The failure rate of small businesses varies depending on the timeframe and source, but generally:
- About 21.5% of small businesses in the U.S. fail within their first year.
- Around 48.4% fail within five years.
- Approximately 65% fail within ten years.
- Up to 90% of startups eventually fail, with around 70% failure rate between years two through five.
- The first year has roughly a 10-21% failure rate depending on the data source.
These statistics highlight that about one in five small businesses fail in their first year, nearly half fail by five years, and nearly two-thirds fail by ten years. The highest failure rates tend to be in the technology and construction industries, while agriculture and related sectors have lower failure rates. Key reasons for failure include cash flow problems, lack of market demand, poor marketing strategies, and lack of product-market fit. This summary represents recent data and trends for 2025 small business failure rates in the U.S.
