Some 20% of private businesses will not make it past their first year in operation, according to a Nulab report provided exclusively to TechRepublic.
With a low unemployment rate and plethora of job openings, the US economy is setting businesses up for success. However, the business world comes with inevitable risks, and sustainability is not guaranteed, according to Nulab's Fastest Growing and Contracting Industries report, provided exclusively to TechRepublic.
SEE: How to build a successful CIO career (free PDF) (TechRepublic)
Using data from the US Bureau of Labor Statistics' Establishment Age and Survival report, the study determined how long businesses can typically survive, where they are most likely to be sustainable, and which businesses are expanding the most.
Keeping a company alive is a difficult task. Only 80% of private businesses are still in operation after the first year, with that number dwindling to about half by the fifth year. By year 20, only a little over 20% of businesses will still be up and running, the report found.
The report determined the following 10 most resilient industries, along with the average years before half of all new business close:
- Management of companies and enterprises (9.3 years)
- Agriculture, forestry, fishing, and hunting (7.9 years)
- Utilities (7.7 years)
- Health care and social assistance (6.8 years)
- Retail trade (6.4 years)
- Educational services (6.4 years)
- Real estate and rental and leasing (6.0 years)
- Accommodation and food services (5.8 years)
- Manufacturing (5.7 years)
- Finance and insurance (5.5 years)
The tech industry came in no. 14, with an average of 4.8 years of new business survival, which reflects the ever-changing, volatile nature of the industry, the report found.
While business professionals flock to the coasts for job opportunities, that isn't necessarily where the opportunities lie, according to the report. While businesses in Massachusetts and California do have high survival rates of 82% and 81%, respectively, Michigan (81%) and South Dakota (80%) come next on the list.
The industries seeing the greatest growth and expansion overall included construction (7.1%), educational services (6.7%), healthcare and social assistance (5.3%), arts, entertainment, and recreation (4.3%), administrative and waste services (3.8%), and tech (3.7%), the report found.
For more, check out How your business can reach digital success in the next decade: 5 tips on TechRepublic.
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