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With close to 60 percent of start-ups failing within three years, a business marketplace CEO says choosing the right sector is as important as any other strategic decision a new entrepreneur makes.
January has a way of sharpening entrepreneurial ambitions. For many, the start of a new year marks the point at which a long-held idea becomes a concrete plan. The statistics, however, counsel caution: close to 60 percent of UK start-ups fail within their first three years, and roughly one in five closes within 12 months.
The question is not simply whether to start a business, but where. Andrew Markou, co-owner and CEO of BusinessesForSale.com, a global marketplace connecting buyers and sellers across more than 130 countries, argues that sector selection is one of the most consequential decisions a new business owner can make.
“While no business is completely immune to challenges, there are specific industries that weather economic storms more successfully than others,” Markou said. “These sectors share common attributes: they provide essential services, generate recurring revenue, or serve markets with consistent demand regardless of economic conditions.”
Below, Markou identifies ten UK sectors with historically low failure rates and explains the underlying reasons for their resilience.
1. Real Estate
Property investment, development, management, and advisory services collectively generated nearly £270 billion in gross value added in 2022 – the highest contribution of any UK sector. Capital requirements present a significant barrier to entry, but those who clear it operate in a market where demand is structurally persistent.
“Property will always be in demand,” Markou said, noting that major cities including London, Manchester, and Glasgow continue to offer strong rental yields and long-term capital appreciation potential.
2. Transport
Road freight, courier services, removals, and logistics form the backbone of an industry expected to grow at a compound annual rate of nearly three percent through to 2027. The sector is capital-intensive at the outset but scalable, and digital freight platforms have reduced some of the traditional barriers to building a client base.
“Transport is a fundamental industry that keeps the economy moving,” Markou said. The sector tends to see its busiest periods between April and December, with demand driven by retail, construction, and seasonal logistics.
3. Funeral Services
Demand for funeral services is, by definition, unaffected by economic cycles. The UK’s ageing population makes the long-term outlook for the sector predictable, and independent operators continue to compete effectively alongside the large consolidated groups that dominate the market.
“The key is offering a supportive, affordable, and respectful service,” Markou said. “It creates customer loyalty and word-of-mouth referrals” – two qualities that are particularly valuable in a sector where trust is the primary currency.
4. Nursing and Care Services
Healthcare has consistently been among the most stable sectors in the UK economy, with residential care homes and at-home care services both seeing occupancy and profitability improve in recent years. Demographic trends – specifically the growing proportion of older adults requiring support – reinforce long-term demand.
“With an ageing population, demand for senior care services continues to rise,” Markou said. “Whether you’re starting from scratch or buying an existing operation, healthcare offers strong long-term prospects.”
5. Agriculture
The agricultural sector contributed £11.2 billion to the UK economy in 2021 and employs close to half a million people. Opportunities span conventional farming, consultancy, specialist production, and emerging areas such as biofuels. Analysis of UK farm performance shows that 21 percent of farms recorded average profits of £75,000 or more, with dairy and poultry operations among the most consistently profitable.
“Food production will always be necessary, making this sector recession-resistant,” Markou said, while acknowledging that entry costs and operational complexity present real challenges.
6. Launderettes
Well-located launderettes generate consistent, predictable cash flow from a service that customers need regardless of the economic climate. Labour costs are low relative to most retail operations, and additional revenue streams – detergent sales, vending, coin exchange – are straightforward to add.
“It’s one of the lowest-risk businesses for entrepreneurs,” Markou said. “The success rate is far higher than most industries.” Key variables include footfall, utility costs, and the ongoing maintenance of machinery.
7. Payment Processing
Every business that accepts card payments needs processing infrastructure, and the continued growth of e-commerce has expanded that market considerably. The UK digital payment processing industry was projected to reach £8.9 billion by 2024, having grown at a compound annual rate of 7.6 percent.
“In our increasingly digital economy, payment processing services will always be in demand,” Markou said. He notes that merger and acquisition activity in the sector has been increasing, creating potential exit opportunities for business owners who build scale.
8. Insurance Services
The UK insurance market is both large and stable. In 2022, 69 percent of UK adults held contents insurance and 68 percent held motor insurance. The general insurance market grew by 1.6 percent over five years and was on track to reach £75.6 billion by the end of 2023.
Motor vehicle and property insurance account for the majority of market activity. “Insurance products address fundamental needs,” Markou said. “The consistent demand makes this a reliable sector,” though profitability depends heavily on pricing discipline and claims management.
9. IT Support
Business reliance on technology has created sustained demand for IT support and managed services that shows no sign of abating. The UK IT services market is projected to grow at more than ten percent annually through to 2028, reaching a forecast value of £96.33 billion – driven in large part by accelerating adoption of cloud-based software across sectors.
“If you’re looking to avoid business failure, IT services could be a smart investment,” Markou said. “Businesses increasingly rely on technology, which means IT support will remain in high demand.”
10. Food
The UK food industry is the country’s largest manufacturing sector, with total business investment reaching £4.3 billion and sector output valued at £33 billion. Despite the pressures of inflation and rising energy costs in recent years, the fundamental proposition – that people will always need to eat – underpins the sector’s long-term resilience.
“The right product with defined markets and effective marketing strategies can bring profitable returns,” Markou said. “The food and drink industry has commercial maturity and multiple opportunities for entrepreneurs.”
Sector Choice Is Necessary But Not Sufficient
Markou is careful to frame sector selection as an advantage rather than a guarantee. The structural characteristics that make these industries resilient – essential services, recurring demand, demographic tailwinds – reduce risk but do not eliminate it.
“Even in the most stable sectors, poor management and ineffective marketing can lead to failure,” he said. “Choose wisely, but also execute well.” Entrepreneurs who combine a sound sector choice with a thorough understanding of their specific market, a realistic business plan, and the flexibility to adapt to changing conditions give themselves the best available odds of reaching the other side of that three-year threshold.
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