Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Businessweek Archives

A Surprising Finding On New Business Mortality Rates


Economic Trends

A SURPRISING FINDING ON NEW-BUSINESS MORTALITY RATES

The common view is that four out of five new U.S. businesses fail within five years of their startup. Yet roughly 400,000 entrepreneurs take the plunge each year. Why do they bother?

The answer, says economist Bruce A. Kirchhoff of the New Jersey Institute of Technology, is that their chances of surviving are far greater than reported. In a new study, Kirchhoff traces the fortunes of some 814,000 businesses started in 1977 and 1978 over the following eight years. His findings indicate that over half survived in one form or another--28% under their original owners and 26% under new owners. An additional 28% were shuttered voluntarily, while only 18% actually failed in the sense that they left outstanding liabilities.

In other words, says Kirchhoff, "entrepreneurs aren't stupid. They look around and realize their chances of success are far better than the experts claim."GENE KORETZ


LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus