444 published data
Each of us would like to think that we have the ability to succeed in business
and that there is some probability of success backing us up. But statistics and
probability do not help the individual in their endeavour. They are merely scores
on some distant board that satisfy our need to look back an ponder.
The following is a rendering down of different pieces of information from different
sites that will help to make some sense of a very complex situation. You should
read this data with a sense of healthy scepticism. There exists no single party
who has undertaken comprehensive research. So the information is a series of snippets
rather than a complete analysis. The figures are built on extracts and assumptions
Startup Failure Rates Numbers
Of all small businesses started:
- 82 percent made it to the second year
- 68 percent made it to the third year
- 61 percent made it to the fourth year
- 57 percent made it to the fifth year
Therefore, a bit more than half of all start-ups actually survive to their fourth year, while the start-up failure rate at four years is about 14 percent.
Top Causes of small business failure:
- No real market need: 42 percent;
- Ran out of cash: 29 percent;
- Incorrect team: 23 percent;
- Better competitors: 19 percent;
- Cost/Price of product: 18 percent;
- User un-friendly product: 17 percent;
- No sound business model: 17 percent;
- Poor marketing: 14 percent;
- Ignored customers: 14 percent; and
- Product mistimed: 13 percent.
Industries With The Worst Startup Results
It appears that the least profitable industries by profit margin are:
- Hospitality;
- Construction;
- Beverage/Drinks;
- Hairdressing;
- Dairies;
- Farm Food Products;
- Grocery Stores;
- Bakeries;
Most Small Business
The industries with the top number of small business start-ups are:
- Food/Restaurant: 19 percent;
- Business services: 11 percent;
- Health/Beauty/Fitness: 10 percent;
- General retail: 7 percent;
- Home services: 6 percent.
Industries With The Best Startup Statistics
The 10 most profitable small business industries by profit margin are:
- Accounting, Bookkeeping, and Payroll Services;
- Creative Arts/Film;
- Software;
- Legal Services;
- Real Estate;
- Financial Advisors;
- Dentists;
- Medical;
General Startup Statistics
- 69 percent of entrepreneurs start their businesses at home;
- sole proprietorships (21 percent);
- the majority of small businesses were Limited Liability (66 percent);
- partnerships (12 percent);
The Most Popular Small Business Funding Methods
- Personal funds 77 percent;
- Bank loan 34 percent;
- Borrowing from family/friends 16 percent;
- Other funding 11 percent;
- Donations from family/friends 9 percent;
- Online lender 4 percent;
- Angel investor 3 percent;
- Venture capital 3 percent;
- Crowdfunding 2 percent.
Small Business Owner Statistics
When asked, “What’s the best way to learn more about entrepreneurship?” most people responded with “Start a company”.
Who’s starting small businesses today? Here’s a look at small business owners:
Gender:
- 73 percent identify as male; and
- 25 percent identify as female.
- 50-59 years old: 35 percent;
- 40-49 years old: 25 percent;
- 60-69 years old: 18 percent;
- 30-39 years old: 14 percent;
- 18-29 years old: 4 percent; and
- 70+ years old: 4 percent.
- High School: 41 percent;
- Diploma/ Part Degree: 24 percent;
- Bachelor’s Degree: 19 percent;
- Master’s Degree: 14 percent; and
- Doctorate: 2 percent.
- Ready to be his/her own boss: 28 percent;
- Wanted to pursue his/her passion: 23 percent;
- The opportunity presented itself: 17 percent;
- Dissatisfied with corporate employer: 12 percent;
- Laid off or outsourced: 6 percent;
- Not ready to retire: 6 percent;
- Other: 5 percent;
- Life event such as divorce, death, etc.: 3 percent.