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Five Most Overrated Businesses to Invest In

New businesses are created everyday, some of these companies succeed, and many fail after the first year. Many of these businesses that fail, are often overrated.

What are the five most overrated businesses?

1. Restaurants

Dining out and cooking are a favorite pastime for most of us, but restaurants are the most likely businesses that fail. This paradox is often linked to competition, pricing and experience.

Most successful Restaurant Owners admit that success is linked on experience, and the location. But one secret they never tell you is simply- a willingness to work long hours, and adjust to the demands of their clientele.

Food does sell, but many Restaurants create less income than a successful roadside food stall. Which is a cheaper, and much easier option for anyone wanting to enter the catering business.

2. On-line Retail

On-line retailing has become the favorite business for many people to run. The set up costs are low, and it can be promoted in your spare time. But the downside is most online retailers fail, simply because of too much competition.

Pricing often may be lower than traditional stores, but delivery costs often offset the savings made by shopping online. The main drawback of online retailing is time, you need time to promote, and often funds to pay online advertisers.

3. Independent Consulting

Many professionals often think about turning their expertise into a business, by offering consulting services. A great idea, when the World is going online, and expert advice is always needed.

However, the main drawback many professional Consultants agree on is the constant need to find new work. Projects are time-based, and once one project ends there is often a waiting period that could weeks or months.

Consultants often spend more time searching for work, than actually working. Perhaps the key to being a successful Consultant, is to run it as a part-time business rather than look at it as a full time career.

4. Franchising

One of the myths of the 21st century business world is that franchises are much more successful than independent businesses. Most franchises often lose money, and are often sold onto new owners who still believe the myth.

Anyone with the capital can own a franchise, and many companies that sell franchises often over saturate the market with their presence. The amount of visual franchises of one company, does not show success.

It often only shows, the franchise Companies are willing to saturate the market, as they still earn a percentage of turnover from each franchise.

5. High End Retail

The dream of owning a specialize Spa or fashion store catering solely for the high end market often ends with the reality that more high end retail outlets close then other outlets.

The high end market is essentially a “niche” market, which focuses on a small minority of clients. Social mobility studies show, that in the 21st Century, there is less mobility from the middle to high income brackets than ten years ago- in most societies.

The high end market is actually a diminishing market, although some high end retailers continue doing good business, simply because they have already a base of loyal clients.

Myths often outlive realities over what is a successful business. In the cases of all of the above, unless you have experience, a willingness to work extra hard, and the right business strategy- The business failure rate is highest in these five overrated businesses.