in that business is a lot higher than investments in other businesses. And I wouldn’t say it’s a guaranteed sure thing by any means.
The other one, you know, vending machines we’ve talked about before. They’re really – it comes down to the location. If the location isn’t good they’re not gonna work, so if you only count ones that are put in good locations then the success rate might be high. But there’s a ton of people out there who have vending machines stuck in their garage. Haven’t found a place to put them. Completely lost money on that whole venture. So the stats have a lot to do with how you rate this. And then real estate 86%. I have no idea how he came up with that. Is that people who invest in rental real estate, 86% of them make money. Maybe, I don’t know. But again it’s very specific to the market and the property buy and how you manage it, everything else. So there are some that would be sure-fire things every time and others that would be sure-fire failures every time. So you can’t just jump into real estate saying I have 86% chance of success without knowing the details.
Your chances might be 100% or they might be 0%, so who cares what the overall average is. You wanna know what your chances are for your business in general. I wouldn’t look at I wanna start a business that has a high success rate, because that’s really individual. You wanna start a business that works for you. That you’re gonna have a high success rate at and it may be none of the ones on that list. It may be something that is very unique and specific to you. And maybe does have a high failure rate for a lot of people but you have the right ingredients to do it, like restaurants. Restaurants generally perceived to have a pretty high failure rate, but if you happen to have 20 years of experience as a chef at other highly rated restaurants and you got the backers in, the right concept, in the right location, you might have 100% chance of success in opening your restaurant. And that doesn’t mean you shouldn’t do it just cause it’s not on this list. And doesn’t mean someone else should open a restaurant if they have no idea what they’re doing. So these kinds of lists and stats are pretty meaningless as far as I’m concerned when it comes down to what you should do. You should do what you’re gonna have the highest success rate at, not what someone else’s list says.
