Talking Small Biz: 13 worst businesses to start now

THINKING OF starting a small business in 2013? About 500,000 businesses get started in the U.S. every year, and not all are good ideas. In fact, some are downright bad. American Express' Open Forum recently tapped the 13 worst businesses to start now:

* 1. A distribution business. Most products are a commodity, and almost anything can be purchased directly - and online - from a manufacturer, making distributors a dying breed. The middleman is on the way out.

* 2. A "deal-a-day" website. The industry is in a downturn, and merchants no longer want to give up their margin in an effort to find a new customer.

* 3. A frozen-yogurt shop. The market is saturated, and there seems to be one on every corner of the city.

* 4. A restaurant. Never mind the building codes and permits required. There's also high employee turnover and stiff competition.

"If you look at the businesses that are most likely to fail, it's restaurants. They need planning more than anybody because they can't adjust," Therese Flaherty, director of the Wharton Small Business Development Center, told me. "If you're in services or consulting, if somebody didn't buy your service yesterday, you change it today. But if you're in a restaurant, and you put a lot of money into your venue, you can't move."

* 5. A retail bookstore. More eBooks than paper copies were sold in 2012, and, of course, there is the online retail behemoth Amazon. (Borders learned this lesson the hard way.)

* 6. An Internet cafe. Many retail establishments offer free WiFi, and smartphones abound.

* 7. A video-rental store. Open Forum said that 39 billion videos were watched online in September alone. In addition, Redbox, with its $1 video rentals, has taken over the DVD market, and most big-box retailers sell movies and games.

* 8. A pay-phone-booth company. The world has more cellphones than toilets, based on my travels in less-industrialized countries.

* 9. A Hallmark card store. My wife and I use online outlets, like Cardstore, to make our own holiday cards. Enough said.

* 10. A retail clothing or shoe store. OK, I've even written about some startups here, but more and more of this is being done online, even though it's probably better to try on clothing before you buy.

* 11. A travel agency. Seriously? Most of this is being done online at sites including Orbitz and Expedia, or directly through airlines or hotels.

* 12. A limo company. With taxis facing competition from Uber, this area is uber-competitive.

* 13. An alcohol distributor. This is tightly controlled by state government, and it usually takes political juice to get licensed.

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