By Aijaz Alam
What percentage of new businesses fail?
52.8% of new US private-sector business establishments close within five years: of those that opened in the year to March 2021, 47.2% were still open in March 2026, according to BLS Business Employment Dynamics data updated 28 October 2026. In the first year, 21.1% close; 34.2% of establishments opened in 2016 reached ten years.
- 78.9%New establishments still open after one year (opened in the year to March 2025)BLS BED, to March 2026
- 47.2%Still open after five years (opened in the year to March 2021)BLS BED, to March 2026
- 34.2%Still open after ten years (opened in the year to March 2016)BLS BED, to March 2026
- 49.2%Average five-year survival rate, 1994 to 2022SBA Office of Advocacy FAQ, Feb 2026, from BLS BED
The numbers
The full breakdown
New US establishments still open in March 2026, by years since opening
| Years open | Opened in the year to | Still open in March 2026 | Survival rate |
|---|---|---|---|
| 1 year | Mar 2025 | 770,720 | 78.9% |
| 2 years | Mar 2024 | 658,624 | 66.6% |
| 3 years | Mar 2023 | 605,976 | 57.8% |
| 4 years | Mar 2022 | 534,052 | 50.1% |
| 5 years | Mar 2021 | 396,316 | 47.2% |
| 10 years | Mar 2016 | 250,661 | 34.2% |
| 15 years | Mar 2011 | 147,902 | 25.4% |
| 20 years | Mar 2006 | 132,860 | 18.6% |
| 32 years | Mar 1994 | 68,378 | 12.0% |
BLS Business Employment Dynamics, Table 7 (Total private), last modified 28 Oct 2026. Each row is a different opening-year group read in March 2026, so the rows come from different starting conditions; the 2020 cohort table below follows one group over time.
One group followed over time: establishments opened in the year to March 2020
| March of | Still open | Survival rate since opening |
|---|---|---|
| 2020 (opening year) | 767,573 | 100% |
| 2021 | 621,249 | 80.9% |
| 2022 | 554,747 | 72.3% |
| 2023 | 488,169 | 63.6% |
| 2024 | 439,219 | 57.2% |
| 2025 | 394,020 | 51.3% |
| 2026 | 359,524 | 46.8% |
BLS BED Table 7, edition of 28 Oct 2026. The edition we read on 23 Oct 2026 showed 394,689 survivors (51.4%) for March 2025; BLS revises earlier years with each release.
Survival of new US establishments by industry, as of March 2026
| Industry | After 1 year (opened by Mar 2025) | After 5 years (opened by Mar 2021) | After 10 years (opened by Mar 2016) |
|---|---|---|---|
| Agriculture, forestry, fishing and hunting | 85.4% | 59.4% | 51.2% |
| Mining, quarrying, and oil and gas extraction | 79.4% | 47.7% | 27.4% |
| Utilities | 76.7% | 50.3% | 44.1% |
| Construction | 79.2% | 52.8% | 41.7% |
| Manufacturing | 79.8% | 53.0% | 44.4% |
| Wholesale trade | 77.7% | 47.6% | 34.6% |
| Retail trade | 84.5% | 55.2% | 43.5% |
| Transportation and warehousing | 77.3% | 44.2% | 35.4% |
| Information | 73.3% | 41.4% | 30.5% |
| Finance and insurance | 79.4% | 48.9% | 38.5% |
| Real estate and rental and leasing | 80.9% | 52.4% | 44.5% |
| Professional, scientific, and technical services | 74.7% | 44.7% | 34.4% |
| Management of companies and enterprises | 77.7% | 48.3% | 35.2% |
| Administrative and waste services | 75.8% | 46.4% | 36.0% |
| Educational services | 79.6% | 49.0% | 43.4% |
| Health care and social assistance | 83.3% | 52.1% | 35.8% |
| Arts, entertainment, and recreation | 80.9% | 52.7% | 41.6% |
| Accommodation and food services | 85.3% | 56.3% | 42.9% |
| Other services (except public administration) | 82.4% | 55.4% | 42.6% |
| All private industries | 78.9% | 47.2% | 34.2% |
BLS BED Table 7, one file per NAICS sector, last modified 28 Oct 2026. Mining, utilities and agriculture have few openings (1,318 to 6,051 in the year to March 2021), so their rates move more from year to year.
Survival of new establishments in each state and DC, as of March 2026
| State | After 1 year (opened by Mar 2025) | After 5 years (opened by Mar 2021) | After 10 years (opened by Mar 2016) |
|---|---|---|---|
| Alabama | 81.9% | 50.1% | 36.6% |
| Alaska | 74.4% | 46.3% | 37.2% |
| Arizona | 73.5% | 44.8% | 33.5% |
| Arkansas | 76.3% | 46.8% | 31.3% |
| California | 83.9% | 51.5% | 34.1% |
| Colorado | 78.0% | 43.3% | 32.3% |
| Connecticut | 79.0% | 45.5% | 30.9% |
| Delaware | 76.9% | 45.9% | 30.6% |
| District of Columbia | 71.8% | 37.0% | 28.5% |
| Florida | 80.2% | 45.2% | 33.3% |
| Georgia | 74.3% | 43.1% | 31.4% |
| Hawaii | 76.9% | 49.0% | 36.2% |
| Idaho | 78.0% | 43.1% | 34.9% |
| Illinois | 80.4% | 49.6% | 37.0% |
| Indiana | 79.4% | 50.6% | 38.2% |
| Iowa | 79.2% | 48.9% | 36.5% |
| Kansas | 72.8% | 44.2% | 27.2% |
| Kentucky | 79.2% | 49.7% | 38.7% |
| Louisiana | 79.2% | 47.7% | 37.0% |
| Maine | 76.9% | 46.9% | 37.8% |
| Maryland | 79.2% | 44.2% | 32.3% |
| Massachusetts | 78.4% | 48.4% | 36.1% |
| Michigan | 79.5% | 51.3% | 38.1% |
| Minnesota | 77.8% | 51.2% | 41.0% |
| Mississippi | 78.9% | 48.2% | 35.0% |
| Missouri | 73.9% | 39.9% | 28.6% |
| Montana | 77.4% | 47.6% | 40.7% |
| Nebraska | 77.4% | 48.2% | 34.9% |
| Nevada | 78.7% | 43.2% | 33.2% |
| New Hampshire | 74.9% | 42.7% | 31.1% |
| New Jersey | 80.3% | 46.8% | 34.0% |
| New Mexico | 78.2% | 42.0% | 31.1% |
| New York | 72.9% | 45.9% | 31.9% |
| North Carolina | 78.6% | 49.4% | 35.8% |
| North Dakota | 78.0% | 47.4% | 38.0% |
| Ohio | 79.1% | 50.0% | 36.5% |
| Oklahoma | 78.9% | 46.1% | 34.5% |
| Oregon | 74.6% | 43.6% | 36.9% |
| Pennsylvania | 79.3% | 50.7% | 37.0% |
| Rhode Island | 75.4% | 41.4% | 31.7% |
| South Carolina | 67.8% | 49.5% | 35.2% |
| South Dakota | 80.6% | 48.8% | 41.6% |
| Tennessee | 76.3% | 43.1% | 34.1% |
| Texas | 79.9% | 48.6% | 35.5% |
| Utah | 77.2% | 43.4% | 34.1% |
| Vermont | 78.4% | 44.8% | 34.4% |
| Virginia | 77.9% | 45.6% | 33.6% |
| Washington | 82.6% | 40.9% | 27.6% |
| West Virginia | 72.0% | 53.4% | 39.1% |
| Wisconsin | 77.5% | 47.4% | 35.6% |
| Wyoming | 76.0% | 42.9% | 33.5% |
BLS BED Table 7, one file per state (Total private), last modified 28 Oct 2026. Puerto Rico and the US Virgin Islands also have files and are left out. Small states have few openings, so their rates move more from year to year.
