Industry | Percent Still Operating After 4 Years |
Finance Insurance and Real Estate | 58 % |
Education and Health | 56 % |
Agriculture | 56 % |
Services | 55 % |
Wholesale | 54 % |
Mining | 51 % |
Manufacturing | 49 % |
Construction | 47 % |
Retail | 47 % |
Transportation, Communication and Utilities | 45 % |
Information | 37 % |
Year | Percent Failed |
Year 1 | 25 % |
Year 2 | 36 % |
Year 3 | 44 % |
Year 4 | 50 % |
Year 5 | 55 % |
Year 6 | 60 % |
Year 7 | 63 % |
Year 8 | 66 % |
Year 9 | 69 % |
Year 10 | 71 % |
Major Cause | Percentage of Failures | Specific Pitfalls | |
1 | Incompetence |
46 %
|
Emotional Pricing |
Living too high for the business | |||
Nonpayment of taxes | |||
No knowledge of pricing | |||
Lack of planning | |||
No knowledge of financing | |||
No experience in record-keeping | |||
2 | Unbalanced Experience or Lack of Managerial Experience |
30 %
|
Poor credit granting practices |
Expansion too rapid | |||
Inadequate borrowing practices | |||
3 | Lack of Experiences in line of goods or services |
11 %
|
Carry inadequate inventory |
No knowledge of suppliers | |||
Wasted advertising budget | |||
5 | Neglect, fraud, disaster |
1 %
|
Leading Management Mistakes | |
1 | Going into business for the wrong reasons |
2 | Advice from family and friends |
3 | Being in the wrong place at the wrong time |
4 | Entrepreneur gets worn-out and/or underestimated the time requirements |
5 | Family pressure on time and money commitments |
6 | Pride |
7 | Lack of market awareness |
8 | The entrepreneure falls in love with the product/business |
9 | Lack of financial responsibility and awareness |
10 | Lack of a clear focus |
11 | Too much money |
12 | Optimistic/Realistic/Pessimistic |
Businesses with Best Rate of Success After Fifth Year | |
1 | Religious Organizations |
2 | Apartment Building Operators |
3 | Vegetable Crop Productions |
4 | Offices & Clinics of Medical Doctors |
5 | Child Day Care Services |
Business with Worst Rate of Success After Fifth Year | |
1 | Plumbing, Heating, Air Conditioning |
2 | Single-Family Housing Construction |
3 | Grocery Stores |
4 | Eating Places |
5 | Security Brokers and Dealers |
6 | Local Trucking |
via http://www.statisticbrain.com/startup-failure-by-industry/