Generally, small businesses fail within one year of their startup. It was found that 90 percent of the small businesses fail within one year. According to the SBA study and others, about 70 percent of the new firms have at least one employee surviving for a minimum of two years. 30 percent failure rate after one year was observed which was considered as the main risk for starting a small business. Change in personal interest of the owner and some health issues might be the reasons for small business failure.
However, the most important factor for the failure is the risk. According to the Bureau of Labor Statistics, it was found that 31 percent of the jobs taken by older workers was ended in less than one year. About 65 percent of the jobs were found to be ended in less than five years.
The study conducted by SBA included firms having at least one employee other than the business owner. It was found that higher rate of starting and stopping the business was observed in non-employer firms.