Google Answers Logo
View Question
Q: Statistics on longevity of companies in the U.S. ( Answered 5 out of 5 stars,   1 Comment )
Subject: Statistics on longevity of companies in the U.S.
Category: Business and Money > Economics
Asked by: madged-ga
List Price: $20.00
Posted: 14 Feb 2004 10:43 PST
Expires: 15 Mar 2004 10:43 PST
Question ID: 306779
My company will be celebrating their 25th Anniversary. I am assisting
the CEO with his speech that will be given at this event. He wants to
present some statistics around the percentages of companies in the United
States that last as long as 25 years and beyond. Along the lines of
"Out of XXX companies only XX% of businesses last only 1 - 3 years."
Based on what the statistics show, his intent is to point out the
difficulty of keeping a company going for that length of time and talk
about companies that have been in business for some time. Thank you.
Subject: Re: Statistics on longevity of companies in the U.S.
Answered By: bobbie7-ga on 14 Feb 2004 13:29 PST
Rated:5 out of 5 stars
Hi Madged! 

Below you will find the results of my research about statistics on
longevity of companies in the U.S.


?This paper presents evidence on productivity growth and firm dynamics
for ten OECD countries over the past decade. This paper was published
in the OECD Economic Outlook, No. 69, June 2001, Chapter VII.?
Firm survival rates at different lifetimes
              United States
After 2 years    76%
After 4 years    57%
After 7 years    43%
Business service sector
After 2 years    72%
After 4 years    58%
After 7 years    42%

The survival rate is the probability that an entering firm will survive (j) years. 
Page 14: Figure VII.5. 
Sources: OECD, and Baldwin et al. (2000)

Page 5


Redefining Business Success: Distinguishing Between Closure and
Failure (PDF file) - This paper uses government data sources to
analyze business survival and the success status of closed businesses.
It was published in the August 2003 edition of Small Business
Economics, a journal from Kluwer Online.

?66 percent of new employers survive two years or more, 50 percent
survive four years or more, and 40 percent survive six years or more
These results are strikingly similar to findings from Phillips and
Kirchhoff showing about three-quarters of all businesses surviving two
years or more, or more,  and about 40 percent surviving six years or

New Firm survival rates by data source (percentages)
open after    CBO             CBO                BITS
                    Responding      Non-responding     Employers
                    employers       employers          
                    1992?1996       1992?1996          1989?1998

2 yrs.              95.3            64.1               66.0
4 yrs.              75.4            45.0               49.6
6 yrs.                -               ?                39.5
?The CBO excludes C corporations; BITS figures exclude farms and firms
starting with multi-establishments (a relatively rare occurrence).
BITS survival rates per start year differed by a percent or two.?

?The CBO consists of a firm and owner database. The firm database was
used here except for a few owner variables (previous ownership, age,
education, and reasons for starting). These exceptions were matched to
the firm data and the owner with the greater experience or resources
was used.?

Source: SBA Office of Advocacy


From the IRCC Entrepreneurial Institute:

?The Program Director, Professor Arlene Green says ?Eighty percent of
all new small businesses fail in their first five years because of
inadequate front-end planning.?

?Professor Green is a full time faculty member of IRCC's Department of
Business Administration and Marketing Management. She is the recipient
of the Richardson Endowed Chair in Business and Entrepreneurship
?Golden Medallion Award for Teaching Excellence.?


Race and gender differences in business ownership and business
turnover: an empirical study using a new, unique data series.
Business Economics, Oct, 2002, by Richard J. Boden, Brian Headd

Table 2 may be of your interest.

Here is the direct link to this article. Scroll down to the center of
the page to view the statistics.


?The U.S. Small Business Administration has long stated that 75% of
small businesses fail in their first 5 years and that 50% of the
remainder fail by their 10th year. However, just 25% of franchise
operations fail within their first five years.?



Silicon Valley's Reality Check

?Eight out of 10 new businesses fail in their first five years -- in
any industry, not just high tech.?

This article originally appeared on CBS MarketWatch, June 6, 2001
By Scott McNealy



?According to some estimates, four out of five small businesses fail
in their first five years of operation.?


?In general 80% of all small businesses fail in their first two years,
80% of those that remain in business will not make it past five years.
80% of those who do make it through five years will not make it
through ten years.?
(If this link does not function, just copy and paste it into your browser window.) 


?Dun and Bradstreet surveys show that 60 percent of businesses fail in
their first five years. Our surveys show that 80 percent of the
businesses helped by OHBBA are still going after four years.?

Division of Agricultural Sciences and Natural Resources / Oklahoma State University


Five Lessons I Learned Starting and Running AeroAstro
By Rick Fleeter 

According to Rick Fleeter, founder, President and CEO, AeroAstro Inc.,
95% of companies fail in their first 5 years, and of the remaining 5%,
maybe 0.1% become huge virtually instantly.?


Additional information that may interest you:

Canadian Statistics - Company Survival Rates
Atlantic Canada Opportunities Agency


Search criteria:
"Companies go out of business after * years"
?businesses fail in their first * years"
Business failure statistics
Business survival rates 
Business failure statistics longevity "* years"

I hope you find this information useful!

Best regards,

Request for Answer Clarification by madged-ga on 17 Feb 2004 15:35 PST
This is the first time I have used this service and I am thrilled and
am running around telling my colleagues about your service.

The one clarification question I would have - is there a way to obtain
a statistic on how many companies are in business 25 years or more?

Clarification of Answer by bobbie7-ga on 17 Feb 2004 15:50 PST
Hi Madged!

I'l delighted that you are thrilled with Google Answers.

I'll see what I can dig up regarding  companies that are in business
25 years or more.


Clarification of Answer by bobbie7-ga on 17 Feb 2004 18:30 PST
Dear Madged,

This was a very difficult statistic to uncover, but thanks to the help
of my good friend and colleague Pinkfreud-ga, I can provide you with
the following figures.

From a Ruf Strategic Solutions press  release dated  June 5, 2001: 

?Only 7 percent of all businesses in the U.S. have been in business
for 25 years or more.?

Source: Ruf Strategic Solutions 

Here is a statistic regarding family business longevity taken from the
article ?Understanding family-business survival statistics? by Craig
Aronoff. Craig Aronoff is one of the founders of the Family Business
Consulting Group

?30% of family businesses make it to the second generation, 10-15%
make it to the third and 3-5% make it to the fourth generation.?,5333,62304,00.html

I hope this helps!

madged-ga rated this answer:5 out of 5 stars and gave an additional tip of: $5.00
Wonderful - thrilled with this service. 
I will be back!!!

Subject: Re: Statistics on longevity of companies in the U.S.
From: bobbie7-ga on 17 Feb 2004 19:04 PST
Thank you for the five star rating and tip!

Important Disclaimer: Answers and comments provided on Google Answers are general information, and are not intended to substitute for informed professional medical, psychiatric, psychological, tax, legal, investment, accounting, or other professional advice. Google does not endorse, and expressly disclaims liability for any product, manufacturer, distributor, service or service provider mentioned or any opinion expressed in answers or comments. Please read carefully the Google Answers Terms of Service.

If you feel that you have found inappropriate content, please let us know by emailing us at with the question ID listed above. Thank you.
Search Google Answers for
Google Answers  

Google Home - Answers FAQ - Terms of Service - Privacy Policy