Over time
First-year and five-year survival of every group of new US establishments since 1994
| Opened in the year to | New establishments | Still open after 1 year | Still open after 5 years |
|---|---|---|---|
| Mar 1994 | 569,387 | 79.6% | 49.6% |
| Mar 1995 | 604,381 | 78.8% | 48.8% |
| Mar 1996 | 609,571 | 78.2% | 48.1% |
| Mar 1997 | 639,071 | 78.5% | 47.6% |
| Mar 1998 | 642,965 | 80.1% | 48.1% |
| Mar 1999 | 650,661 | 79.1% | 48.2% |
| Mar 2000 | 674,530 | 78.4% | 48.2% |
| Mar 2001 | 671,299 | 75.7% | 48.1% |
| Mar 2002 | 659,111 | 78.3% | 50.1% |
| Mar 2003 | 662,416 | 79.3% | 49.9% |
| Mar 2004 | 653,766 | 78.9% | 48.4% |
| Mar 2005 | 679,797 | 80.1% | 46.8% |
| Mar 2006 | 715,597 | 78.3% | 45.4% |
| Mar 2007 | 703,704 | 77.3% | 46.4% |
| Mar 2008 | 677,939 | 75.2% | 47.8% |
| Mar 2009 | 608,547 | 76.7% | 50.1% |
| Mar 2010 | 560,391 | 78.6% | 51.1% |
| Mar 2011 | 582,349 | 79.4% | 50.9% |
| Mar 2012 | 631,634 | 79.2% | 50.1% |
| Mar 2013 | 628,840 | 79.6% | 50.6% |
| Mar 2014 | 652,518 | 79.7% | 50.8% |
| Mar 2015 | 677,876 | 79.6% | 50.2% |
| Mar 2016 | 732,856 | 79.6% | 50.7% |
| Mar 2017 | 733,286 | 79.1% | 51.6% |
| Mar 2018 | 733,721 | 79.4% | 51.9% |
| Mar 2019 | 770,523 | 79.2% | 51.5% |
| Mar 2020 | 767,573 | 80.9% | 51.3% |
| Mar 2021 | 839,297 | 79.1% | 47.2% |
| Mar 2022 | 1,065,228 | 76.3% | not yet five years |
| Mar 2023 | 1,049,106 | 78.2% | not yet five years |
| Mar 2024 | 988,310 | 77.7% | not yet five years |
| Mar 2025 | 976,437 | 78.9% | not yet five years |
BLS BED Table 7, Total private, edition last modified 28 Oct 2026. That update added March 2026 and revised earlier years: in the edition we read on 23 Oct 2026 the group opened by March 2024 had 77.9% first-year survival (now 77.7%) and the group opened by March 2020 had 51.4% five-year survival (now 51.3%). Our arithmetic: the five-year rate averaged about 49.3% over the 28 groups from 1994 to 2021, between 45.4% and 51.9%.
Why sources differ
Same question, different answers
| Number | When | Who measured | Why it differs |
|---|---|---|---|
| 49.2% | 1994-2022 average | SBA Office of Advocacy FAQ (Feb 2026), from BLS BED | Average five-year survival over many opening years, not the latest group |
| 67.7% / 33.9% / 25.5% | 1994-2022 average | SBA Office of Advocacy FAQ (Feb 2026) | Average survival after two, ten and fifteen years |
| 51.3% | Opened by Mar 2020, read in Mar 2025 | BLS BED | An earlier group, opened just before the pandemic; 51.4% in the edition before the 28 Oct 2026 update |
| 1.3M opened, 1.2M closed | 2023 | SBA Office of Advocacy FAQ, from BLS BED | Openings and closings in one year, not how long one group lasts |
| 5.67M | 2025 | Census Business Formation Statistics | Applications to start a business (our sum of monthly counts); most never hire anyone, so they are not in the BLS survival data |
Most survival figures come from the same BLS data, so the differences are about which group and which edition. BLS follows each group of establishments that opened in a 12-month period ending in March. The latest five-year figure, 47.2%, is for the group that opened in the year to March 2021. The SBA's 49.2% is the average over many groups from 1994 to 2022, and older articles quote about 50% from earlier groups, which were close to it.
