STARTUP STATISTICS

The Numbers You Need to Know

Published by Matt Mansfield for Startup Magazine on 28 March 2019

Each year, thousands of ambitious entrepreneurs start new businesses. These entrepreneurs feel bright and full of hope. And plenty of small business statistics show that by the end of four years more than half of them will be gone.
Small business failure rate aside, many small businesses make it past that critical period and thrive. How many make it and what industries fare best? We’ve collected these startup statistics for small businesses from a variety of sources to answer those questions.
STARTUP FAILURE RATE STATISTICS
82% of successful business owners did not doubt they had the right qualifications and proper experience to run a company.

Of all small businesses started in 2014:

⦁ 80 percent made it to the second year (2015);
⦁ 70 percent made it to the third year (2016);
⦁ 62 percent made it to the fourth year (2017);
⦁ 56 percent made it to the fifth year (2018).

Given those numbers, a bit more than half of all startups actually survives to their fourth year, while the startup failure rate at four years is about 44 percent.

Top 10 causes of small business failure:
⦁ No market need: 42 percent;
⦁ Ran out of cash (lack of sales): 29 percent;
⦁ Not the right team: 23 percent;
⦁ Got outcompeted: 19 percent;
⦁ Pricing / Cost issues: 18 percent;
⦁ User un-friendly product: 17 percent;
⦁ Product without a business model: 17 percent;
⦁ Poor marketing: 14 percent;
⦁ Ignore customers: 14 percent;
⦁ Product mis-timed: 13 percent.