"The 7 Most Overrated Businesses"

15 years ago

That is most inteersting. I agree I much prefer websites with no traffic. Yahoo Small Business your list is pure genius.

Steve

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marciayudkin

15 years ago

1. Restaurants
2. Direct Sales
3. Online Retail
4. High End Retail
5. Independent Consulting
6. Franchise Ownership
7. Traffic-Driven Websites

So, their advice to us is evidently don't sell online, don't teach people using your expertise, and don't build websites dependent on traffic.

They're not saying don't start a restaurant, don't join MLM, don't consult, etc. What they're saying is that people go into those businesses with highly unrealistic expectations. And I believe they're correct. The image of the business doesn't match the reality.

The image of the restaurant business is that it's glamorous and fun. Not!

The image of consulting is that it's easy to find clients and you can work as little or as much as you want to. Nope, it requires marketing.

The image of purchasing a franchise is that you put in your money to buy it and it just about runs itself. No, like the restaurant it's a lot of hard work with no guarantee of profits.

And so on.

Obviously there are successful restaurants, consultants, franchises, etc. - and online businesses. But the reality is different from what most people imagine, that's all. And I agree.

Marcia Yudkin

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nicholasb

15 years ago

a poor person wrote this article I dont take advice from people who don't earn at least 10 million dollars per year especially some broke ass writer, and the truth is that I make a lot of money in most of the things on that list,

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AndrewCavanagh

15 years ago

From what I've seen the most overrated business may be having your own medical practice.

You study for 7-8 years at great expense.

You work as an intern often for days and weeks with very little sleep...for years on end.

Then you get a job where again you're "apprenticed" for quite a few years.

And then you get the booby prize...buying your own 7 figure practice.

And that practice won't run without you working 60-80+ hours a week.

Sure there's money in it but just the uni fees would be more than enough to buy a substantial business and start making money while the average medical student is making zip and working his backside off.

I have the greatest respect for doctors and surgeons but it's a VERY difficult way to make money and when you compare it to other businesses it doesn't look so good.

It's interesting which professions we revere so much in our culture as being a great money source and which professions and businesses we look down on.

One of the better businesses I saw was a friend who ran the local dump.

He made a substantial six figure income and could easily get his staff to do all the work for him.

Kindest regards,
Andrew Cavanagh

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Julian Lockhart

15 years ago

There is quite a difference between not recommended/bad and overrated.

The Dallas Cowboys are overrated but they are still pretty good.

Mylie Ray Cyrus is overrated but she can sing better than most.

**** berry is overrated but does provide **health benefits.

It simply means to much credit is given to something.

From the article:
"There's this very sad pattern about how people start businesses," says Scott Shane, an entrepreneurship professor at Case Western Reserve University in Cleveland, Ohio. "People are most likely to start businesses in industries where start-ups are most likely to fail."

That certainly rings a bell for IM.

You also need to consider the audience. People who recently lost their jobs.

I like to tell people to risk it all and would say to most people "jump in and go for it."

But being responsible I wouldn't tell a family of four with two months of savings left to bet the farm on an ebay business.

**These statements have not been evaluated by the Food and Drug Administration.
This product is not intended to diagnose, treat, cure or prevent any disease.

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JohnMcCabe

15 years ago

Originally Posted by AndrewCavanagh

It's interesting which professions we revere so much in our culture as being a great money source and which professions and businesses we look down on.

One of the better businesses I saw was a friend who ran the local dump.

He made a substantial six figure income and could easily get his staff to do all the work for him.

Kindest regards,
Andrew Cavanagh

An interesting book, "The Millionaire Next Door," took a look at a number of people with a minimum of a million dollars in net worth. Many of them made their pile in businesses most people would turn their noses up at. Things like running a dump, cleaning services, subcontracting another business's drudge work, etc.

Another interesting characteristic was that most of the millionaires did not live the stereotypical 'millionaire lifestyle'. They drove large American cars (the study was from the USA), tended to live in nice homes (not mansions), and so on.

Originally Posted by Julian Lockhart

From the article:
"There's this very sad pattern about how people start businesses," says Scott Shane, an entrepreneurship professor at Case Western Reserve University in Cleveland, Ohio. "People are most likely to start businesses in industries where start-ups are most likely to fail."

That certainly rings a bell for IM.

I wonder if this is one of those chicken-and-egg questions.

Do people pick business models most likely to fail, or do people likely to fail pick those business models?

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adamv

15 years ago

Originally Posted by JohnMcCabe

I wonder if this is one of those chicken-and-egg questions.

Do people pick business models most likely to fail, or do people likely to fail pick those business models?

Excellent question. I imagine it's a little bit of both.

Honestly, I don't give a rat's patootie what Yahoo says about traffic driven websites or online retail being over rated.

