Written by 
20% of startups fail within the first year
We analyzed a report from the BLS to get a close view of startups in the U.S. over the last 10 years, and figures reveal that around 20% of startups that first opened for business in 2013 went on to fail within their first year. Out of the 628,840 businesses that opened in the year ending March 2013, 500,434 survived by March 2014.¹
39% of startups fail within the first three years
By March 2016, the number of surviving businesses had fallen to 385,941—meaning that 39% of startups in the U.S. failed within their first three years.¹
50% of startups fail within the first five years
The year-on-year rate of failure for startups decreases as businesses stabilize, and BLS figures show that within five years 50% of startups will fail. By March 2018, 318,339 of the 628,840 startups established in the year ending March 2013 had survived.¹
65% of startups fail within the first 10 years
Finally, within 10 years of opening for business, around 65% of U.S. startups will fail—with just 218,499 of the original 628,840 businesses opening in this time period surviving.¹ This demonstrates the long-term challenges that entrepreneurs face, such as sustaining profitability, navigating shifts in the market and industry landscapes, and getting the edge over competitors.
Making it beyond a decade is a significant achievement for any business, typically accomplished through adaptability, refinement and steady revenue. These figures also reflect the importance of strategic planning, as many businesses can fall victim to financial issues, market demand and industry competition.
246,739 startups opened in 2022 failed by 2023 in the United States
The most recent data available from the BLS indicates that almost a quarter of the 1,065,228 startups opened in 2022 across the U.S. failed within a year. However, it’s worth noting that this is the highest number of startups that has ever opened in a single year in the U.S., and the first time the number of new startups has exceeded a million.¹
Around 786,888 new startups are created every year
While the number of new startups established in 2022 was a record for the U.S., the average number of startups established every year for the last 10 years is 786,888. In 2023, 1,054,052 new startups opened for business, once again exceeding the million mark but not quite matching the previous year.¹
First-year startup failure rates have been stable since the 1990s
The failure rate for startups in their first year has been pretty consistent since the 1990s, averaging 20% since 1994, suggesting that the fundamental challenges of starting a new business remain the same despite changes in technology, market conditions and consumer behavior.¹ Entrepreneurs will always face the same issues such as finding the right product, managing cash flow and building a customer base.