Small Business Failure Statistics
Last updated: June 2026 · 6 sourced statistics
The survival curve for new businesses is well documented and remarkably stable across decades: roughly one in five fails within a year, about half are gone by year five, and two-thirds by year ten. The leading proximate cause is almost always the same — running out of cash. Sources: BLS Business Employment Dynamics, CB Insights, and U.S. Bank research.
Key takeaways
- About 1 in 5 new businesses fails within the first year (BLS).
- Roughly half of new businesses close within five years.
- 82% of business failures involve cash flow problems (U.S. Bank study).
At a glance
Every figure on this page in one table, each linked to its named source. Scroll down for the full context behind each number.
| Figure | What it measures | Source | Year |
|---|---|---|---|
| ~22% | Around 22% of new US private-sector businesses fail within their first year, per BLS Business Employment Dynamics data. | US Bureau of Labor Statistics (Business Employment Dynamics) | 2024 |
| ~50% | Roughly half of new businesses close within five years — the five-year survival rate hovers near 50% across decades of BLS data. | US Bureau of Labor Statistics | 2024 |
| ~65% | About two-thirds of new businesses are gone within ten years (BLS). | US Bureau of Labor Statistics | 2024 |
| 82% | 82% of business failures involve cash flow problems, per a widely cited U.S. Bank study. | U.S. Bank study (via SCORE) | 2019 |
| 38% | 'Ran out of cash / failed to raise new capital' is the most commonly cited startup failure reason in CB Insights' post-mortem analysis, appearing in 38% of cases. | CB Insights, Top Reasons Startups Fail | 2021 |
| 50,000 | An estimated 50,000 UK businesses close each year specifically due to late payments (Federation of Small Businesses). | Federation of Small Businesses (UK) | 2023 |
The statistics
Around 22% of new US private-sector businesses fail within their first year, per BLS Business Employment Dynamics data.
Source:US Bureau of Labor Statistics (Business Employment Dynamics)2024
Roughly half of new businesses close within five years — the five-year survival rate hovers near 50% across decades of BLS data.
Source:US Bureau of Labor Statistics2024
About two-thirds of new businesses are gone within ten years (BLS).
Source:US Bureau of Labor Statistics2024
82% of business failures involve cash flow problems, per a widely cited U.S. Bank study.
Source:U.S. Bank study (via SCORE)2019
'Ran out of cash / failed to raise new capital' is the most commonly cited startup failure reason in CB Insights' post-mortem analysis, appearing in 38% of cases.
Source:CB Insights, Top Reasons Startups Fail2021
An estimated 50,000 UK businesses close each year specifically due to late payments (Federation of Small Businesses).
Source:Federation of Small Businesses (UK)2023
When these numbers don't apply
Aggregate statistics hide a lot. Read these caveats before quoting a figure as if it describes your specific situation.
- Survival rates are economy-wide averages — industry and the timing of the business's birth (recession vs recovery) shift them several points.
- The 82% cash-flow figure is from an older U.S. Bank study widely cited via SCORE; treat it as directional.
- 'Failure' in BLS data means the establishment closed, which includes voluntary and successful exits, not only insolvency.
How we compiled this data
Compiled June 2026 from BLS Business Employment Dynamics survival tables, CB Insights startup post-mortems, U.S. Bank research as published by SCORE, and FSB campaign data. Survival rates are economy-wide averages — industry and cohort timing shift them several points.
We hand-collected each figure from its original publisher rather than recycling secondary round-ups, cross-checked the headline numbers against the source documents in June 2026, and link every statistic to the report it came from so you can verify it yourself. Where a publisher issues annual updates, we cite the report edition and flag the year inline.
Frequently asked questions
What percentage of small businesses fail?
About 22% in year one, ~50% by year five, and ~65% by year ten (BLS) — figures that have been remarkably stable for decades.
What's the number one reason businesses fail?
Cash flow. The U.S. Bank study found 82% of failures involve cash flow problems, and CB Insights ranks 'ran out of cash' as the top startup killer.
Do late payments really kill businesses?
Yes — the FSB estimates 50,000 UK business closures annually from late payment alone. Profitable businesses fail when receivables don't convert to cash in time.
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