According to the United States Bureau of Labor Statistics, roughly 20% of small businesses fail within the first year. After two years, 30% of businesses will have failed, and by the end of the fifth year, about half will have failed.
But how many businesses survive 10 years?
Only 34.5% of businesses survive 10 years. By the end of a decade, only 30% of businesses will remain – a 70% failure rate. Only about half of small businesses survive past the five-year mark, ranging from 45.4% to 51%, depending on the year the business was started.
According to CB Insights’ analysis of over 100 postmortems to determine the primary reason for startup failure, the top five reasons small businesses fail are: no market need (42%), running out of cash (29%), not having the right team (23%), getting outcompeted (19%), and pricing/cost issues (18%) [2].
Overall, starting a business is risky and difficult. However, planning, funding, and flexibility can help businesses succeed.
