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Average number of small businesses that fail in first two years is 40%, with 5% from bankruptcy and 20% from failure to return a profit.

References:

1. Main article by David Maloney http://ezinearticles.com/?Small-Business-Failure-Rate—9-Out-...

2. Study 1: Shane, S in the study ‘Startup Failure Rates – The Real Numbers’, 2008 http://smallbiztrends.com/2008/04/startup-failure-rates.html 3. Study 2: Headd, B in the study ‘Redefining Business Success: Distinguishing Between Closure and Failure’, 2002 http://www.springerlink.com/content/u5218354gk84k205/

4. Study 3: Phillips, B. D., and B. A. Kirchoff (1989). “Formation, Growth and Survival: Small Firm Dynamics in the U.S. Economy,” Small Business Economics 1, 65-74. http://grips-public.mediactive.fr/knowledge_base/view/483/fo...

5. Do small businesses have high failure rates? Evidence from Australian retailers. http://www.allbusiness.com/buying-exiting-businesses/exiting...



These numbers are interesting, but the profile of a tech startup is very different from that of a typical "small business".

Accountants and manicurists and dentists and consultants run small businesses they start making money from a very early stage.

Tech startups have a much higher failure rate. The flip side is that these small businesses (accountants, gardeners etc.) don't have the same shot at massive scale/success that tech startups have. Andrew isn't talking about small businesses, his post is about tech startups




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