I was listening to a webinar drone on, and they had a slide that showed business failure rate, this went by quickly, so I looked up the data and found this:
According to the U.S. Bureau of Labor Statistics (BLS), the failure rate for new businesses is:
- First year: 23.2% of new businesses fail
- Five years: 48% of businesses fail
- Ten years: 65.3% of businesses fail
- Fifteen years or more: Only 25% of new businesses survive
Granted these statistics have been relatively consistent since the 1990s. However, failure rates can vary by industry, location, and economic conditions. I have seen lots of financial, insurance and accounting business work out nicely.
While mining, quarrying, and oil and gas extraction had the lowest survival rate, or the mines/wells were tapped out and it closes because of nothing else to mine or extract, so closed. Not all business are expect to go on forever.
New businesses have a high failure rate because of the pressures of raising capital, finding customers, and generating enough income. However, with the right planning, funding, and flexibility, businesses can have a better chance of succeeding.
It has worked for me for a few of my businesses.