Official US statistics show that roughly four in five newly opened business locations are still operating a year later, about half after five years and about a third after ten. This article explains where those numbers come from, what they do and do not measure, and how founders can use them for planning rather than worry.
What does the survival data actually count?
The figures come from the Business Employment Dynamics program of the US Bureau of Labor Statistics (BLS), which tracks job gains and losses at private-sector workplaces. Its basic unit is the establishment: a single physical location where work is done, such as a shop, an office or a factory. A company with three shops counts as three establishments.
The BLS describes an opening as an establishment that reports positive employment for the first time, or returns after a quarter of zero employment. A closing is an establishment that had employees in the previous quarter and reports none in the current one. Records can be linked across quarters when a business changes hands or is renamed, so a simple change of ownership is generally treated as continuity rather than an end. Because the measure rests on employment, a venture that never has employees is unlikely to appear in it.
Two consequences follow. First, “survival” here means “still reporting employees,” not “still profitable” or “still owned by the founder.” Second, a closing is not the same as a failure. An owner may retire, merge, sell the customer list or simply decide to stop, and the data cannot tell these apart.
How many new businesses are still operating after one, five and ten years?
According to BLS data published as of October 2026, a cohort of establishments that opened in the year ended March 2014 followed this path:
| Years after opening | Share still operating | Share of previous year’s survivors still operating |
|---|---|---|
| 1 (March 2015) | 79.7% | 79.7% |
| 2 | 69.3% | 86.9% |
| 3 | 61.8% | 89.3% |
| 4 | 55.8% | 90.3% |
| 5 (March 2019) | 50.8% | 91.0% |
| 6 | 46.5% | 91.5% |
| 7 | 43.2% | 92.9% |
| 8 | 40.7% | 94.3% |
| 9 | 37.7% | 92.6% |
| 10 (March 2024) | 34.9% | 92.6% |
| 11 (March 2025) | 32.7% | 93.6% |
The right-hand column is the more revealing one. In the first year, about one in five locations closes. By the fifth year, the annual loss among survivors has fallen to roughly 9%, and in later years it stays between roughly 6% and 8%. Businesses do not face a constant risk each year; the risk is front-loaded.
The cohort that opened in the year ended March 2013 shows almost the same shape: 79.6% after one year, 50.6% after five (March 2018) and 32.4% after eleven (March 2024), then 30.4% a year later. When two neighboring cohorts agree this closely, the pattern looks stable rather than a one-off.
A worked example: 1,000 new locations
Percentages are easier to feel when applied to a round number. Take 1,000 establishments opening in the same year and apply the 2014 cohort rates from the table:
- After one year: 797 still operating, so 203 have closed.
- After five years: 508 still operating, so 492 have closed in total.
- After ten years: 349 still operating.
Notice what happens between years five and ten. The group shrinks from 508 to 349, a loss of 159 locations, or about 31% of the five-year survivors (349 divided by 508 is roughly 0.69). That is a substantial attrition, yet far gentler than the 49% lost in the first five years. A business that reaches year five has already passed the steepest part of the curve, though it is not safe.
Why are the early years so hard?
The statistics describe what happens, not why, so any explanation is interpretation. Several well-understood business dynamics fit the shape of the curve, and they are worth testing against your own plan.
- Unproven demand. A new offer may not find enough paying customers. The questions in what product-market fit really means are aimed at this risk.
- Thin cash. Early revenue often arrives later than costs. Growing sales can still drain the bank account, a trap covered in cash flow versus profit.
- Learning costs. Pricing, hiring and operations are done for the first time. Mistakes are cheap only when they are caught early.
- Fragile models. If a business depends on one customer, one supplier or one channel, a single shock can end it. What makes a business model durable looks at the traits that reduce that exposure.
As a business accumulates customers, routines and cash reserves, each of these risks tends to shrink, which is consistent with the improving year-on-year survival rates in the table.
Does the latest cohort look different?
The BLS also publishes the cohort that opened in the year ended March 2019, which lets readers compare an older generation of businesses with one that lived through the pandemic years:
| Years after opening | Share still operating |
|---|---|
| 1 (March 2020) | 79.2% |
| 2 | 70.2% |
| 3 | 64.0% |
| 4 | 56.7% |
| 5 (March 2024) | 51.5% |
| 6 (March 2025) | 46.8% |
Compare year six with the 2014 cohort, which stood at 46.5% at the same age. The two figures differ by 0.3 percentage points. Despite a very different economic backdrop, the curve landed almost in the same place. The data does not show whether any individual business was helped or harmed by particular events; it only shows the aggregate outcome.
What can survival rates not tell a founder?
Averages across the whole private sector hide enormous variation. The table above covers every industry and every size of new location together. A restaurant, a software consultancy and a manufacturing plant face different cost structures and different odds, and national figures cannot say which group yours resembles.
Survival data also says nothing about quality of outcome. A business that stays open for ten years while paying its owner very little counts as a survivor. A founder who closes a venture after two years to start a better one counts as a closing. Neither label tells you whether the decision was good.
Finally, the numbers describe locations that already opened with employees. People who researched a market, concluded it was weak and never launched are invisible, as are solo operators who never hired. The statistics describe a particular slice of entrepreneurship, not all of it.
How can founders use these numbers in planning?
Used carefully, base rates are a planning tool. Some practical ways to apply them:
- Plan for the first twelve months as the riskiest period. Build a cash cushion that covers a slow start, and set explicit checkpoints, such as the number of repeat customers you need by month six.
- Decide your stopping rules early. Knowing in advance which results would make you adjust or stop prevents drift, and it makes a deliberate closure a planned decision instead of a crisis.
- Test the model, not just the idea. Ask what happens if your biggest customer leaves or your main supplier raises prices.
- Match funding to the stage. The sequence in startup funding stages explained shows how different sources of money fit different levels of proof.
- Keep perspective on year five. Reaching it is a meaningful milestone, but in the table, roughly 6% to 9% of surviving locations still closed in each following year.
Reading the odds without being ruled by them
The BLS figures give founders an honest anchor: most new locations do not last a decade, and the steepest losses come early. They also show that the odds improve with age, and that the pattern has been steady across cohorts opened years apart. The statistics are an average of many different businesses, so the more useful question is not “what are the odds?” but “which of the common risks does my plan address, and which does it ignore?”
This article provides general information only and is not financial, investment, tax or legal advice.
Sources: US Bureau of Labor Statistics
