The Bureau of Labor Statistics tracks every new employer business. The pattern has been remarkably stable for decades — roughly one in five fails within a year and about half are gone by year five.
Key small business facts
| Metric | Figure |
|---|---|
| U.S. small businesses | ~33 million (SBA, 2023) |
| Share of all U.S. firms | 99.9% |
| Share of private employment | ~46% |
| Share of net new jobs (last 25 yrs) | ~63% |
| New business applications 2023 | ~5.5 million (record) |
What it means
“Failure” includes voluntary closure — not every ending is a bankruptcy. The leading causes cited in studies: no market need, running out of cash, and pricing/cost problems — all visible in advance with basic break-even and runway math.
FAQ
What percentage of small businesses fail in the first year?
About 20% of new employer businesses close within one year (BLS averages).
What share survive 5 years?
Roughly half — a figure stable across decades and most industries.
What is the #1 reason businesses fail?
Studies consistently point to lack of market need and cash-flow problems ahead of competition or team issues.
Sources
- U.S. Bureau of Labor Statistics, Business Employment Dynamics
- SBA Office of Advocacy, 2023
Figures compiled and rounded July 2026. Cite this page: “Small Business Statistics: Survival Rates & Facts, CalcYard” with a link.