- Data sourced from the U.S. Bureau of Labor Statistics (U.S. BLS), this chart shows the surviving establishments based on annual openings from 1994 to 2021, which you may filter the chart by different opening year, and view the number of surviving establishments of the targeted opening year by hovering your mouse over the bars.
- From the selected opening year, the survival rate of private sector establishments is indicated at 100% (number of surviving establishments) because a new dataset is observed and visualized from the selected opening year up to the latest opening year.
- Importantly, the age and survival data of this dataset are measured at the establishment level (not at the firm level), where U.S. BLS used the "date of first positive employment", the year and quarter in which a business reports positive employment for the first time, as the birth date.
- According to U.S. BLS, “an establishment is a single physical location where one predominant activity occurs, such as a firm is an establishment or a combination of establishments”. Therefore, a private establishment refers to a company, firm, cooperative or other society, associations, trust, agency, institutions, organization, union, factory or such other establishments that are privately owned.
Over 85% of companies worldwide won't survive up to 10 years.
In the USA alone, over 700,000 companies shut down every year. In 2019, prior to the pandemic, 928,000 out of the 1.04 million newly established companies shut down (U.S. Small Business Administration, 2021).
Evidently, the business shutdown rate is staggeringly high.
This is why Paul co-founded roiquant (rói - kwänt) to help founders reduce risk of business failure.
In helping founders build strong competitive business with high ROI (return on investment), roiquant empowers founders to analyze the capital markets, competitive landscape, companies performance, business strategies, risk factors, and more, for actionable insights.
BUSINESS FAILURE RATE
If failure is referred as failing to see the projected return on investment, then the failure rate is 70% to 80%. However, if failure is defined as declaring a projection and then falling short of meeting it, then the failure rate is a whopping 90% to 95%.
WHY ROIQUANT?
Most business studies and entrepreneurial research seem to have a natural tendency to focus on success stories (Madsen & Desai, 2010), and less on failure stories which may result in a survivorship bias that can lead to over-stating or understating the predictability of events (Brown et. al., 1992).
Based on the data gathered by the Global Entrepreneurship Monitor (GEM), researcher Moya K. Mason (2012) estimated that nearly 100 million new businesses are created each year worldwide. However, about 30 to 50 million companies stand a chance to survive within 1 to 5 years of operation.
When you want to build a business with strong competitive edge, but don’t have the right knowledge and affordable tools, our affordable startup intelligence is powered by proprietary intelligent quant systems to help you make prudent strategies, innovate creatively, fundraise strategically, and reduce costly mistakes.
We understand that you value insightful data and intelligent tools. Unlike our competitors, our solutions empower you to validate the market at minimal cost, so you can make data-informed decisions to improve and innovate your business.
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OUR VISION
Empowering founders to innovate.
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A failure is a man who blundered, but is not able to cash in on the experience. (Elbert G. Hubbard)
