Most businesses fail. The question is, how can you have a business that doesn't fail? We found 6 businesses with the lowest failure rate associated with them. Them. This is all backed by data because I think it's valid to be worried about having a business that fails. I mean, according to the US Bureau of Labor step to sticks. Which sounds really fancy and official. 20% of US small businesses fail within the 1st year. Then that jumps up to like 50 percent by the year 5.

And after 10 years, 2 thirds of all businesses have gone under. That's not good odds. Not great odds at all. So, if we actually look at the data to figure out which ones have the highest likelihood to succeed, then you can determine if you wanna jump into those pools. I always talk about the most important decision you make is the first deal you do or the first business you start. Because if the first one fails, your likelihood of taking the risk again is incredibly diminished. This is called your recency bias. So if your recency bias is winning, that's why we want small wins, then you are more likely to go win again or take more risk.

If your recency bias is losing or things that feel bad you're less likely to continue to take risk. So let's get the data and see which businesses have the lowest this is going to bankrupt me potential. I got 6 right here. Alright. Number 1, probably won't surprise my contrarian friends, laundromats. Mats. Oh, laundromats. An amazingly low failure rate.

According to Laundrelux, laundromats have about a 94.8% success rate over a 5 year period. I also confirmed these numbers because Laundrelux is a member of the laundromat community. So maybe they're a little biased. And the chamber of commerce did a study in partnership with Speed Queen where they show that they have about a 93% success rate. So somewhere in the nineties, let's call it. Again, nothing's guaranteed in business, but that's one of the reasons I talk about these laundromats like my gateway drug to business buying. They have a low failure rate. They're simple to understand, quarters, machines, a little bit of a dryer, a little bit of a washer.

They typically don't take 1,000,000 to start or buy, and it also turns out people need to wash their clothes even during recessions, so you have downside protection. Lastly, there's a passive component. If you do, laundromats as an absentee business, you can run it remote or with very few employees or contractors. Your employees end up being your machines. So we've got a whole video on the nitty gritty of laundromats for you, how we run them, how I started my 1st laundromat, that I bought for a $100,000 and made $67,000 on, and even how to make a laundromat be worth $3,000,000. That's number 1, laundromats. Number 2, rental property businesses. You know, I think it was Andrew Carnegie that said, 90% of all millionaires become so through owning real estate.

More money has been made in real estate than almost all industrial investments combined. So maybe it makes sense that they have an 85.3% success rate. Why is why is real estate interesting and why does it have a low failure rate? Well, one is because again it's a simple business with hard assets. So, you know, you have your house, the market is really efficient. So typically your house is worth what the market says that it is. There's not a lot of room for variance there or change. You typically have monthly cash flow in the form of rental income. It's pretty easy to model because you know upfront, I have to pay x in mortgage and I have to pay y, from my renter, and here's the delta or the difference between the 2.

Also interesting parts about real estate are obviously things like appreciation baked in. 4% a year on average or my favorite word, leverage. This is the form of mortgages. Right? So you have the ability to use somebody else's money in order to buy, real estate, and then that also allows you to have tax benefits like 1031 exchanges where you sell to defer capital gains, depreciation, and amortization, which basically are a different way for you to take write offs on your taxes overall. There's also great tax benefits to being a real estate investor only. And then there's the passive component and that you could just hire a property manager. There's no such thing as free money, with no work, but real estate prices are interesting if you're in the right cycle of the market. Now right now, I think real estate's price pretty high, but falling fast.

I'm in California today, real estate prices are down like 20 to 30% here. And you need to think about can I qualify for a loan? Can I cover the mortgage? But this success rate is probably there for all the reasons that we talked about. You know, even if you're making a small percentage monthly, it's like the average rental property nets about $462 a month. So it's not gonna make you a billionaire, but you probably can understand how to grow the business, how not to grow the business, and what a good deal looks like with a little bit of work. Yeah. Yeah. Better. Alright.