Small Business Survival Rate by Industry: 50.6% at Year 5

About 79.6 percent of new U.S. businesses survive their first year, 50.6 percent are still operating at five years, and 34.7 percent reach ten years, based on Bureau of Labor Statistics data. Survival varies sharply by industry: five-year rates run from about 44 percent in the information sector to about 66 percent in agriculture.

What share of new businesses survive one, five, and ten years?

The Bureau of Labor Statistics tracks every private-sector establishment that opens through its Business Employment Dynamics program, which makes it the most reliable survival data available. Across all industries, about 79.6 percent of new businesses are still operating one year in, 50.6 percent at five years, and 34.7 percent at ten years. In the most recent cohort — businesses that opened in the year ended March 2024 — 22.1 percent had closed by March 2025, which is close to the long-run first-year average.

That means the widely repeated claim that 90 percent of small businesses fail is simply wrong. Roughly half of new businesses are still trading after five years, and a third are still trading after ten. What the data does show is that closure risk is front-loaded: the single riskiest stretch is the first twelve to twenty-four months, when a business is still proving demand and has the thinnest cash reserves.

How long do most small businesses last?

Most new U.S. employer businesses last somewhere between five and ten years. About 79.6 percent are still open at one year, 50.6 percent at five, and 34.7 percent at ten, so the halfway point of a new business cohort falls at roughly the five-year mark. Closure risk is concentrated in the first two years.

The more useful way to read those three numbers is as a curve that flattens, because the annual risk of closing drops sharply the longer a business trades. A new business loses 20.4 percent of its cohort in year one alone. Between year five and year ten it loses about 16 percentage points spread across five years — roughly 6 percent of the survivors each year, against more than 20 percent in year one.

Put from the owner's side: of the businesses still trading at one year, about 64 percent go on to reach five. Of those still trading at five, about 69 percent reach ten. Surviving the opening stretch is the hard part, and it changes your odds materially rather than marginally. That is also why the age of a business carries so much weight in underwriting — time in business is a direct proxy for the risk that the business will not be there next year.

Which industries have the highest and lowest survival rates?

Here is every major industry sector in the BLS Business Employment Dynamics survival series, ranked by the share of new establishments still operating at five years. Agriculture is the most durable sector and mining the least, with 26 percentage points between them at the five-year mark:

Notice that the ranking reshuffles over time. Mining survives its first year better than the information sector does, but by year ten only 24.4 percent of mining establishments remain against 29.1 percent in information — commodity price cycles catch up with them. Retail looks stronger than its reputation at one and five years, then thins out at ten. The gap between the best and worst five-year rate is about 26 percentage points, which is a much bigger spread than most owners assume.

Why survival rates differ so much between industries

Three factors explain most of the variation. The first is revenue predictability: sectors built on contracts, leases, licences, and repeat necessity purchases have visible cash coming in months ahead, while sectors that depend on winning each new project start every quarter from zero. The second is asset backing. A business with equipment, land, or inventory has collateral to borrow against and something to sell in a bad year, which buys time that a service business with a laptop does not have.

The third is timing of cash, and it is the one owners underestimate. A construction firm can be profitable on paper and still fail while waiting 30 to 90 days on invoices it has already spent money to fulfil. That is why construction, transportation, and food service show weaker survival despite steady demand — the gap between paying for the work and getting paid for it is where most closures actually happen. Our small business failure rate statistics break down the causes in more detail.

What is the small business failure rate by industry?

The failure rate is simply the other side of the survival rate: whatever share of new businesses is still open, the rest have closed. Across all industries, 20.4 percent of new U.S. businesses fail within one year, 49.4 percent within five years, and 65.3 percent within ten. By industry, five-year failure ranges from about 34 percent to about 60 percent.

Here is the same BLS Business Employment Dynamics data expressed as closure rates — the share of new establishments that had closed by one, five, and ten years, worst first:

The all-industry average sits at 49.4 percent failure by year five, so roughly half of these sectors beat the average and half trail it. If you want the reasons behind these closures rather than the rates themselves, our small business failure rate statistics cover what actually goes wrong.

Which industry has the highest failure rate, and which has the lowest?

Over five years, mining, quarrying, and oil and gas extraction has the highest failure rate at about 59.8 percent, followed by the information sector at 55.7 percent. Agriculture, forestry, fishing and hunting has the lowest at about 33.8 percent. Measured at one year instead, information leads with 25.1 percent.

The ranking depends on the horizon you pick, which is why two sources can both be right and still disagree. Mining survives its first year better than information does, then falls hardest: by year ten, three quarters of new mining establishments are gone, because a single commodity price cycle can wipe out an operation that was healthy when it opened. Information is the reverse pattern — heavy early attrition from businesses that never find a paying market, and a somewhat steadier core afterwards.

