BLS report shows that only a third of businesses survive more than a decade

Political leaders on both sides of the aisle often tout the importance of small businesses to the US economy. The Bureau of Labor Statistics (BLS) defines a small business as an enterprise with fewer than fifty workers. Other organizations, like the US Small Business Administration (SBA), put that maximum employee count much higher at 500. According to this threshold, ninety-nine percent of businesses in the US can be classified as small and are responsible for employing 61.7 million Americans or around 46.4 percent of the private sector workforce. Critically, only twenty percent of these businesses employ other workers, with 27.1 million being run by their owners without additional support.

Some industries saw much higher rates of business success

The short report published by the BLS found that for businesses established in 2013, only 34.7 percent remained in business a decade later in 2023.

The BLS does not release data on business success by size; instead, it only focuses on industry. What the data shows is that some sectors have recorded higher survival rates, an indicator that certain companies that operate on a smaller scale can better compete in the market. For example, 50.5 percent of businesses in the agriculture, forestry, fishing, and hunting industries survived ten years. Similarly, utility companies (45.7 percent) and manufacturing companies (43.6 percent) also saw higher rates of success when compared to other industries like mining, quarrying, and oil and gas extraction (24.5 percent) and information (29.1 percent).

Small business owners remain optimistic

The US Chamber of Commerce uses the SBA’s definition and surveys business owners within this group quarterly. Based on the most recent survey, the macro-level financial outlook for many business leaders is negative. “Just a quarter (25%) of small businesses say the U.S. economy is in good health, and 30 percent say their local economy is in good health, both down eight percentage points since last quarter,” wrote Thaddeus Swanek, a Senior Writer and Editor, at the Chamber of Commerce in December. However, when looking at their own personal financial situation, the feedback was more positive, with over two-thirds of the business owners describing the “health of their business” as “very or somewhat good.” Regarding cash flow, the percentage that said they were “somewhat or very comfortable” stood at 67 percent, down from the quarter before but steady when compared to the figure captured a year earlier.