Startup statistics. Some people will sigh and think, “that doesn’t apply to me”. However, I would say that if you are thinking about launching a new business, it’s very important to understand the statistics of starting a small business.
In general, most new businesses will fail. If you think that can’t possibly happen to you, you need to strongly consider the possibility that it could. Then do everything you can to avoid it. According to Inc.com, only 4 out of 100 businesses survive past 10 years.
The team at Small Business Trends put together a great list of startup statistics here – https://smallbiztrends.com/2019/03/startup-statistics-small-business.html
Out of all the businesses started in 2014, here are survival stats:
- 80% made it to the second year (2015);
- 70% made it to the third year (2016);
- 62% made it to the fourth year (2017);
- 56% made it to the fifth year (2018).
The #1 reason startups fail? No market need/demand. Solve a REAL problem, and you can drastically reduce that as a potential reason for your startup failure. Don’t worry, there are plenty of others to look out for……
Startup Failure Statistics
- According to the article, here are the top 10 reasons startups fail:
- No market need: 42 percent;
- Ran out of cash: 29 percent;
- Not the right team: 23 percent;
- Got outcompeted: 19 percent;
- Pricing / Cost issues: 18 percent;
- User un-friendly product: 17 percent;
- Product without a business model: 17 percent;
- Poor marketing: 14 percent;
- Ignore customers: 14 percent; and
- Product mistimed: 13 percent.
On Startup Funding:
According to the stats, a full 1/3rd of business owners start with less than $5,000 and 58% got started with less than 58%.
Sources of Collective Startup Funds:
The largest source of startup funds didn’t come from investors, or banks, it came from good old savings. The vast majority of people starting a business (77%) use personal funds as a portion or all of their startup funds.
- Personal funds 77%
- Bank loan 34%
- Borrowing from family/friends 16%
- Other funding 11%
- Donations from family/friends 9%
- Online lender 4%
- Angel investor 3%
- Venture capital 3%
- Crowdfunding 2%
Gender Startup Statistics:
It is great to see the number of female founders rising as some of the best entrepreneurs I work with are females. They tend to be harder working, more detail oriented, and more focused on the long game.
Age Startup Statistics:
According to the article, 53% of those that start businesses are between 50 and 69 years old. Proof that you’re never too old to start.
I hope you find these statistics as educational as I did. I will continue to update this data as I come across more.