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4 Business Ventures Most Likely To Fail

Launching your own business is an exciting, challenging, and potentially rewarding way to make a living. Yet on average, your chance of success is almost the same as the likelihood your business will fail — the five year survival rate for Canadian businesses is 51 per cent, according to the report The State of Entrepreneurship in Canada.

Statistics show us that of that 49 per cent that don’t make it, certain types of businesses fail more than others. Can you guess what they are? Read on the find out.

Independent Restaurants

Approximately 60 per cent of independent restaurants fail in the first three years, reports The Globe and Mail. Long hours, lack of experience, the wrong location, juggling cooking and “restaurant” work with the never-ending “business” work including money management and marketing stretch restaurant owners thin.

Retail Stores

In the States, around 80 per cent of retail stores fail in the first five years. Competition from big brands well-known names, prime (and expensive) high traffic mall locations, and loads of startup and marketing dollars make this one tough industry to crack.

Direct Marketing Businesses

Another sector with a high failure rate includes businesses based on a direct marketing platform. American studies find that lack of training, poor sales skills, and not investing enough work hours means that direct sales businesses have a higher than average business failure rate.

Transportation

Whether you’re planning to start a taxi business or become an independent long-haul trucker, transportation businesses are among the least likely to succeed. High startup and licensing costs, long hours, difficulty hiring qualified staff, and the rise of “Uber” style services give transportation services a high failure rate, according to American sources.

What about in your area? What types of businesses do you see struggling to make a go of it?

Wondering what the odds are of your own business success or failure? Check out the Government of Canada’s Small Business Survival Tool where you can filter statistic results by sector.

 

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