Steve Chou Shares 4 Low Risk Businesses With High Success Rates (You Can Start In 2024)
Running a business isn’t as easy as it seems on paper. As a matter of fact, it can be downright terrifying when you consider how many businesses ultimately fail. We read the statistics about how most businesses don’t make it past the first few years.
According to the U.S. Bureau of Labor Statistics, a whopping 20% of small businesses fail in their first year. By year five, that number skyrockets to 50%. And after a decade, a staggering two-thirds of businesses have gone under. Those numbers can be pretty discouraging if you’re an aspiring entrepreneur.
But then, there are certain types of businesses with incredibly low failure rates. Businesses where your chances of succeeding are through the roof?
I believe the government’s definition of “business failure” is a bit outdated, especially for today’s online businesses. Their statistics mainly cover traditional brick-and-mortar companies that have simply run out of cash.
For online businesses and other modern ventures, the cost of starting and maintaining the business is often incredibly low. Some literally can’t fail because there’s almost no overhead. As long as you stick with it and don’t give up, success is virtually guaranteed with time.
I’ve compiled a list of four businesses with some of the lowest real failure rates out there. These aren’t your typical suggestions either – no laundromats or car washes here (although those can be solid businesses too). I’m talking about ventures that are easy to start, have super low overhead, and give you a real shot at creating sustainable income.
Let’s dive in, starting with the lowest startup costs and working our way up.
1. Starting an Online Store
Thanks to modern technology, launching an ecommerce business can cost almost next to nothing these days.
When I started my online store at BumblebeeLinens.com over a decade ago, my total startup investment was just $630. I used a free open-source shopping cart, paid $7 per month for cheap web hosting, and $30 per month for credit card processing. My entire monthly overhead was $37!
At that low monthly rate, there was zero chance my business would ever truly “fail” and go under. If money got super tight one month, I could simply skip a meal out and boom – the business could keep trucking.
Today, you can start an online store for as little as $3 per month. My kids launched their store Kidsincharge.com for just $2.95 per month. The barriers to entry are almost nonexistent.
Even better, you don’t need any upfront inventory costs if you use dropshipping suppliers that store and ship products for you. Or go with a print-on-demand model selling custom t-shirts, mugs, and a lot more.
The potential upside, however, is absolutely massive. I have students who started their ecommerce stores with just a few dollars and now generate over $1 million per year in sales. It’s amazing what’s possible when your overhead is so low.
Of course, there’s always the possibility you never actually launch products or put in the work to succeed. But with ecommerce, the risk of total financial ruin is incredibly low. As long as you take action, this business can’t realistically “fail” unless you deliberately shut it down.
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2. Content Creation & Blogging
Having started my blog MyWifeQuitHerJob.com back in 2009 (which now makes over $1.6 million per year), I can tell you from experience that content creation is another awesome low-risk business.
To launch my blog, I spent less than $10 signing up for cheap hosting with HostGator and installing WordPress with a free theme. My total monthly expense starting out was $4.95! You simply can’t go broke spending $5 per month on a business.
The basic strategy is straightforward: write blog posts targeting keywords people are searching for on Google, build up an audience through SEO, and monetize that traffic through email marketing, affiliate marketing, advertising, and digital product sales.
While a blog won’t make you rich overnight, it’s like a compounding money machine that grows more valuable over time. The more content you publish, the more traffic and revenue you’ll generate down the road. It truly can’t “fail” unless you voluntarily shut it down.
Now to be clear, it took me about two years before I started making any money with my blog. I didn’t hit six figures until year three. But stick with it, and the traffic and income become exponential. Just be patient those first couple years!
At the end of the day, blogging costs virtually nothing and has incredible money making potential. And with a $5 per month startup cost, how could you possibly “fail”?
3. Starting a YouTube Channel
Speaking of content creation businesses, YouTube is another phenomenal low-cost venture with unlimited upside. Like blogging, it’s completely free to start a channel as long as you have a smartphone to record videos.
These days my YouTube channel generates multiple six figures per year from advertising revenue alone, not to mention money from affiliate marketing, digital products, and more. All for the low startup cost of…absolutely nothing!
Similarly to blogging, a YouTube business takes patience and hard work upfront. My channel didn’t make a dime for the first year, then started generating a few thousand per month in year two. I didn’t hit six figures until year three when viewers and watch time started compounding.
But here’s the beautiful thing about YouTube: your channel is like a money printing asset that compounds over time. The more videos you create, the more your channel will be suggested in search results and bring in new viewers and ad revenue on autopilot.
Your channel literally cannot “fail” and go broke unless you simply give up and stop uploading videos. As long as you stick with it, your income will continue growing alongside your viewer base.
And don’t underestimate how powerful YouTube can be for promoting your other businesses and products too. My buddy Eric started a beard grooming ecommerce company, and he attributes over 50% of his sales directly to his YouTube channel.
