5 Biggest Risks Businesses You Should Not Start I Unboxing Startups
| 4 minutes read
Everyone talks about taking a risk, and it’s worth unlocking new opportunities in the entrepreneurial world. But sometimes, it can backfire on you. For instance, do you buy shares in the stock market that has not shown any growth, and it’s also fundamentally weak? No, right, because it’s a matter of loss and you can’t afford to lose your money.
Same way, few businesses can bleed you if you plan to begin a new startup. Starting a startup is easy, but maintaining its continuity is difficult. Therefore, today in this blog, we are going to talk about some highest-risk businesses you should avoid, and you can play safe. As we know, small businesses face risks, and there is always a chance of failure.
See taking risks is different, but investing or starting a business on too high-risk businesses is different. To avoid such financial losses, kindly read the blog till the end and we are going to help in your decision making.
Let’s get started!
1. Apparel stores
The apparel business is one of the riskiest businesses to start because few factors are involved, the primary reason is the cost, high product costs, tough competitors, presence of market leaders, etc. If you don’t have enough knowledge about the sector then don’t even think to step in, the retail sector has high investment and low profit, especially during the initial days. With high competition, small businesses can’t survive in the long term, which ends up with heavy losses.
If you need fast profits and are unable to cope with mounting losses in the early days of your business, you definitely should not start an apparel store. Market leaders like Titan, Provogue, Levi’s, Van Heusen, Park Avenue, and many others dominate the market.
The only way to make some money is by selling cheap-low quality products. However, such a strategy will backfire after some months.
2. Travel agencies
Starting a travel agency might sound fascinating, but the travel industry is a sector that has a high business failure rate. You will need to put in a lot of effort to promote your business online and offline platforms. Concerning that, you have to grow your customer base while simultaneously ensuring that you get back a good number of returning customers. It is not an easy task at all; the sector has cut-throat competition and very little room to grow significantly if you’re launching a new business in the travel sector. Market players like Club Mahindra, Thomas Cook, Yatra, Make My Trip, Goibibo, and many other agencies dominate the market.
To sum up, the main hurdle that you have to overcome here is marketing. If you do not have a solid marketing strategy and a large sum of money that you can spend on advertising, you should not become a travel agency owner.
3. Farm supply stores
Whenever you see the farm supply shop, you might think it is affordable. But, unfortunately, seeing and knowing the truth are two different things.
First of all, you will face stiff competition from other farm supply stores in your area. Not many people out there are starting their farms, which means that your potential clients have already been buying from other people’s farm supply stores for years, and your business is new in front of them. Earning these people’s trust is not easy because they are already using other buyers, and they must have an excellent old connection with buyers.
Second of all, if you want to succeed in this business niche, you will need to sell things for less money than your competitors and have more products to offer. It might sound easy, but in reality, it can put you in debt for decades to come.
4. Gas stations
First of all, it requires a considerable investment and for beginners, this is not what you should start with. For starters, you will need to deal with significant upfront costs, including the construction of infrastructure and the purchase of fuel pumps and gas tanks that can cost a lot and burn your pocket, although if you opt for a loan, there is no guarantee how much profit you will make. On top of that, you will have to account for the fluctuations in gas prices, which make this business idea much riskier than it already is.
5. Bookkeeping businesses
Starting a bookkeeping business might seem like a safe option, but it’s not for beginners.
It requires a significant amount of money to hire experienced employees and build the company’s infrastructure. Thankfully, there are ways to reduce the costs spent on equipment. Ideally, you should start a bookkeeping business if you have already worked in the industry for many years and know what it is about. In addition to that, you should learn how to reach out to potential clients and create a solid marketing plan.
Should you take Risks?
As we mentioned above, taking a risk in business and starting a company that is unsuitable for beginners are two different things. As we know, newbie entrepreneurs usually have limited funds, and why do you want to start a business where there is very little room to grow, and it also costs you high. So avoid these mistakes and accept the market reality; investing and starting a business in a high-risk sector is not a courageous decision. Let the world talk about you after your success.
Note- We are not saying starting a business into these sectors is terrible, but when we talk about a beginner/newly turned entrepreneur–these sectors don’t suit the various reasons mentioned above. If you’re a well-established entrepreneur, you can start a business in these.
Suprotik Sinha is the Content Writer with Synkrama Technologies. He writes about technologies and startups in the global enterprise space. An animal lover, Suprotik, is a postgraduate from Symbiosis Institute of Mass Communication (SIMC) Pune. He carries 6+ years of experience in Content Writing, and he also worked in mainstream broadcast media, where he worked as a Journalist with Ibn7 ( now known as News18 India) and Zee Media in Mumbai.