Voice of the Industry
“The 7 Most Overrated Businesses”
By Patrick Henry
Published: September 2, 2009
Printing most definitely isn’t one of them, but be careful of a certain business model within which many printing businesses are started up. An article by Kelly K. Spors and Kevin Salwen at the Yahoo! Small Business Answers Center counsels would-be entrepreneurs to look before they leap into independent ventures that may well fall flat. “Many people do a lousy job of picking businesses they can realistically turn into a profitable operation,” say the writers, both longtime contributors to The Wall Street Journal. Entrepreneurs go wrong, they claim, by picking businesses that seem cheap and easy to launch or glamorous to be associated with. Here’s their list of traps for the unwary: 1. Restaurants. (They have a high failure rate and are “among the toughest businesses to run.”) 2. Direct sales. (The only way to make real money in home-based sales: recruit junior reps and take a cut of their commissions.) 3. Online retail. (Selling on eBay isn’t what it was 10 years ago.) 4. High-end retail. (These days, conspicuous consumption is ashamed to show its face.) 5. Independent consulting. (The valleys may be deeper than the peaks are high. We can only sigh in agreement.) 6. Franchise ownership. (Franchise terms often stack the deck against the franchisee. Contracts that go bad are hard to get out of. Besides, “It's a myth that franchises are far more successful than independent businesses.”) 7. Traffic-driven web sites. (Think your blog is going to turn into the next Facebook? Think again.) Are there realistic opportunities for those who hope to make it on their own? “Aspiring entrepreneurs should create firms in which they have professional experience so they have a competitive advantage in the market,” the authors say. That certainly would explain the success of printing firms launched by ex-press operators, sales reps, and others who learned the business by working for others.