Top Ten Business Can Dry Up Your Pocket Faster

What top ten businesses can dry up your pocket faster than any others? Which
soak up your time, money and talent before leaving you broke, in debt or outright bankrupt?

10. High End Retail

High end retail seems like a great way to make a fortune. You’re selling products to
the affluent. Why do these businesses fail so often? First, the inventory is expensive.
Second, many people setting them up end up with knock offs, cutting into their sales while
costing them money. High end retail is a niche market, and anyone entering that market is
competing with well known brands like Niemen Marcus and Williams Sonoma. Why go to a
new outlet that says it is high end retail when they can go to the brand name chain, know what
they are getting, save money with loyalty programs and know the company’s return policy?

9. Direct Sales

Direct sales businesses have a high failure rate for individual salespeople. While they have
very low capital costs, most people fail to sell the products except to their friends and family.
Those who buy inventory but can’t sell it must sell the inventory at a loss to the distributor or
other sales people. The top selling affiliates aren’t those who sell the most product but those
who specialize in recruiting other recruiters.
If you spent thousands of dollars to get into direct sales and fail, you may have blown time and
money better spent taking the bus to get a job at McDonalds orChick Fila. Then, at least,
you’d have been paid for your time. If you don’t succeed at direct sales, you get paid nothing
for your efforts and may even lose money if you bought merchandise you have to ship back to
the supplier.

8. Independent Restaurants

Why do so many people buy McDonalds and Subway franchises instead of their own signature
restaurant? Because over 50% of all independent restaurants fail in the first five years. For the
same amount of money, someone who buys an existing franchise gains access to a list of
approved suppliers with a good reputation, a successful business model, instant name
recognition and purchasing power with suppliers.
The cost of opening a restaurant is higher than many service oriented businesses because of
the additional permitting food preparers must satisfy. It costs thousands of dollars to set up a
commercial kitchen, whereas you can sell refurbished phones and vacuum cleaners out of a
barely cleaned up warehouse.

7. We Built a Website! Give Us Money!

Do you remember the dot com bust around 2000? There was an assumption that a good
website and advertising campaign was enough to generate money. There was no business
model behind it, like selling books from a warehouse like Amazon’s model to compete with
brick and mortar book stores. Websites are far cheaper to host today, but they are still a
breeding ground of financial loss. Many people invest in a business venture based on a slick
looking advertisement and lose their money.
Others buy affiliate products or services through a firm with a good website and big PR
campaign only to receive crappy merchandise or receive information on how to create their
own marketing campaign to sell affiliate products online. And all too often, people have their
bank accounts emptied when by giving credit card numbers to a beautifully designed landing
page. In these cases, there is nothing behind the website but a thief.

5. Arts And Crafts

Arts and crafts businesses have a spectacular failure rate. They can become
expensive failures, too, when someone invests thousands of dollars in craft supplies
in the hope of selling finished products for a small fortune. Etsy.comrecently
admitted that most of its sellers make a thousand or so dollars a year. This means
that they are hobbyists who sometimes make money, not well paid artisans. Instead
of making quilts to give to friends and family, the artisan spends hundreds of hours
to make a beautiful item that may not sell for the $500 asking price. If they had
spent the same amount of time at the mall monogramming knit shirts, they’d have
made thousands of dollars of money per year.

4. Consulting

When you can’t find a job, the next job in line is becoming a consultant.
Unfortunately, few people have the credentials to find regular employment as a
consultant. Anyone can become a life coach, but few garner enough paying clients to
pay their bills as one. A former executive may say he’s a business consultant, but he
won’t be hired to improve many facilities unless he has Six Sigma or PMP
certifications.
Consultants face the same challenge as other freelancers – if you don’t have
customers in front of you on the clock, you aren’t paid for your time. Unless you
work for a consulting firm that generates leads, you may not make any money as a
consultant. Consultants sometimes make the mistake of trying to sell expertise that
came from an affiliate company. A legal consultant who sells prepaid legal plans
isn’t a legal consultant – he’s a salesperson. A marketing consultant who read the
top five books in the field may be following the 4 Hour Workweek model, but he
probably won’t get anyone but a few small business people to give him the time of
day.
And the cost of joining the affiliate sales company to become a “consultant” is
anywhere from $5 to thousands of dollars, depending on the scheme. Many of the
most successful consultants are experts in their field before becoming consultants.
They build up the name recognition and client list before striking out on their own.
In other cases, the consultants are retirees who are consulting to stay in the business
but aren’t financially reliant on the income.

3. HVAC

HVAC stands for heating, ventilation and air conditioning. HVAC firms have a high
failure rate because they face moderately high capital expenses. HVAC company
owners are frequently laid off technicians or senior technical professionals who
decided to go into business for themselves. While they are often skilled at their jobs,
going into business for themselves takes them away from the billable hours fixing
someone’s AC or installing a commercial freezer to market the business, schedule
service calls and collect on invoices. And HVAC personnel rarely have the skills to
run the back office as well as they handle the service calls, leading to a high failure
rate. The cost of a truck, the tools and related expenses can put a newHVAC
business in debt before it starts. If they can’t generate the sales or are held liable for
a project, the business goes under.

2. Blogging for Money

We’ve all heard the stories about how someone created a blog, wrote a few articles
and makes thousand of dollars a month as a blogger. What these stories neglect to
mention is the million to one odds of this happening. Making money as a blogger
requires generating content that generates views while continually maintaining the
stream of visitors. There are niche financial blogs like GetRichSlowly and
WiseBread that earn the blogger a living. A number of Mommy blogs also generate
passive income for the Mom, as long as she balances cute observations, helpful tips
and credit card affiliate ads in careful balance. For most bloggers, the website is
nothing more than a way to vent energy in the digital equivalent of a permanent
record. If you worked for a content farm, at least you’d be earning a few dollars an
hour as a writer.

1. House Flippers

We’ve all seen the online and TV ads for making money with other people’s money.
House flipping shows are now as popular as home makeovers. Unfortunately, house
flipping is a business where one bad deal or even a modest delay can kill someone’s
finances. Borrowing money to buy a house is an incredible amount of debt. Even
small houses are $50,000. Then borrow a few thousand more to fix it up. Pay
realtor fees to sell it, more to clean it and fix it up and you’ve easily invested $5,000
to $20,000 in a 50K property.
If you try to save money by doing the repairs yourself, you may do such a poor job
that it devalues the property or fails inspection. You have to sell the property at a
high enough profit to not only pay for the purchase price, realtor fees and upgrades
but to pay your own living expenses while you were working on the project. Every
month the house doesn’t sell adds to the minimum required sale price, because you
have to pay the mortgage and your own bills regardless.

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