Will it Last?

Last Updated: June 8, 2017

We've all heard the bad news: not every small business will succeed. If you listen to various news sources you've probably heard a number of discouraging statistics regarding the long term viability of small business operations. Ever wonder why?

 "...only 2/3 of all small business startups survive the first two years..."
                                 "...and less than half of those remaining make it to four years"
                "95% of all startups fail before their fifth year"
         "30% don't make it past the first year..."
                                  "Only 1 in 25 businesses will last over 25 years"

               Source: A combination of fear, threats and anecdotal evidence - I made up the last one.

If you've gone into business for yourself, you've probably already been told by friends, family and strangers alike that "you'll be lucky if you make it through the first year!".

Not representative of most business owners experience

Before believing the hype (and letting self-fulfilling prophecy take place...), it's important to remember a few things about small business in general, and why we hear so much about the challenge of staying in business:

  • Failure is usually not the right word. If you work for your employer for 3 years and then decide to quit for family reasons, or new career opportunties, would you call it failure? Probably not. But for the business owner who decides after 3 years in business to close her shop to go back to school to become an architect, the lable failure would usually be given, and she would be added to the statistics. Knowing when it's time to move on is not always easy - but sometimes it can be for the best.
  • The numbers are rarely given on an industry-specific level. Businesses where barriers to entry and startup costs are low (an online ebay retailer, for example) are likely to see higher turnover than industries where specific knowledge, skills or infrastructure are required (dentists, plumbers or breweries, for example).
  • Not all businesses are designed to last! Many business owners, looking to capitalize on the latest trends or fads will open new businesses to take advantage of the current business environment for their product or service. Such businesses might be very profitable for a few years, but when the trend passes.....

Don't make the mistake of confusing 'business closing' with 'business failure'. There are many good reasons why (for many owners) their small business doesn't last forever.

  • Sale of business
  • Starting a new business to replace the old one
  • Time and family commitments
  • Operating a side-business while keeping a full time position elsewhere becomes unmanageable
  • Returning to the 'employed' work force
  • Moving

...the list could go on - and every business owner who has made such a decision likely has a reason of their own. Remember - very few of the business failures we hear about actually involve the dreaded B-word (starts with bank - ends with tcy). To protect yourself, try checking out a few of the articles below about 'why startups fail' - there may even be a few tips or hints you can use for yourself to help you stay in business for as long as you want to stay in business.

Why the small business failure rate is 90% smoke and mirrors
The top 7 reasons why small business fail
Dubunking the myth that most startups crash and burn
The restraunt failure myth
From startup to success story

As always, browsing a few books on the topic of 'Startup Success' is a good way to keep your confidence high:


Stack, J., Burlingham, B., & ebrary, Inc. (2003). A stake in the outcome: Building a culture of ownership for the long-term success of your business. New York: Doubleday.



Keough, D. R. (2008). The ten commandments for business failure. New York: Portfolio.



Bate, N. (2009). Beat the recession: A blueprint for business survival. Oxford: Infinite Ideas.



PHOTO CREDIT: Photo Dinosaur on the Sun created by Rusty Russ on July 4, 2010, available under a Creative Commons Attribution license. Last viewed on Nov 9, 2010.

PHOTO CREDIT: Photo Failure to Read created by massdistraction on June 12, 2005, available under a Creative Commons Attribution license. Last viewed on Nov 9, 2010.