Not all business ideas are built to last. In this video, we reveal 7 types of businesses with shockingly high failure rates, all backed by the latest data. If you're thinking of starting a business in the US, UK, Canada, Australia, or Germany, this video will help you avoid costly mistakes.
📉 From trendy startups to old-school businesses that no longer work, discover what not to start in 2025. Whether you're a new entrepreneur or a seasoned investor, this data-driven guide will help you make smarter decisions.
Covered in This Video:
Failure rates by industry
Common reasons these businesses collapse
Red flags to watch for before investing
Safer alternatives you might consider
Watch till the end for expert tips on how to choose a sustainable business model
#businesses that fail,
#failed business ideas,
#business failure rates 2025,
#startups to avoid, risky businesses,
#high failure rate industries,
#data driven business advice,
#entrepreneurship tips,
#small business mistakes,
#tier 1 business strategy,
#US market business tips,
#business stats 2025,
#financial mistakes entrepreneurs make
Must Watch
Share | Like | Follow
📉 From trendy startups to old-school businesses that no longer work, discover what not to start in 2025. Whether you're a new entrepreneur or a seasoned investor, this data-driven guide will help you make smarter decisions.
Covered in This Video:
Failure rates by industry
Common reasons these businesses collapse
Red flags to watch for before investing
Safer alternatives you might consider
Watch till the end for expert tips on how to choose a sustainable business model
#businesses that fail,
#failed business ideas,
#business failure rates 2025,
#startups to avoid, risky businesses,
#high failure rate industries,
#data driven business advice,
#entrepreneurship tips,
#small business mistakes,
#tier 1 business strategy,
#US market business tips,
#business stats 2025,
#financial mistakes entrepreneurs make
Must Watch
Share | Like | Follow
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LearningTranscript
00:0066% of entrepreneurs will never start a business because they're too scared of
00:04failing how do you give yourself the highest likelihood of succeeding in a
00:07business you follow the data in this video we're gonna break down for you the
00:10businesses with the highest failure rate and the lowest failure rate so you can
00:14pick one where you can win gyms not one of my favorite businesses you want to
00:18know why 80% of them fail within the first year 81% to be precise now the
00:24cool part about gyms is you typically don't need all of this you don't need a
00:27giant building you don't need a huge location that's prime you could have a
00:32little CrossFit gym with a box and start it with a couple hundred K and some
00:36friends which is what a lot of people do here's the problem with gym businesses
00:40typically the owners start a gym business as a hobby right they like to work out
00:44so they want to put their name on the building and that's what they do which
00:48means that they neglect the finances they don't have a marketing plan they do
00:51things custom they don't have standard pricing they don't have third-party
00:56products that they take a cut on and sell and they don't do high margin which is
01:01things like subscriptions and also personalized training at a really
01:04expensive level one of the secrets to wealth in general is if you want to get
01:07rich sell things to rich people because they pay more gyms are really hard
01:12business to do that now there are models that work gold's been around forever
01:15it's a franchise and there's basically two ways you can do a gym you can have a
01:19gold's gym and you can have a planet fitness where they kind of expect you to
01:22subscribe and then really never come or you can have an equinox where they
01:28expect you to come but you're gonna pay for it that's the difference between
01:30like 10 bucks a month and 200 or 300 bucks a month regardless I think just go
01:36get swole when you go to the gym and if you want to make your bank account swole
01:39pick another business ATMs I get pitched this business all the time because it
01:44seems easy and like it might not take that much money to start let me tell you why I
01:48don't like this business because of the math average three to five transactions
01:52a day of eighty to a hundred dollars the average transaction size you get one to
01:57two percent of it which means you make about two dollars and forty cents to fifteen
02:01dollars a day per machine you got to drive around and pick up the cash and all
02:06of these on at least a couple day basis otherwise they get stolen this one
02:10actually isn't located here anymore I best you could guess why if you pan around
02:13this area so the money just doesn't add up the other problem is for a machine the
02:18machines themselves are pretty expensive they cost seven years on average from
02:22you giving them the money for the machine to you paying it all back with
02:26the revenue and profits of the business the other reason is let's think about it
02:30this way anybody got cash on them in this group I know the answer to that and
02:34that's no except maybe Samuel but most people these days are not carrying cash
02:38around so we're having a declining user base with really tiny margins and a lot of
02:43logistics tough business the second way that people make money on ATMs is they
02:47charge a surcharge right so you take a percentage of the transaction costs one
02:51to two to five percent and then you might add a surcharge which is like two
02:54to five dollars per transaction so that is where you could make your media
02:58transaction but again if you're only doing three to five transactions today at
03:02a normal location that's not gonna be enough now how could this business work if
03:06you're outside of a cannabis store where they will only take cash this could
03:10work if you're outside of a bar where they require a ton of cash this
03:13business could work but then you're gonna have to pay more for rent on that
03:16location also here's the thing at the end of the day I think you need 50 to 100
03:20ATMs to make enough profit for it to be worthwhile as a full-time gig if you
03:25want to have a little side hustle you want to learn the game of business you
03:27want to learn your P&L you want to start small somebody else can fund you where
03:30you can lease the ATMs then we're good to go why I would never buy a dry
03:33cleaning business or why Cody Sanchez hates dry cleaners let me tell you two
03:37reasons the first one is look at this graph we basically seen the number of
03:41establishments plunge meaning people are using them a lot less probably has to do with the
03:45the fact that suits are going out more people are working from remote and less
03:49things that need to be dry cleaned are part of our everyday life the second
03:52reason is one word and it's called remediation so if you go on the internet
03:57right now you'll see it like hundreds of dry cleaners selling for a hundred to
04:00two hundred thousand dollars and you can often sell or finance them so why
04:03wouldn't I like those it's because I was looking up the math for you guys if you
04:07use a dry cleaner the old way there can be a lot of toxicity right here
04:12underneath our feet that needs to be cleaned up by whoever owns the
04:15business it's called remediation how much does that cost is fascinating the
04:20EPA right now thinks that 75% of the dry cleaners in the US are contaminated the
04:26soil underneath them is and that they have 650 gallons of hazardous waste that
04:31they need to clean up but how much does the hazardous waste clean up cost anywhere
04:35from it could be five to hundreds of thousands of dollars depending on how deep it
04:40is and in what state city etc I don't want to buy a business it's only making
04:44a hundred or two hundred thousand dollars or run one that's only making
04:47that much and then I got to pay for somebody to come clean up all this
04:50toxicity plus aren't we all green these days this is not where we're going so
04:54anyway thank you to dry cleaners that exist but also be careful about what's
04:57underneath your feet hotels these are not businesses this is real estate
05:00masquerading that as a business let me tell you why the data says these
05:03businesses are really tough look at these margin numbers so on average you make
05:07ninety four thousand dollars a year but the average expense for a hotel is ninety
05:11six thousand dollars a year so they're losing two percent why is that okay because
05:16they use the real estate depreciation kind of a fancy word to say that they use
05:20the ability to decrease their taxes in order for these things to become
05:24actually profitable so they're not even profitable unless you're messing around
05:27with the IRS also I don't know about you but I don't want to have a
05:30business where somebody can call me at two in the morning and yell at me and
05:33expect service right away 24 7 support is what you have when you have a hotel
05:38business there's enough going wrong in business for you to wake up at 8 have a
05:42cup of coffee and then deal with it I think that's sufficient the other thing
05:45is this is a complex business because you see we're at one right now and if you
05:49were to look around you basically see a bunch of people behind me are doing
05:51landscaping right a bunch of people behind me are redoing the bar over here
05:56it's complex it requires 24 7 support and a ton of humans to run this business not
06:01to mention look at what's happening to this industry so back in the day there
06:06were 20 major hotel companies in the 2000s now there are only 10 so we've
06:11consolidated the industry and those 10 own 65% of the market so if you want to
06:15get into hotels and be independent like this lady is she's a legend into hotels by
06:20the way it's really hard and so you have to end up going franchising most 67% of
06:25all hotels are franchised hotels here's the problem with that they take a ton of
06:30your revenue and they leave you with something like two to seven percent total
06:33revenue at the end for you to run the business since these contracts run 10 to
06:3715 years on average you better make sure that that franchise is one you want to
06:40stick with for a while this hotel is amazing the grounds are beautiful but the
06:45problem with a hotel like this is can you imagine what it costs to run this
06:48thing non-stop sorry I think we've been kicked out of like what 17 businesses
06:58now Amazon FBA the other type of business that is my least favorite of all of them
07:02let me tell you why although I have a bunch of friends that made money and you
07:05have all these young youtubers all over the internet telling you how much money
