3 BUSINESS IDEA YOU SHOULD AVIOD STARTING WITH A+F+G+N

 STARTING A BUSINESS IS DIFFICULT

Most people who ever dream of atarting and buliding successful companies quickly find their hopes and dreams crushed by the never-ending burden that comes with this commitment.

It takes much more than a grat idea to build a successful business.

It takes years of courage, years of learning and years of commitment to finally start seeing some traction.

Not only will you be working on a new business, but you will also be working on yourself and your mindset simultaneously

90% of people, maybe closer to 99% of people, never make it through the adversity.

Most people give up at the first sign of resistance. As soon as the going gets tough, they're wooed back into their comfort zones

The remaining bunch usually end up giving up some time down the line.

While all business ideas are different, there are some that can literally turn your life into a living hell.

Some businesses are nothing but energy, time, and cash-churning monsters that most entrepreneurs should avoid.

Luckily, the number of these businesses is limited.

Unless you've got a deep passion. I would suggest you stay away from these business ideas we're about to discuss in the article today.

At the end of the article, I'm going to hall suggestions at you, pointing you in a better direction.

Restaurant businesses

Restaurants seem like great businesses on the outside.

Making great food, serving tons of customers, and earning a living from it? Sign me up!

Many people who have a passion for cooking end up going down this path, however, only a select few ever make it out.

The restaurant industry is unforgiving and can kill more dreams than anything else before it.

Building a completely new restaurant business is much different from choosing to franchise an existing business.

It's also different from carrying on the family business - something some entrepreneurs fall into at some point.

Franchising is much safer much more reliable, and can prove to be much more fulfilling.

However, building a new restaurant business that no one has ever heard of is much harder than it looks

There are many problems with restaurant businesses.

Firstly, the startup costs are insane.

A Google search shows that starting a restaurant business can cost up to $425,000, if not more in various parts of the world.

Most entrepreneurs don't have $100 to spend on their business idea let alone almost half a million.

Even if the capital was available, there are many businesses with much more appealing risk to reward ratios.

Next, it can take years on years to finally break even and start achieving a profit with your restaurant business.

The low margins make it difficult to scale your business, and build it up into a massive, well-known brand

It's taken McDonald's almost 70 years to reach the scale it has today - even then, it's one of the only restaurant/fast-food chains that's managed to reach this level of scale.

The global profit margins for restaurants varies between 2% and 6%, which is much lower than some businesses we'll discuss later on.

These margins mean that for every dollar you make, you're only keeping 2-6 cents.

Finally, restaurants are physical experiences, places people visit to sit down and eat at.

This means that you'll find yourself paying rent, which can cost a lot, and bump up your overhead costs dramatically.

The fact that your business is not digital makes it difficult to scale to different locations in your city, let alone internationally.

ARBITRAGE BUSINESSES

A lot of people may have tried arbitrage without knowing exactly what it is.

Arbitrage, in Leyman's terms, is the process of buying and selling products for a small profit.

Assume that you have a local supermarket near your house.

The supermarket is selling products at a small, 10% discounted rate.

You decided to pick these items up for a discounted rate, and sell them for their original (or slightly higher) price online, effectively keeping the tiny change left over.

However, when we sell online there are 'hidden' fees we must be aware of.

Firstly, there are platforms fees that are taken when you make a sale on the marketplace of your choice.

Etsy, eBay, Amazon- all of these marketplaces take a 'referral fee.'

On top of this, payment processors also take their cut, which is around 2.9% + 30c for PayPal.

Chewing away at the already minuscule margins we had, we're leftover with, well not much.

Assume you pick up a product that costs $50 retail, but has been discounted 10%, leaving it at $45.

You can choose to sell this product for $55, netting you a $10 gross margin.

However, after the total fees (for eBay, they're currently 12.8% of the final sale price + 30c), we're left with $2.66 in profit.

The margin, however, is not the only problem.

Many people find it difficult to scale their arbitrage businesses into anything bigger.

When I worked at Amazon during 2020 I also sold products on the side following the arbitrage method.

While I managed to make a good living during this period of time, I found it unreliable - finding products on offer, or having a reliable supplier is difficult for arbitrage.

As soon as I lost my supplier, I lost one of my biggest source of income 

All plans of ever scaling the 'business' were shut down, and I was left in the same situation I was in not long ago.

Arbitrage is a constant grind, a hustle that you need to escape as soon as you can or your whole business will cease to exist.

The closest alternative to arbitrage business is eCommerce dropshipping and/or white labelling 

I suggest you have a read over my articles on starting an eCommerce dropshipping business to learn more.

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