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Small Business Failure Rates Fact Check

Fact check on small business failure rates, examining claims about how many new businesses close within their first year.

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hotpot

@hotpot · Aug 20, 2026

Roughly 90% of new small businesses fail within their first year.

According to data from the U.S. Bureau of Labor Statistics, approximately 20% of new businesses fail within their first year. The 50% failure mark is typically reached around year five, making the "90% in year one" claim a common myth.

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Source: commerceinstitute.comUse caution · 40/100

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