Table of contents
- Fast facts
- What business failure statistics actually show
- Survival rates over time
- Industry differences
- Ownership and startup outcomes
- Regional survival patterns
- How to read the numbers
Fast facts
Business failure statistics are not one story. The dataset shows a mix of survival rates, closures, openings, and subgroup differences that point to a more nuanced picture than a simple success-or-failure label.
- 34.7% of U.S. private-sector establishments born in March 2013 were still operating in March 2023 (BLS TED, Jan. 12, 2024).
- The average two-year survival rate for new employer establishments from 1994-2020 was 67.7% (SBA Office of Advocacy FAQ, Mar. 2023).
- The average five-year survival rate for the same group was 48.9% (SBA Office of Advocacy FAQ, Mar. 2023).
- The average ten-year survival rate was 33.7% (SBA Office of Advocacy FAQ, Mar. 2023).
- The average fifteen-year survival rate was 25.6% (SBA Office of Advocacy FAQ, Mar. 2023).
The core pattern in the data is simple: survival falls steadily as time passes, but the pace differs by cohort, industry, ownership type, and geography.
What business failure statistics actually show
Business failure statistics are often used as shorthand for the odds of a company shutting down, but the dataset is broader than that. It mixes establishment births, survival rates, openings, closures, and subgroup performance across multiple time horizons.
That matters because a business can fail quickly, survive for years, or continue operating while the wider market around it changes. The data here is most useful when read as a timeline rather than a single yes-or-no outcome.
The broad picture
The strongest high-level signal is the drop-off from early survival to long-term survival. Across new employer establishments from 1994-2020, the average survival rates were:
- 67.7% after two years (SBA Office of Advocacy FAQ, Mar. 2023).
- 48.9% after five years (SBA Office of Advocacy FAQ, Mar. 2023).
- 33.7% after ten years (SBA Office of Advocacy FAQ, Mar. 2023).
- 25.6% after fifteen years (SBA Office of Advocacy FAQ, Mar. 2023).
A clean way to read those figures is that the first few years are the biggest filter. Once a business crosses that early period, survival is still far from guaranteed, but the drop becomes a long tail rather than a cliff.
Why the framing matters
A lot of people hear “business failure” and assume it means most businesses disappear almost immediately. The data does not support that oversimplification.
Instead, it suggests three distinct stages:
- Early attrition, where many new establishments do not make it through the first several years.
- Midlife survival, where roughly half of employer establishments are still operating at five years.
- Long-run durability, where only about one in four lasts fifteen years (SBA Office of Advocacy FAQ, Mar. 2023).
That progression gives business failure statistics their real value: they show how risk accumulates over time.
Survival rates over time
The time-series data makes the survival curve easier to see. One of the clearest examples is the 2013 birth cohort in the private sector, which had a 100.0% survival rate at age 0 in 2013 and a 34.7% survival rate by 2023 (BLS TED, Jan. 12, 2024).
That is a decade-long drop of 65.3 percentage points, which is a strong reminder that the relevant question is usually not “will this business survive at all?” but “how long will it survive, and in what condition?”
Ten-year survival by industry
The 2013 birth cohort gives a useful comparison across industries because the same cohort appears in multiple sectors. The following table shows the 10-year survival rate in 2023 by industry (BLS TED, Jan. 12, 2024):
| Industry | 10-year survival rate |
|---|---|
| Utilities | 45.7% |
| Manufacturing | 43.6% |
| Real estate and rental and leasing | 42.2% |
| Retail trade | 41.7% |
| Construction | 40.1% |
| Other services except public administration | 39.6% |
| Educational services | 38.9% |
| Accommodation and food services | 38.2% |
| Finance and insurance | 37.5% |
| Health care and social assistance | 35.7% |
| Arts, entertainment, and recreation | 35.4% |
| Total private sector | 34.7% |
| Administrative and waste services | 34.2% |
| Transportation and warehousing | 34.0% |
| Management of companies and enterprises | 33.0% |
| Professional, scientific, and technical services | 30.9% |
| Wholesale trade | 30.1% |
| Information | 29.1% |
| Mining, quarrying, and oil and gas extraction | 24.5% |
The spread is large enough to matter. Utilities at 45.7% is far above mining, quarrying, and oil and gas extraction at 24.5% (BLS TED, Jan. 12, 2024). That is not a minor difference; it is a sign that sector structure shapes survival.