07:07you can make doing fulfilled by Amazon and how easy it is and how seamless it is
07:11the truth of the matter is the math doesn't math one because if there is one
07:16platform that has more risk to one being your biggest competitor which Amazon
07:21does to allowing a bunch of Chinese knockoffs to come compete with you and
07:25three actually giving your data to both your competitors and then taking your
07:30data about what sells and using it for their own it's Amazon huge platform risk
07:34the second reason why I don't like fulfilled my Amazon businesses is you
07:38actually can't touch your customers how wild is that you buy from my store on
07:44Amazon and I send to your house my product pens let's say I cannot get your
07:49contact information or your address and oh by the way I'm not even allowed to put
07:53something in the packaging that asks for you to write a review or that asks for
07:57you to get more information you're completely divorced from your customers
08:02which is one of the most dangerous things that you can do in business
08:04overall let's get into the math really quickly we can actually see how many
08:07Amazon sellers make money or not fast forward through what all these numbers
08:12mean only one percent of sellers succeed with an annual salary of around a
08:16hundred thousand to two hundred fifty thousand while 27 percent achieve about
08:21five thousand dollars in total sales here's all the numbers for you now a lot
08:25of people can be break even inside of a year because they don't have all the
08:28crazy upfront costs you get with a business but your ability to make six
08:32figure income tough so I suppose you could have some fun you could
08:35experiment with all the 27 year olds on YouTube talking about fulfilled by
08:39Amazon but the likelihood that it's going to make you hundreds of thousands of
08:42dollars is really quite slim furthermore I'm really concerned about the fact
08:47that you put in all this time and effort and work and then one thing changes on
08:51the algorithm and you're no longer listed at the top oh and not to mention the
08:55last time that I was looking at one of our businesses that had a percentage of
08:58their revenue from Amazon they started getting competitors who actually gave fake
09:02reviews and bought their product in order to tank their rankings because if you
09:07have one negative review on average you need 10 to 20 positive reviews to offset
09:11it that business eviscerated so be very careful we like Jeff Bezos great for the
09:18world 24-hour delivery incredible for our bottom line probably not retail
09:23source for the next one I wouldn't buy incredibly high failure rates look at
09:27this the other reason is if you think about it these are really high rent
09:30locations meaning that it's expensive to just even have your feet on the
09:34ground here second is the user base is declining what do you mean well more and
09:39more we shop online Amazon and at ecommerce as opposed to in person so that the
09:44graph goes like this which is usually not a great tell in a business that
09:47you're starting the other reason is they have something called negative float
09:51which sounds like kind of maybe technical but negative float all that means is
09:55that you pay money upfront for clothes maybe a season or two ahead and you only get
10:01money when somebody buys it eventually after waiting for it to be shipped to
10:05you and then a hoping that you sell to somebody else it's also really hard to
10:09determine what inventory should look like that's why retail freaks me out I call
10:14this a cash suck business not a cash flow business and while I'm really happy to
10:19window shop I think if you just need that little retail store to sell live laugh
10:24love t-shirts maybe do it as a loss leader that is a business that you have a ton of
10:29money and you don't want to make any more and as the saying goes with vineyards the
10:32same goes with retail which is if you want to make a million dollars with a
10:36retail store start with 3 million this statistic is wild as of April 2023 there
10:42were eight big retailers that went completely bankrupt Bed Bath & Beyond
10:45included in 2022 there were 10 retailers in the entire year this is not a good
10:50trajectory the other one that freaks me out is the percentage rate of
10:53businesses that still operate after the first four years in business in the
10:57retail industry is less than 47% after the first year's 90% failure rate no
11:06mathematician but that don't look good restaurants really tough business to win
11:10in actually one of my least favorite ones as evidenced by one failed right
11:13behind us right now look at all of this real estate that is now empty and how
11:17expensive it had to be to get started the average small business in the US sells
11:21for somewhere around $800,000 but the average restaurant sells for 198,000 why
11:27because they're really hard to win at over the long term in fact I was looking
11:31up some stats for you guys 60% fail in year one 80% in four years huge
11:36competition in fact scroll down this street to see what they're working with
11:40we've got Juiceland we've got Chipotle we've got something at the end we've got a
11:44hop dotty over here and we've got three more restaurants right next to them so why do
11:49restaurants fail lots of reasons one is they run out of cash because they don't
