Business ownership in Canada is not easy, and every industry experiences ups and downs. For entrepreneurs, the journey is filled with surprises and challenges, one of which is - unfortunately - business failure.
Despite the fact that all industries experience turbulence, there are fail proof business ideas with proven stability and low risk. The opportunities we’ll list below have an increased success rate, thanks to their resilience. Over the years, data has proven that these fundamental industries can withstand significant challenges.
The goal of this article is to provide entrepreneurs and business buyers with fail proof business ideas in the most stable industries. While some of the businesses listed do not have the highest profit margin, their low failure rate ensures a stable, long-term source of income.
We’ll talk about the following businesses that will never die:
- Accounting and bookkeeping
- Auto repair shops
- Childcare services
- Grocery businesses
- Home care services
- Insurance agencies
- Legal services
- Real estate
- Food services
- Tax services
10 businesses that will never fail
Accounting and bookkeeping
Accounting and bookkeeping are services that everyone needs. In 2023, 70% of the Canadian accounting and bookkeeping market recorded significant growth in revenue. Client growth, additional services, and streamlined internal procedures such as cloud-based account management are just some of the methods used to increase revenue.
Overall, accounting and bookkeeping is one of the lowest-risk businesses on this list. It demands a lot of time and knowledge that can take an owner away from other core business activities. As such, the industry has been one of the most resilient and has a significantly low failure rate.
Auto repair shops
While a physical labor shortage in Canada does bring disadvantages, it also brings opportunity, particularly for mechanics. As one of the most in-demand trades, auto repair shops are a great option for entrepreneurs or business buyers with appropriate automotive expertise.
Regardless of economic conditions, there will always be a need for this business. Although the profit margin of an auto repair shop is anywhere between 6%-9% a year, it’s a business that will always be in demand.
While the automotive sector is slowly moving to electric vehicles, the need for qualified technicians and shops to work on these new vehicles is steadily rising. When compared to other popular industries, auto repair shops have a below-average business failure rate. Keep in mind though, that your location, services offered, customer satisfaction, and price will dictate your success rate.
Childcare services
The majority of households have both parents producing an income, so the need for safe and reliable childcare service is increasing.
With a 44% increase in 0-5-year-old children attending non-parental childcare services, this is a sector that will always be in demand. As more professionals go back to work, the number of childcare service businesses continues to grow.
Whether on a small scale (at home) or having an entire center dedicated to childcare services, the growing population, additional government support, and rising wages make it a candidate for the most stable industry.
Grocery business
It’s clear why grocery businesses are part of one of the most stable industries in Canada. It provides a vital service to all citizens. Although the pandemic caused compound annual growth rates to fall slightly, industry revenue is expected to reach $85.3 billion by the end of 2024.
Amidst food shortages affected by global events and rising employment wage rates, grocery stores prevail and remain one of the businesses that will always be in demand. Net profit margins for a large grocery retailer are 1%-3%. While these numbers are not the highest, a steady demand makes grocery stores a good investment opportunity.
Food-related businesses are resilient because it is an essential service for everyone. However, it’s important to develop a strong business plan, marketing strategy and invest in the right location to ensure growth and success.
Home care services
Canada is renowned for offering top-notch healthcare to its citizens. The home care service sector is one of the top industries in demand, with a market value set to reach $7.1 billion by the end of the year.
A projected compound annual growth rate of 7.93% over the next seven years signals a strong demand and a great time to get into a business that never fails. By 2030, the home care services market will be worth $53 billion.
It’s easy to see why home care services are a great business to invest in. Positive projections, alongside an aging population and an increase in medical conditions, make the business failure rate low and demand growing year after year.
Insurance agencies
Insurance agencies are businesses with low failure rates and form part of a fundamental industry. Canadians are mandated by law to have insurance on vehicles, property (mortgage), companies, and so on.
Over the next four years, the CAGR is expected to rise by 6%. The majority of the sector is taken up by property and automobile sectors. On average, the profit margin for insurance agencies is 8.7%.
The fact that insurance is mandatory for certain assets or processes in Canada makes it a great investment option for entrepreneurs. Its resilience is accredited to continuous demand, making it one of the businesses with the lowest failure rates.
Legal services
Law firms, especially those who deal with corporate clients, are renowned for having some of the lowest failure rates. 2023 alone saw a 0.6% CAGR increase, while the past five years saw a 1.8% jump, making the market value a total of $18.7 billion.
