Business Statistics

in US:

• Of all small businesses started in 2014 (Mansfield 2019: https://smallbiztrends.com/2019/03/startup-statistics-small-business.html)
• 80 percent made it to the second year (2015);
• 70 percent made it to the third year (2016);
• 62 percent made it to the fourth year (2017);
• 56 percent made it to the fifth year (2018).

• Top 5 causes of small business failure (Mansfield 2019: https://smallbiztrends.com/2019/03/startup-statistics-small-business.html):
1. No market need: 42 percent;
2. Ran out of cash: 29 percent;
3. Not the right team: 23 percent;
4. Got outcompeted: 19 percent;
5. Pricing / Cost issues: 18 percent;

• 40 percent of small businesses are profitable, 30 percent break even and 30 percent are continually losing money (Mansfield 2019: https://smallbiztrends.com/2019/03/startup-statistics-small-business.html).

• Having two founders, rather than one, significantly increases your odds of success (Mansfield 2019: https://smallbiztrends.com/2019/03/startup-statistics-small-business.html).

• The 5 most profitable small business industries by net profit margin (NPM) are (Mansfield 2019: https://smallbiztrends.com/2019/03/startup-statistics-small-business.html):
1. Accounting, Tax preparation, Bookkeeping, and Payroll Services: 18.4 percent NPM
2. Lessors of Real Estate: 17.9 percent NPM
3. Legal Services: 17.4 percent NPM
4. Management of Companies and Enterprises: 16 percent NPM
5. Activities Related to Real Estate: 14.9 percent NPM

• Successful entrepreneurs are middle-aged, not young. There's no evidence to suggest that founders in their 20s are especially likely to succeed. The mean founder age for the 1 in 1,000 highest growth new ventures is 45.0 (Azoulay et al. 2018: https://www2.census.gov/ces/wp/2018/CES-WP-18-23.pdf).

• Prior experience in the specific industry predicts much greater rates of entrepreneurial success. Prior employment in the specific sector predicts a vastly higher probability of an upper-tail growth outcome or successful exit, with success rates rising up to 125%. The closer the industry match, the greater the success rate (Azoulay et al. 2018: https://www2.census.gov/ces/wp/2018/CES-WP-18-23.pdf).
• Empirical studies have found that human capital, including the acquisition of relevant market and technical knowledge, can predict entrepreneurial success.
• Owner's prior experience at starting a business increases the longevity of the next business opened even after controlling for person fixed effects.
• Ventures started by former employees of incumbent firms perform better than other new entrants, an advantage that appears related to industry-specific market knowledge.
• Findings indicate that founders with both closer and longer experience in the industry of the start-up see substantially greater success rates. These findings reject the idea that coming from outside a sector predicts outsized entrepreneurial success.
• These findings are consistent with theories in which key entrepreneurial resources (such as human capital, financial capital, and social capital) accumulate with age.

• More sources:
• National Small Business Association (NSBA) 2017 YEAR-END ECONOMIC REPORT: https://nsba.biz/wp-content/uploads/2018/02/Year-End-Economic-Report-2017.pdf

in Switzerland:

• The average survival rate of new firms has not changed significantly in Switzerland in recent years: it remains about 80% about one year after creation, and slightly less than 50% after five years, according to the Office fédéral de la statistique (OFS) (https://www.kmu.admin.ch/kmu/fr/home/politique-pme/politique-pme-faits-et-chiffres/chiffres-sur-les-pme/fermetures-d_entreprises.html).