Agriculture's position at the top surprises most people. It is not that farming is easy; it is that agricultural businesses tend to hold land and equipment, sell into predictable demand, and often operate alongside other household income, all of which lets them absorb a bad year instead of closing in one.

Failure rate or closure rate? What these numbers actually count

BLS Business Employment Dynamics counts establishment closures, not bankruptcies. A business that shuts down appears in these statistics whether it collapsed, was sold and re-registered, merged into another company, or simply closed because the owner retired. So the true rate of businesses failing in the ordinary sense of the word is somewhat lower than the closure numbers above.

Two other limits are worth knowing before you quote these figures. First, BED tracks establishments with employees, so the millions of U.S. sole proprietors and other nonemployer businesses are not counted here at all. Second, an establishment is a physical location, not a company, so a chain closing one site registers as a closure even though the business continues. None of this changes the shape of the curve — closure risk is front-loaded and varies widely by sector — but it does mean the honest reading is “about half of new employer establishments are gone within five years,” not “half of all businesses fail.”

The official BLS survival rate data (Business Employment Dynamics)

The official U.S. business survival figures come from a single table: Table 7, “Survival of private sector establishments by opening year,” published by the Bureau of Labor Statistics through its Business Employment Dynamics program. It takes every private-sector establishment that opened in a given year and reports how many of that exact group are still operating each March afterward.

The age and survival tables are annual and keyed to March. The current release covers 32 opening-year cohorts, from the year ended March 1994 through the year ended March 2025, and BLS publishes the same tables for each major industry and for individual states as well as for total private industry.

Here is the most recent cohort to complete a full decade — the 677,876 establishments that opened in the year ended March 2015, followed through March 2025:

The 79.6 / 50.6 / 34.7 figures quoted at the top of this page come from the cohort that opened in the year ended March 2013, which is the series most commonly cited. Either cohort tells the same story, because the numbers barely move: across the 22 cohorts that have now completed ten years, ten-year survival has stayed inside a band of 32.4 to 35.3 percent.

Survival rates for new establishments vs. all establishments

BLS survival rates describe new establishments only — one opening-year group followed forward — not the odds facing a typical American business. In March 2025 the BLS counted 9,327,405 private-sector establishments, and 980,333 of them, about 10.5 percent, were less than a year old.

That distinction is where “half of businesses fail within five years” goes wrong in ordinary conversation. The statistic applies to the roughly one-in-ten slice of the establishment universe that is brand new in any given year. The other nine in ten have already cleared the stretch the number is measuring, and their annual odds are nothing like a first-year business's.

Table 7 draws a second version of the same distinction inside itself. One column reports survival since birth, which is the cumulative figure everyone quotes; the next reports the survival of the previous year's survivors, which is the annual rate for establishments that have already made it that far. For the March 2015 cohort that annual rate starts at 79.6 percent in year one, reaches 90.5 percent by year five and 92.8 percent by year ten. Same businesses, steadily falling risk — which is precisely why time in business carries so much weight when a funder reads a file.

Survival at 5 years vs. 10 years — what the gap tells you

Roughly half of new establishments reach five years and about a third reach ten, but the second five years are far less dangerous than the first. Of the businesses that opened in the year ended March 2015, 50.2 percent were still open at year five and 34.7 percent at year ten — meaning about 69 percent of the five-year survivors went on to reach ten.

Counted in businesses rather than percentages the contrast is sharper still. That cohort lost 337,595 establishments during years one through five, and 105,210 during years six through ten. Two windows of identical length, and the first closed roughly three times as many businesses as the second. Nothing about the second five years is easy, but the attrition an owner is bracing for is mostly behind them by then.

The two milestones also behave differently over time. Five-year survival has ranged from 45.4 to 51.9 percent across the 27 cohorts that have reached it, because a recession landing inside a cohort's first five years shows up plainly — the group that opened in the year ended March 2006 ran into the financial crisis and finished lowest. Ten-year survival sits in a much tighter 32.4 to 35.3 percent band. The early years are where conditions decide outcomes; after that, the businesses still standing are largely the ones that were going to stand.

For an owner, the practical reading is that the two hardest things to hold onto in the early window are cash timing and access to capital, and both are easier to arrange before the pressure arrives. Funder guidelines lean heavily on time in business for the same reason the data does: a business two years in is a different risk from the same business at six months. The Broker Shop is a funding broker rather than a funder, so a single application is matched against the guidelines of more than 50 competing lenders — including the ones that work comfortably with younger businesses.

Where the official BLS business survival tables are, and how to read them

The official figures live in the Bureau of Labor Statistics Business Employment Dynamics establishment age and survival series, published as plain-text tables at bls.gov/bdm. Table 7 holds survival by opening year, Table 5 the count of establishments by age. Both are annual, keyed to March, and released for the nation, for each major industry, and for every state.

