You’ve heard it before: Half of all small businesses are doomed to fail before their first year is out.

You’d think this statistic would put people off of opening small companies – especially high risk ones like restaurants and retail stores – but this doesn’t seem to be the case.

When it comes to functionality, the general statistics are equally dire.

Statistics only get more discouraging as time goes on: 95 percent of small businesses are doomed to fail within five years. (Complete infographic below…)

Small business failure rate statistics

  • only 40 percent of them are profitable;
  • 30 percent break even and
  • another 30 percent are doomed to only lose money.

Why does the small business do so badly in a country where owning one is part of the national dream?

It appears that many new restaurant and retail store owners have trouble with the business aspects of their business. It turns out that, for new business owners, knowledge about how to run a company tends to be lacking.

[sociallocker](Click for full view of the small business failure rate statistics graphic):

Source: Top Business Degrees[/sociallocker]


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Entrepreneur Magazine says Jon Rognerud is one of the most sought-after Digital Marketing Experts. His clients extend from high-end brands and middle-tier businesses in both B2B and B2C. His SEO website optimization book, "The Ultimate Guide to Optimizing Your Website" from Entrepreneur Press is in bookstores now.