I'm not making the huge money yet (I'm working on it) but I love waking up in the morning and seeing money in my accounts. I love going on vacation and seeing sales come in from work I did weeks or even months earlier. I don't think it's over rated one little bit.

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casestudykev

15 years ago

Originally Posted by adamv

Excellent question. I imagine it's a little bit of both.

Honestly, I don't give a rat's patootie what Yahoo says about traffic driven websites or online retail being over rated.

I'm not making the huge money yet (I'm working on it) but I love waking up in the morning and seeing money in my accounts. I love going on vacation and seeing sales come in from work I did weeks or even months earlier. I don't think it's over rated one little bit.

A common factor I've seen is multimillionaires have no idea what they are doing. I used to think they had wisdom or some form of knowledge that others lack. Now, from talking to many, they just work really hard, try many things, measure the results, and eventually stumble onto something that works. They learn a few lessons, but most couldn't start another successful business in a different industry.

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casestudykev

15 years ago

Originally Posted by JohnMcCabe

An interesting book, "The Millionaire Next Door," took a look at a number of people with a minimum of a million dollars in net worth. Many of them made their pile in businesses most people would turn their noses up at. Things like running a dump, cleaning services, subcontracting another business's drudge work, etc.

Another interesting characteristic was that most of the millionaires did not live the stereotypical 'millionaire lifestyle'. They drove large American cars (the study was from the USA), tended to live in nice homes (not mansions), and so on.

I wonder if this is one of those chicken-and-egg questions.

Do people pick business models most likely to fail, or do people likely to fail pick those business models?

If I recall correctly, after reading all 3 of the millionaire next door books, these books were misleading. They listed many frugal/long term habits, implying that was the key to becoming a millionaire. Finally, the author reveals that the vast majority of these people make over 300k per year.

I wonder how many would be millionaires if they made 70k?

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JohnMcCabe

15 years ago

Originally Posted by casestudykev

If I recall correctly, after reading all 3 of the millionaire next door books, these books were misleading. They listed many frugal/long term habits, implying that was the key to becoming a millionaire. Finally, the author reveals that the vast majority of these people make over 300k per year.

I wonder how many would be millionaires if they made 70k?

Although I read the second book, most of what I remember is of the first one. Maybe it's middle-age memory, but I don't recall the book as misleading.

Yes, many of the wealthy people profiled built their wealth over time. And, as I recall, only one started with a huge income, an inheritance.

Most of the media likes to point to glamorous stories about rock stars and entertainers, or the one in a zillion Internet company that sells for zillions. Stanley was making the counterpoint that many millionaires made their money the hard way - working hard in less than glamorous industries, building their companies and minding their money.

Those traits may not be the key to getting rich, but they don't hurt.

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MichaelHiles

15 years ago

Originally Posted by AndrewCavanagh

..

One of the better businesses I saw was a friend who ran the local dump.

He made a substantial six figure income and could easily get his staff to do all the work for him.

Kindest regards,
Andrew Cavanagh

I literally do not know of a single junk yard operator that isn't a multi-millionaire.

The high tech version is a little company called Computer Associates, who pays a fraction of value to entrepreneurs that have no exit strategy for aged software products with an installed customer base that pays recurring maintenance. They have no pride of being on the bleeding edge, and milk the base for every last maintenance dollar.

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casestudykev

15 years ago

Franchises are mostly scams, I know several owners, including some of the top people in different franchises. A very good success rate is 50%; success is making over 50k per year.

Generally its kind of like an mlm

Cooperate usually has the deal configured to swoop down and take the most profitable areas/clients.

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Kappa

15 years ago

People are most likely to do start ups in areas that have low barriers to entry. I'm sure you have to take some kind of oath to the devil, or worse, to create your own fashion line or something like that. I don't think just because many fail in these industries that makes them "overrated." Yes, owning your own sports team is a guaranteed success, but for most of us that above short list is what we have to pick from.

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bettersocial

15 years ago

I would donate my heart out if my favorite restaurant was to go under tomorrow.

I doubt few businesses can inspire the kind of loyalty that a good restaurant can. So no, I would never put a restaurant on that list.

But yes, image that the businesses above paint are far from reality. Online sales is supposed to be a quick money job, while in reality, it requires tons of WORK!

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TelegramSam

15 years ago

The most overrated business could be any where the person doesn't give his customers what they want, in sufficient profitable volume to allow him to make a good living.

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Talinn

15 years ago

I agree that websites which are "traffic driven" are overrated. I make a lot of money from my Blogger blog I made for my dog - it gets visited by my mother and my brother. I am constantly cashing $100K+ per year with this website. I call this the "love driven" type of site. Next big thing.

"Traffic driven" websites are soooooo 2006.

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"The 7 Most Overrated Businesses"

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