“Mamas don’t let your babies grow up to start construction companies,” could be the first line of a country song about new business failure rates. Five years after starting, the share of mining companies remaining alive is nearly 15 percentage points higher than the fraction of construction businesses still in operation (52.3 percent versus 36.4 percent).
In the figure above, I have plotted the five year survival rates for new companies founded in 2005 using data from the Census Bureau’s Business Dynamics Statistics.
While there are many sources of data on start-up failure rates, these are probably the best. They come from a longitudinal database of businesses that government economists and statisticians created by linking together annual administrative records, such as unemployment insurance filings. (The use of administrative records eliminates errors that emerge from efforts to survey company owners.)
To read the full, original article click on this link: Failure Rates by Sector: The Real Numbers | Small Business Trends