The shape of the decline
Even within the same cohort, the decline is not uniform. Agriculture, forestry, fishing, and hunting started at 100.0% at age 0, then moved to 87.5% at age 1, 81.0% at age 2, 75.7% at age 3, 70.7% at age 4, and 66.2% at age 5 (BLS TED, Jan. 12, 2024).
It continued to 62.5% at age 6, 59.1% at age 7, 57.2% at age 8, 53.2% at age 9, and 50.5% at age 10 (BLS TED, Jan. 12, 2024).
That sequence is useful because it shows a gradual erosion rather than an abrupt collapse. For long-lived sectors, the story is often not a single dramatic failure point, but a steady filtering process.
Industry differences
Industry is one of the clearest lenses for understanding business failure statistics. The same overall economy can produce very different survival outcomes depending on the operating model, capital needs, and market structure behind each sector.
Higher-survival sectors in the supplied data
Among the 2013 cohort, the highest 10-year survival rate listed is utilities at 45.7% (BLS TED, Jan. 12, 2024). Other relatively higher sectors include:
- Manufacturing: 43.6% (BLS TED, Jan. 12, 2024)
- Real estate and rental and leasing: 42.2% (BLS TED, Jan. 12, 2024)
- Retail trade: 41.7% (BLS TED, Jan. 12, 2024)
- Construction: 40.1% (BLS TED, Jan. 12, 2024)
These are still not high survival rates in an absolute sense. But in a business-failure context, relative position matters. A 45.7% ten-year survival rate means nearly half of the cohort is still operating after a decade, which is materially different from sectors clustered around the low 30s or 20s.
Lower-survival sectors in the supplied data
At the lower end, the same 2013 cohort shows:
- Professional, scientific, and technical services: 30.9% (BLS TED, Jan. 12, 2024)
- Wholesale trade: 30.1% (BLS TED, Jan. 12, 2024)
- Information: 29.1% (BLS TED, Jan. 12, 2024)
- Mining, quarrying, and oil and gas extraction: 24.5% (BLS TED, Jan. 12, 2024)
The gap between the top and bottom of the list is significant. A sector with a 45.7% ten-year survival rate is not playing the same game as one at 24.5%.
What the sector spread tells you
The practical takeaway is not that one industry is “good” and another is “bad.” It is that business failure statistics are sensitive to the type of business being measured.
When you compare sectors, you are also comparing:
- Startup cost structures
- Customer demand volatility
- Regulation and compliance burden
- Dependence on capital investment
- Exposure to commodity or cycle risk
The dataset does not measure those causes directly, but the survival differences strongly suggest they matter (BLS TED, Jan. 12, 2024).
Ownership and startup outcomes
The dataset also shows that ownership group can line up with different short-run survival outcomes. That does not explain everything, but it does show that averages can hide a lot of variation.
Two-year survival by ownership group
For young employer establishments in 2017-2019, the overall two-year survival rate was 79% (SBA Office of Advocacy FAQ, Mar. 2023).
By ownership group, the same measure was:
- Women-owned: 81%
- Black-owned: 73%
- Hispanic-owned: 82%
- Asian-owned: 78%
- Veteran-owned: 84%
All figures in this list are from the SBA Office of Advocacy FAQ, Mar. 2023.
Reading the ownership numbers carefully
The spread between 73% and 84% is meaningful, but the right interpretation is careful comparison, not oversimplification. The dataset gives short-run survival outcomes for a defined period and a defined group of young employer establishments.
What you can say from the numbers alone is:
- Veteran-owned young employer establishments had the highest two-year survival rate in this set at 84% (SBA Office of Advocacy FAQ, Mar. 2023).
- Hispanic-owned young employer establishments also performed strongly at 82%.
- Women-owned young employer establishments were at 81%.
- Black-owned young employer establishments were lower at 73%.
The data supports the conclusion that ownership group and survival are not evenly distributed. It does not, by itself, explain why.