11:52have enough money up front the average build of a restaurants anywhere from
11:55$200,000 to a million dollars to build out that's a lot of Kwan second is they
12:00have to have a lot of money to keep running both for wages for employees but
12:04more than anything for the food that they need to sell you plus there's this
12:08little word called spoilage which is awful which basically means that that food
12:12can't last forever like a t-shirt can and so you got to pay for it over time one of
12:16the other big things that nobody thinks about with restaurants is it's really
12:20hard to keep a consumer with you over time and often they don't give you their
12:24contact information they just wipe a credit card so as opposed to an online
12:28business where you can email them tell them to come back a restaurant you can't
12:31really do anything unless you're really smart about getting referrals if you have
12:35to start a restaurant then you might want to start one like this they have
12:38lower failure rates as fast food joints this one here is called full service
12:43restaurant a lot more expensive to run much higher failure rate that is a
12:46lower failure rate also I do own some restaurants or at least parts of them it
12:51doesn't mean you can't make money in these things it's just what's the highest
12:54likelihood to fail and how good of an operator do you have to be I own part of
12:58a restaurant called the well it's awesome but they've also got these pop-up
13:01stores and these things are the real part that makes money trucking
13:04transportation this is called last mile delivery and this area is booming in
13:09fact the success rate is about seventy six point four percent to do this now
13:13obviously you're not gonna start your own FedEx or stand in the middle of the
13:16street because that's annoying and now we're gonna get on influencers in the
13:19wild but what you can do is there's a bunch of trucking companies where you can
13:23own routes like this for UPS trucks for instance and you can also do last mile
13:29delivery for local stores this business is booming why because you animals won't
13:33stop hoarding things on Amazon me either in fact here's the last mile truck right
13:38here see guys there's another one that's a prime last mile delivery truck
13:43which also you can do the same thing for the statistics are ridiculous look at
13:46this 53% of total shipping costs are related to the last mile one mile of
13:51your shipping is most of the costs 90% of consumers see two to three day
13:55delivery as an expectation because you know we see no magic in the world anymore
14:00it's an eighty four point seven two billion dollar projected value of just the
14:05last mile delivery market in-house delivery fleets are the most common type
14:10of last mile delivery 42% of all companies require some help from a last
14:15mile fleet delivery so that means as opposed to those other businesses we
14:19showed you your demand curve is gonna go like this now there are a lot of tough
14:23parts about shipping and logistics and transport businesses such as expensive
14:27trucks so you want to be careful on leasing such as the ability for you to
14:30have drivers that are good although I saw Waymo go by so in the future maybe
14:35they're autonomous so let's say you like me could never drive this thing and
14:38maybe this is too expensive for you to get well you can actually do a courier
14:42business too which is basically like a version of side hustling and ubers but
14:46sometimes they're certified and so you can make more money doing them there's
14:49levels to the game that usually correlate with the size of the truck I think
14:52this business for a good operator even though there's probably not huge
14:55margins could be a really interesting business and data seems to agree with me
14:59senior care centers this one actually surprised me I didn't realize how low a
15:03failure rate these businesses have but I guess it makes sense for a couple
15:06different reasons first of all you've got government subsidies and state
15:10subsidies so the government knows they need to take care of senior citizens so
15:14they provide an easier way for people do that that's point one the second
15:18point that's interesting is if you look at the demographics of the US today
15:20what's happening we're having this massive balloon of baby boomers who need
15:24somewhere to go and increasingly grandma doesn't live with us they live in a
15:29center like this we also are seeing this massive increase of Alzheimer's dementia
15:33or advanced care needs in these facilities which actually increases how
15:37much money you can charge by three to five X although it's pretty sad the other
15:42thing that's interesting so I was looking at this and like this facility
15:45millions of dollars to build like how could you do this if you were a beginner
15:49and then I realized oh there are all these small little houses where if you zone it
15:54right you get the proper certifications and licensing depending on the state and
15:58the city that you're in you can have a senior care center that just has one or
16:01two individuals that take care of a few people that share a house that's super
16:06interesting in fact I lived by one in San Diego and the last thing is let me
16:10tell you why I'd never do this business could you imagine being the person that
