New Business Success Rates: Do They Reflect Your Chances?

Bring Success factor to your Business

Starting your own business is a dream that many Americans have. The feeling of creating something from scratch with hard work and enthusiasm is a great achievement.

But many companies fail within the first four years.

While small businesses account for over half of all sales in the United States, which means there is plenty of opportunities, many companies are doomed from the start. Sometimes, this is because of the lack of experience or planning by the founders, but it also can be because they chose the wrong type of business. Here are some of the facts about new business success rates:

What Businesses are Best?

If you have a great business plan that you truly believe in, then you should go with it no matter which field it’s in. However, you should be aware that some company types do better than others.

After four years of business, companies in the Finance Insurance and Real Estate sectors do the absolute best, with 58% still operating. Education and Health, Agricultural and Service-oriented companies do well also, with over a 50% success rate after four years.

These should come as no surprise, as they are traditional businesses that have proven to be effective over the years. While you still have a lot of work to do on your own, a startup in any of these fields is a good way to build a future.

What Businesses are Worst?

You’ve surely heard stories about Tech startups being sold for millions — or even billions! — of dollars after just a few short years of operating. Unfortunately, this type of company also has the highest failure rate.

Just 38% of all tech startups are still operating after four years. This is mainly because of the glut of startups out there, chasing the dream of striking it rich. With so much competition, only the very best will survive.

Other troubled startup industries include local trucking companies, security brokers, and restaurants. Each one of these businesses presents a unique set of challenges that are difficult to overcome, including competition and a lack of customers.

What Causes a Business to Fail?

There are several reasons why a startup can fail, but the biggest reason is you.

Incompetence is rated the number one reason why a business closes within four years. This isn’t an insult, but a reflection of people not preparing for all of the possibilities: tax considerations, lack of experience in record keeping and financing as well as emotional pricing.

If your startup fails, you need to know how to exit without ruining your financial future. Websites like can help the transition of closing a business so that everything important is taken care of.

But don’t let the threat of failure stop you from starting a business. There are plenty of opportunities out there for new companies, and if you plan correctly, do your research and find the right sector to enter, then you will have given yourself the greatest chance to succeed.

Joel Carey has worked as a financial analyzer for quite some time now and enjoys his week. So much so, that he writes articles in his spare time on this subject, his work appearing on news and business blogs.

Scroll to Top