| Statistic Verification |
| Source: Entrepreneur Weekly, Small Business Development Center, Bradley Univ, University of Tennessee Research |
| Research Date: 1.1.2014 |
| The reasons are sometimes complicated and not always clear why a certain business fails? Upper management, lack of funding, or just the free market phasing out unwanted items or services. Typically, startups have a casual attitude to promote efficiency in the workplace, often needed to get their business off of the ground. A new trend in failed startups is the purchasing of patents by what are derogatorily known as “Patent trolls”. |
| 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 |
Tags:statistics on startup company failure rates ? what industry has the highest start up failure rate ? what percent of companies go bankrupt in their first year ? start-up company failure rates by industry ? what types of companies businesses fail go out of business bankrupt the most highest ? |
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