16:13has to kick somebody out of a senior care center just because they don't have
16:17money but they're old and they're alone and what are you gonna do that's why I
16:21wouldn't do this business even though apparently it's kind of hard to fail if
16:24people need a place to live no matter what also cool stat 9.18 billion is the
16:29size of this industry in 2022 and it's growing at like six to seven percent
16:34which is wild so if you have a heart of stone and you like to take care of
16:38grandma this might be the business for you real estate rental properties in
16:42particular Andrew Carnegie famously said 90% of all millionaires got there
16:46through some form of real estate now 90% of all billionaires did it but if
16:50you're going for your first million rental properties are a great way to
16:53incrementally do it also using a bunch of tax advantages here let me give you a
16:57few reasons why and some of the stats on this business one the success rate on
17:00real estate it's crazy high 85.3% on rental properties that means that they
17:05don't go defunct or bankrupt as often 44 million Americans are home renters so
17:11there's a huge captured market and actually that market is increasing today the
17:15other thing that's fascinating is they spent 485 billion dollars a year on rent
17:20oftentimes it's more expensive to rent than to own on a monthly basis so you get
17:24to benefit from that you want to break down how much you're gonna make on
17:27average based on what other people make so landlords on average make about ninety
17:32seven thousand dollars a year if mom and pop and landlords own multiple
17:37properties over time you could stack a couple hundred K what's interesting is
17:41mom and pops me and you own something like 20.5 million rental units in the US
17:46which means that there's a lot of opportunity there's a proven model
17:49there's a specific base case for this now this has been documented all over the
17:52internet so I won't go over it ad nauseam but if you're gonna play the rental
17:56property game do you actually understand enough to put the guarantee and the cash
18:00down that you might need on a property because they come after you if you can't
18:04pay it off but I like real estate high success business laundromats this one's a
18:09fascinating business 92% success rate I think it's probably really somewhere
18:14between 87% and 95% and it's because these things often are cheap to start
18:20hundred to three hundred thousand dollars they last for a long time the machines
18:24last for anywhere from let's call it five to twenty years on average they have
18:29repeat customers who come week after week after week and since the number of
18:34locations is in a decline you're actually not seeing a ton of competition
18:38spring up the interesting part about laundromats also are you can add
18:42additional revenue streams so you can have a vending machine on site you can
18:45have an ATM company and if you want to take a laundromat that on average probably
18:49taps out at mid six fingers and revenue you add delivery delivery and what's
18:55called wash and fold if you see inside we'll try to sneak in there the ladies fold
18:59the clothes like this they put it in bags and they send out to the neighborhood
19:03that one bag cost you something like 30 to 50 dollars and it cost them dollars to
19:10wash and fold and so there's actually big margin if you can understand the
19:14logistics of that business also if you want to be a total stud and how to do it
19:18you can use a company like sense which is a technology company I own part of this
19:23company by the way that allows you to make everything to do with laundry mats a
19:27lot easier owning laundromats isn't all sunshine and rainbows I've owned these
19:31before so what you really need to think about is who your customer is because
19:35sometimes you got meth addicts outside you also have to think about how many
19:39people are you gonna have on staff you don't make that much money in it then if
19:42you want to have a bunch of employees so it's really nice if you can add a
19:45bunch of technology that allows you to monitor the building to collect cash to
19:50dispense soap without any humans around this is something that most new owners
19:54come in and do and a laundromat like this definitely has that and the last
19:58thing is these laundromat machines are like buying a Honda Civic they're like
20:02ten to thirty thousand dollars each so this part ain't cheap but it's a 92%
20:07success rate so they last for a while now you get to pick businesses with a high
20:11likelihood to fail or ones with a high likelihood to succeed but it's more than
20:15you just picking winners and losers we're here on Main Street and like the
20:20sign says I love a street like this in Austin Texas full of small businesses that
20:25decide to give their lives serving us with something you get to walk into an
20:29ice cream shop where people are up at five in the morning to make you and your
20:32family a little something and there's magic in that that happens in everyday
20:37communities by humans just like you who decide to do the hard thing which is to
20:42actually build instead of just consume so at this channel we are about making
20:45Main Street millionaires you should subscribe if you want to be one but you
20:49should also subscribe if you want to see a Main Street like this
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