Most Unsuccessful Small Business Ideas

All small business ideas have the potential for failure. If you don't have realistic expectations and you haven't researched the market, you're probably going to run your business into the ground. But what are the most unsuccessful small business ideas? And why don't they work?

Entering an over-saturated market.

The market is not universally or eternally resilient. Eventually a market can become so saturated that no new small businesses in that niche will survive, and trying to force a place for yourself will only lead to failure.

In Houston, for example, apartment locaters were a hot new thing for about five minutes. Then it seemed a new apartment locater was opening on every street corner, and as quickly as they opened up shop, the For Lease signs were in their windows again. This is among the most unsuccessful small business ideas because there were just too many of them. Only a few survived the onslaught, and the rest are history.

Starting a seasonal small business with no scalability.

You might be able to open a Christmas shop if you can sell items for other holidays throughout the year. And perhaps your landscaping business will thrive if you offer snow shoveling or other services in the winter. But if you open a seasonal business that can't be operational during other times of year, you've failed before you start.

Among the most unsuccessful business ideas are those that limit your ability to sell. If you are confined to a specific time of year, you'll flounder during those months and you'll probably go under.

Taking advantage of your customers.

Overcharging for products or services your client base can find elsewhere for half the price. Promising a result you know won't materialize. You might be able to generate income in the short-term by bilking your customers out of the hard-earned cash, but eventually they'll catch on and you'll be out in the cold.

Perhaps the most unsuccessful small business ideas of all are those that don't deliver on promises. Whether you're intentionally or accidentally preying on your client base, you can expect it to come around and bite you down the road.

Over-estimating the demand.

Just because you think people should want your product or service doesn't mean they will. The most unsuccessful small business ideas make assumptions about the market that never turn out to be true. Unless you can find empirical evidence that your product or service is in demand, don't waste your time on it.

This is why small business owners are often cautioned against "re-inventing the wheel." Entering uncharted territory or taking a big risk might pay off in a big way-or it might leave you bankrupt. Go with a product or service that has proven commercial viability.

There are always exceptions, and sometimes what we think will be unsuccessful small business ideas actually turn out to be highly profitable. But the question is whether you have the capital and time to waste on a venture that might not pan out.