4. Investing in Rental Properties
While the previous three business ideas focused on ultra low startup costs, rental properties are my pick for a “bigger” business with an astoundingly high success rate.
According to studies, rental properties and real estate investing have an 85.3% success rate, which is just incredible. That’s because rental income is a fairly simple business model once you understand the fundamentals.
As an landlord, you establish a monthly cash flow from your tenants’ rent payments. Meanwhile, your expenses like mortgage, taxes, insurance etc. are mostly fixed costs. The difference between your rental income and fixed costs is your profit margin.
The beautiful part is that your rental property is also (typically) rapidly appreciating in value over time. That gives you built-in equity as your tenant’s rental payments simultaneously pay down your mortgage debt. It’s like getting paid twice!
Even better, there are numerous tax advantages to owning rental properties such as 1031 exchanges, deductions for depreciation and mortgage interest. These tax incentives essentially subsidize your investment.
Of course, like any business there’s always work involved like finding and managing tenants. But thanks to property managers, you can hire experts to take care of the day-to-day for around 10% of your rental income. Not bad for a semi-passive income stream!
Rental properties do have higher startup costs than the other businesses mentioned. You’ll need equity from savings, a loan, or leverage to purchase your first investment property. It’s not something you can do for $5 per month.
But the low failure rate compared to the potential upside makes rental properties an incredibly savvy long-term investment. I have friends and students making over six figures per year through their real estate portfolios. Just be sure to educate yourself on cash flow, leverage, tenant screening and so on.
Key Takeaways
Compared to the failure rates often quoted for traditional small businesses, these four options absolutely deminishes the odds of going under. We’re talking success rates in the 80-90% range!
And in the case of the first three very low-cost businesses (ecommerce, blogging, YouTube), you literally can’t “fail” in the sense of losing your shirt and going bankrupt. As long as you stick with it, your income will grow alongside your audience and traffic over time.
So if you’re looking for a smart business bet with limited downside, I’d highly recommend investigating one of these four ventures based on your skills and interests. Mitigate your risk while still capturing unlimited income potential. What could be better?!
To recap, here are your best options for businesses with amazingly high success rates:
- Start an ecommerce store with basically no upfront costs or overhead. Ride ecommerce’s scalability to millions if you stick with it.
- Launch a blog or YouTube channel for pocket change and have an appreciating traffic asset that makes you money 24/7.
- Buy rental real estate and generate cash flow plus equity growth that you can leverage into a sizable passive income portfolio.
The bottom line? Don’t be discouraged by those oft-quoted statistics about failure rates for small businesses. The game has changed, and there are now dozens of low-risk business models with astronomical upsides if you play your cards right.
Still Have Some Questions?
How much money do I really need to get started?
The beauty of online businesses like ecommerce stores, blogs, and YouTube channels is that you can launch for less than $10 per month. Physical product businesses through dropshipping or print-on-demand can even be started with just a few hundred dollars. Rental real estate does require more startup capital, but incredible leverage and tax advantages help offset those higher costs.
Can I run these businesses from home?
Absolutely! One of the biggest benefits of these low-risk businesses is you can operate them from anywhere with just a laptop and internet connection. Blog, record YouTube videos, manage your online store – it can all be done remotely. And rental properties can easily be outsourced to property managers once you’ve got properties under your belt.
How much time does it take to be successful?
Rome wasn’t built in a day, and the same is true for these businesses. Low overhead reduces your risk of cash flow crunches, but you’ll still need patience. Give yourself 1-3 years of consistent effort to build an audience and sales funnel. The good news is that time investment pays exponential dividends down the road.
What if I’m not an “expert” in any field?
You don’t need existing expertise to get started with most of these businesses, especially ecommerce, blogging, and YouTube. Start by picking a passionate niche and document your learning process – audiences love that! Then become an expert over time through research and hands-on experience.
Do I need a bunch of employees and offices?
No! These are meant to be lean, low-overhead solo businesses you can run yourself initially. That’s the key to minimizing costs and risk. Only add employees, offices, etc. once you’re already profitable and sustainable. Things like dropshipping, digital marketing, and property managers can keep staffing needs low.
What’s the highest income potential of these businesses?
While they start small, the income ceilings are honestly uncapped. I have students making over $1 million per year through ecommerce stores, blogs generating $100K+ per month, and YouTubers earning millions through their content businesses. And rental property investors can build multi-million dollar portfolios over time.
How can I pick the best business idea for me?
It comes down to your interests, skillset, and capital situation. Do you love creating content and communicating? Start a blog or YouTube channel. Interested in physical products and brand building? Try ecommerce. Better with balancing risk and sweat equity? Buy rental properties. Then go all-in on mastering your chosen business!