The five-year rate for the 2021 group is the lowest since the group that opened in the year to March 2007. The 2007 group lived through the 2008-2009 recession. The 2021 group was also the largest to open up to that point, 839,297 establishments, against at most 770,523 in any earlier year.
The figures count establishments, meaning business locations with paid employees, not firms. A closed location of a chain counts as a closure, and a one-person business with no payroll is not counted at all. Closing is also not the same as failing: an owner may sell, merge or retire. Census counts of business applications measure intentions to start, so they cannot be compared with survival rates.
What it means
How to use these numbers
About half of new businesses with employees are gone within five years, and one in five closes in the first year. After that the risk falls: of the group that opened in 2016, 34.2% were still open after ten years, and the SBA finds that about 70% of businesses that reach five years also reach ten.
The first two years are the hardest. In the latest data, survival drops from 78.9% after one year to 66.6% after two.
Industry matters less than many people assume. Accommodation and food services, the sector of restaurants and bars often called the riskiest, had one of the highest first-year rates in the latest data (85.3%), and information firms one of the lowest (73.3%). Five-year rates by state range from 37.0% in DC to 53.4% in West Virginia.
For a founder, plan cash for at least two years, not one. For journalists, give the group and the data edition: "47.2% of establishments opened in the year to March 2021 were open in March 2026 (BLS)".
Method and sources
How it was measured
Method
- Publisher
- US Bureau of Labor Statistics, Business Employment Dynamics (BED), Establishment Age and Survival, Table 7
- Sample
- Not a survey: every private-sector establishment covered by state unemployment insurance records, about 977,000 new ones in the year to March 2025
- Definition
- An establishment is a single business location with paid employees. A group (cohort) is every establishment that first appeared in a 12-month period ending in March; survival is the share still in operation each later March
- Not covered
- Businesses with no employees, so most one-person firms and freelancers; the self-employed; government
- Checked at source
- 31 Oct 2026, bls.gov/bdm Table 7 text files for total private, the 19 NAICS sectors and the 50 states and DC (page last modified 28 Oct 2026), and the SBA Advocacy FAQ PDF (Feb 2026)
- Next release
- BLS updates the survival tables once a year, adding the latest March
- Last changed
- 30 Oct 2026
- Data files
- CSV · JSON (stable links)
Sources
- Occupational Outlook Handbook, US Bureau of Labor Statistics Official data
- Frequently Asked Questions About Small Business; Small Business Profiles, US Small Business Administration, Office of Advocacy Official data
- Business Formation Statistics, US Census Bureau Official data
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FAQ
More questions people ask
What percentage of businesses fail in the first year?
21.1% of new US establishments that opened in the year to March 2025 had closed by March 2026; 78.9% survived (BLS). The first-year rate has stayed between 75.2% and 80.9% for every group since 1994.
Which industry has the highest business survival rate?
Agriculture, forestry, fishing and hunting, with 59.4% of the group opened by March 2021 still open after five years. Among large sectors, accommodation and food services (56.3%), other services (55.4%) and retail trade (55.2%) were highest; information was lowest at 41.4%.
Do 90% of startups fail?
Not on official data for businesses with employees. BLS finds 34.2% of establishments opened in the year to March 2016 still open after ten years, so about two in three closed. Venture-backed startups are a much smaller group with their own studies.
Which state has the best business survival rate?
West Virginia had the highest five-year rate in the latest data (53.4%), followed by California (51.5%) and Michigan (51.3%). The District of Columbia was lowest at 37.0%.
Every number on this page was checked at its original source (US Bureau of Labor Statistics, US Small Business Administration, Office of Advocacy, US Census Bureau). Free to cite with a link to this page.