Table 7 reports two different survival columns and they answer different questions. Survival since birth is cumulative — the share of an opening-year group still trading, which is the figure everyone quotes. Survival of the previous year’s survivors is the annual conditional rate: of the businesses that made it to last March, how many made it to this one. For the March 2015 cohort that annual rate runs 79.6 percent in year one, 90.5 percent by year five and 92.8 percent by year ten. Quote the first column for “how many new businesses survive five years,” the second for “what are the odds this year.”

Two details change how you read every number in these tables. The unit is the establishment — a single physical location with employees — not the company, so a chain closing one site counts as a closure while the company trades on. And because the unit has employees, U.S. nonemployer businesses are outside the series entirely. State files follow the pattern <state>_age_total_table7.txt, so an owner in Texas or Florida can pull their own state’s curve rather than the national one.

Have business survival rates changed since 1994?

Barely. Across the 32 opening-year cohorts BLS has tracked since 1994, first-year survival has stayed between 75.2 and 80.9 percent, five-year survival between 45.4 and 51.9 percent, and ten-year survival inside a band of 32.4 to 35.3 percent. Recessions move the curve by a few points, not by tens of points.

The pattern in that table is worth more than any single row. The weakest five-year cohort is the one that opened in the year ended March 2006, at 45.4 percent — it ran into the financial crisis in years two through four. The strongest ten-year cohorts are the ones that opened in 2010 and 2011, at 35.3 and 35.1 percent, because they opened into a recovery instead of a contraction. What decides a cohort’s outcome is mostly the conditions of its first few years, not the decade it belongs to.

The most recent cohorts carry a signal of their own. The year ended March 2022 opened 1,065,228 establishments, the first cohort in the series to pass a million and about 90 percent larger than the 2010 low of 560,391. That cohort’s first-year survival came in at 76.3 percent, the weakest since the 2008 cohort’s 75.2 percent. A record number of businesses opened and a slightly higher-than-usual share of them did not see a second March — which is what a wave of thinly capitalised openings looks like in the data, rather than a collapse in demand.

How to read these numbers for your own business

An industry survival rate is a base rate, not a forecast. It describes the average of thousands of businesses, including undercapitalised startups and part-time ventures, and says nothing about a specific operator with a real customer base. The useful move is to treat a low industry rate as a signal about which risk to manage: in construction and trucking, manage collection timing and keep a buffer; in information and retail, watch demand and fixed costs; in capital-intensive sectors, avoid tying every dollar up in one asset. A simple cash flow management routine matters more than the sector you picked.

Access to capital before the crunch is part of that buffer. The Broker Shop is a funding broker, not a funder — we match owners with over 50 competing lenders, so one application reaches the funders whose guidelines your business meets, including funders that work comfortably with industries the banks treat as high risk. Compare the funding options, and it is free to apply — checking your options won't affect your credit score.

Why do profitable businesses still close?

A business closes when it runs out of cash, which is not the same as running out of profit. A firm can be profitable on every job it books and still fail while waiting to be paid for work it has already funded — payroll, materials and rent all leave the account before the invoice clears. Profit is an accounting result; survival is a timing problem.

This is the mechanism behind most of the industry spread further up this page. Construction, transportation and food service do not suffer from weak demand — they suffer from the distance between spending money and collecting it. A contractor carrying 60-day terms on a job that took 30 days to complete has financed that customer for three months out of their own working capital, and does it again on the next job. Growth makes it worse, not better: every additional job widens the gap before it closes it.

Cost pressure compounds the same problem from the other direction. In the Federal Reserve's 2026 Report on Employer Firms, the most common reason firms sought financing was simply to meet operating expenses (56 percent), ahead of pursuing an expansion or new opportunity (46 percent) — most borrowing is about holding the position rather than extending it. The same survey found that of the firms that applied, 42 percent received the full amount they sought, 36 percent received some or most of it, and 22 percent received none.

That last split is the argument for arranging access to capital before you need it rather than during the squeeze. A business applying while its statements still look healthy is a materially different file from the same business applying after two thin months, and the second version is the one that lands in the 22 percent. Building a simple cash flow routine and knowing which products fit the gap — a line of credit for timing, invoice factoring when the money is genuinely owed to you — is what turns a survivable bad quarter into an ordinary one.

The Broker Shop is a funding broker, not a funder. One application is matched against the funders whose guidelines your business meets, so you compare real offers side by side instead of applying to each one in turn. It is free to apply, and checking your options won't affect your credit score.

Frequently Asked Questions

Sources: U.S. Bureau of Labor Statistics — BED Table 7, Survival of private sector establishments by opening year (through March 2025) · BLS — Establishment Age and Survival Data (BED tables 5–7, national, industry and state) · BLS — 1-year survival rates for new business establishments · Commerce Institute — business survival rates by industry, compiled from BLS BED data · LendingTree — analysis of BLS first-year closure rates (March 2024 to March 2025 cohort)