Startup volume and closure volume in 2020
The same source gives a broader view of market churn in 2020:
- About 1.07 million business establishments opened for the first time (SBA Office of Advocacy FAQ, Mar. 2023).
- About 1.02 million establishments closed permanently (SBA Office of Advocacy FAQ, Mar. 2023).
- About 13.1% of business establishments were startups in 2020 (SBA Office of Advocacy FAQ, Mar. 2023).
Those numbers matter because they show that business failure statistics are not only about exit. They are about turnover.
Fast facts on startup churn
- Openings and permanent closures were close in scale in 2020, which suggests heavy churn rather than a one-sided collapse (SBA Office of Advocacy FAQ, Mar. 2023).
- A startup share of 13.1% means startups were a meaningful slice of the business landscape, not a fringe category (SBA Office of Advocacy FAQ, Mar. 2023).
- Survival data and startup counts should be read together, because high formation can coexist with high attrition.
Regional survival patterns
Geography also changes the picture. The dataset includes 1-year establishment survival rates for U.S. Census divisions across different years, and the values vary enough to show regional differences.
Selected division comparisons
| Year | Division | 1-year survival rate |
|---|---|---|
| 1994 | New England | 80.9% |
| 2001 | Middle Atlantic | 74.8% |
| 2008 | South Atlantic | 71.4% |
| 2010 | Pacific | 78.2% |
| 2016 | Pacific | 81.5% |
| 2020 | West South Central | 81.5% |
| 2020 | East North Central | 82.1% |
| 2020 | South Atlantic | 80.6% |
| 2021 | Pacific | 84.6% |
| 2022 | New England | 77.6% |
| 2022 | Pacific | 77.1% |
All figures in the table are from BLS TED, Mar. 4, 2024.
What stands out regionally
The Pacific division’s 84.6% one-year establishment survival rate in 2021 is the highest in the series provided (BLS TED, Mar. 4, 2024). That is notable because it sits well above the earlier Pacific values of 78.2% in 2010 and 81.5% in 2016.
The regional data also shows that survival is not locked to one static ranking. For example:
- New England appears at 80.9% in 1994 and 77.6% in 2022.
- South Atlantic appears at 71.4% in 2008 and 80.6% in 2020.
- Pacific rises to 84.6% in 2021, then sits at 77.1% in 2022 (BLS TED, Mar. 4, 2024).
That pattern suggests the environment changes over time and by division, so regional business failure statistics should be treated as time-specific snapshots rather than permanent rankings.
How to read the numbers
A useful way to interpret business failure statistics is to separate the dataset into three layers: time, sector, and subgroup.
1. Time tells you the survival curve
The long-run averages show the shape of decay from 67.7% at two years to 25.6% at fifteen years (SBA Office of Advocacy FAQ, Mar. 2023). That is the simplest way to understand the baseline risk profile.
2. Sector tells you where survival is easier or harder
The 2013 cohort’s ten-year survival rate ranges from 45.7% in utilities to 24.5% in mining, quarrying, and oil and gas extraction (BLS TED, Jan. 12, 2024). This is the clearest comparison in the dataset for where survival pressure is lighter or heavier.
3. Subgroup data tells you the averages are incomplete
Ownership type and regional division both shift the numbers:
- Veteran-owned young employer establishments reached 84% two-year survival (SBA Office of Advocacy FAQ, Mar. 2023).
- Black-owned young employer establishments were at 73%.
- Pacific division survival reached 84.6% in 2021 (BLS TED, Mar. 4, 2024).
- Other regional values fell into the low-to-mid 70s or low 80s.
That mix is exactly why this topic needs more than one headline number.
A practical reading of business failure statistics
If you are using this dataset for research, content, planning, or benchmarking, the most defensible reading is:
- New businesses face meaningful attrition.
- Most survival loss happens early, but survival continues to fall over time.
- Industry materially changes the odds.
- Ownership and geography also shape outcomes.
- Openings and closures can both be high at the same time, which means churn is part of the normal business cycle.
Those points all come directly from the supplied statistics and together they give a more accurate view than any single percentage could provide.