The most in demand law firm sectors are commercial, family law, and estate litigation. However, most law firms will stand the test of time regardless of specialty. The need for lawyers and law firms will never subside.
Legal services have always been resilient regardless of economic trends. As businesses evolve and continue to grow, a good law firm is able to guide owners in the right direction. Lastly, laws and regulations are constantly changing, making legal services necessary and less likely to fail if expert and accurate legal counsel is provided.
Real estate
Real estate agencies have always been amongst businesses that rarely fail. The Canadian real estate market is blossoming, with a current market value of $59.30 billion USD. Although real estate prices have calmed down recently, the compound annual growth rate is projected to climb by 3.2% in the next five years.
Real estate agents have a commission ranging between 3%-7% of the sale price of a property. Additionally, the profit margin for real estate agencies is one of the highest on this list. On average, an outstanding real estate agency can have a 35% profit margin.
Overall, the ongoing need for a broker, agent, or real estate agency plays a key role in the industry’s resilience. With over 500,000 people immigrating to Canada yearly, real estate agencies will always be in high demand.
Food services
While food services are a risky business to invest in, they are still part of a profitable industry. The Canadian food service market is experiencing a high compound annual growth rate. By 2029, the CAGR will be 19%, bringing the entire industry to a $261 billion USD valuation.
Although the food service industry is known for having low profit margins, there are certain domains, like food trucks and takeout restaurants, which can have a 6%-9% profit margin, whereas full-service restaurants only have 3%-5%.
Even with major hurdles such as Covid-19 and increasing costs, the food service industry is here to stay. Online food delivery services have played a key role in its resilience. 49% of Canadians reported ordering food via online apps. While consumer habits are changing, the industry as a whole is growing exponentially.
Tax services
Last on our list are tax services. This includes corporate and personal tax preparation services. It is another vital industry in Canada that will not disappear anytime soon. There is no replacement for a licensed tax CPA (even in the face of AI).
In the past five years, the tax services industry has experienced a compound annual growth rate of 3.4% and is expected to climb to 5.8% in the future. Currently, the market valuation is at $1.7 billion USD.
Even though the net profit margin varies from one business to another, the exponential growth is a testament to this sector’s resilience. Taxes are complicated,and many business owners will need help from a tax professional throughout their business’s lifetime.
Helpful FAQs
What businesses are least likely to fail?
Apart from the businesses and industries mentioned above, these are additional businesses that are least likely to fail:
- Vending machine business
- Laundromats
- Short-term rentals (AirBnb)
- Warehouse management and storage
- Transport companies
What are the top five reasons businesses fail?
Running a successful business is no walk in the park. Many first-time business owners end up failing. Below are the top five reasons why businesses fail:
- Not understanding the numbers. Not tracking revenue and expenses will lead to cash flow issues and a decline in profits.
- Not securing funding and capital. Running a successful business requires capital. Unfortunately, most new business owners do not know where and how to access funds to make their business grow.
- Having a product with no demand. A lot of businesses fail because they create a product or service that is not needed. No market demand means no revenue.
- Not creating a business plan. A business plan is crucial if you want a company to succeed. It is a roadmap to success. Unfortunately, many first-time business owners try to “wing it” and ultimately have failing businesses.
- Bad management. As a business owner, one must define their strengths and weaknesses. Some are born leaders, while others need to hire staff to ensure a business is successful.
What industries will never go out of business?
Some industries are so deeply ingrained in the Canadian economy that they will never go out of business. So what services are in high demand? Besides the one listed above, additional industries include agriculture, education, transportation, manufacturing, and construction.
Bottom line: businesses that never fail
Navigating the business world can seem overwhelming. Reading this article should help you get a better idea of what a business with low failure rates offers. When buying or starting a business that is least likely to fail, it’s still important to constantly adapt, upgrade, and cater to consumer and industry shifts. Understanding the cyclical nature of specific industries is also important for budgeting when seasonal slow-downs happen.
If you’re looking to begin a new venture in Canada, be sure to browse our selection of businesses for sale in the most popular industries.
Moreover, if you are the proud owner of a business, think about taking it to the next level by reading our latest articles on growing your business and improving its cash flow.
We hope this article has been insightful, and we wish you success on your new business venture!
@Be_theBoss