Hacker News new | ask | show | jobs
by jstummbillig 1756 days ago
Are you alleging that most small business efforts fail before they make any profit -- as in +50%? That seems rather unlikely but if anyone has strong numbers on that I'd be very interested.
3 comments

Data from the BLS shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. Only 25% of new businesses make it to 15 years or more.
That strikes me as eminently unsurprising personally. By definition if you fail then you weren't making enough revenue to sustain it. There are two nasty pitfalls which I have heard often snaring them - either paying for tools and other assets when they lack demand or failing when demand saturated due to being unable to scale up correctly.

Revenue and profit are conflated but are not the same thing.

I cannot say the percentages, but my wife has been shocked to hear from business owners who ran their store for over a decade, that they never made a dime. This kind of confession usually only happens after they have given up and closed. I don't know of any trustworthy numbers on it; I would not be surprised if it was far larger than most people believe, but the difference between businesses that "fail" after two years and ones that last for five years or more, is often how stubborn they are or how much money they have from other sources to keep trying. I would not be surprised if it were over 50%, but I know of no source for strong numbers on it.