How to Minimize Business Risks For Better Profits

You might be able to make money by working on a job or working as a freelancer. However, you cannot build a fortune by working on a job or working as a freelancer. You can build your wealth only when you invest or build your own business. Investing can be better than starting your own business because when you invest. you do not need business skills, all you need is money and identify the lucrative market for investment. For example, if you want to invest, you can buy stocks, or invest in mutual funds. However, in order to invest, you need a lot of money. When it comes to investing money, it can be very risky.

What is a Low-Risk Business?

If you want to launch your own business, you will have to do a lot of research but the most important area that your research should cover is related to the low-risk business idea. What business niche do you think has a low risk? Or let’s say which business has the high success rate?

In my opinion, as well as research, the rental property business is a low-risk business.

Investing in property and then collecting rental income is one of the highly successful business ventures. It is also a passive income source because you will continue to generate income without working. Actually, more money has been made in real estate than in all industries combined.

The rental property business has a success rate of 85 percent based on US Bureau of Labor data.  There is a cash flow s you receive rents every month. You can even pay off your debt or mortgage from the rental income. Last but not least the value of your property will appreciate over the years.

Partnership business can be considered low risk. If you have a partnership business you might have a conflict of interest with the partners, however, there will low risk factor as your partner will share the loss. Sole ownership gives you full control but you might fall short of funds, you will also have to bear all risks.

High-Risk Results Equals Better Yield

Let’s look into these statistics.

About 20 percent of small businesses in the US fail in the first year.

About 50 percent of the businesses that manage to survive the first year will fail by the 5th year.

About 66 percent of small businesses will fail in 10 years.

These figures were burrowed from the US Bureau of Labor Statistics

It is very common for business failure and there is no business that is 100 percent secure. They even say the business with higher risk will give you higher returns. That’s the reason the stock market gives you a better return than any other investment. Saving in bank accounts is considered a very low-risk investment, however, the return on your investment is very low. Cryptocurrency and Forex trading are considered very risky, however, these markets are also believed to be one of the best markets for generating high profits.

Normally, a business that generates a 30 percent return on investment is considered a profitable business, however, a lot of businesses cannot reach that point.

If you are investing in a business that you do not have any idea about, this can be a high-risk investment. When you are investing, you need to have knowledge on how to manage your funds, other business works can be done by other people. For example, when you invest, you need to know how much of that money is going into product development, how much is going for office management, how much into the promotion and marketing, and how much into building the brand. 

4 Business Ideas With High Success Rates

Want to start a business but are afraid of failure, then look no further and start a business in one of the following niches. These businesses have a very high success rate.

Laundry Service: This type of business has a 95 percent success rate over the period of 5 years. This is also a recession-proof business because no matter what, people always want to clean their clothes.

Self Storage Facility: These are the warehouses where individuals and businesses can store their items. It has been reported that Self Storage Facility has a success rate of 92 percent.

Transportation Business: This is another business niche that has a very low failure rate. This business is booming with the emergence of eCommerce (because they need transportation to move their products). They have 76 percent success rates.

Vending machines: This business can be started for 3k to 5k USD. You can just buy vending machines and install these machines in the places where a large number of people visit. They have a success rate of 90 percent.

Selling on online marketplaces: You need money to build a business but you can start a business even with small funds. For example, you can start a dropshipping business for free if you use platforms like a Facebook marketplace on eBay. You can also start a print-on-demand business for free if you use a platform like Redbubble. You might have to spend some money on running ads in order to generate sales, but you can still make money with a small investment. Even when you start your own store, you don't need a lot of money to start a business.