Top 10 industries with the best startup survival rates for 1–5 years
Cohort view using official business-demography series: BLS Business Employment Dynamics (Establishment Age & Survival), U.S. Census Business Dynamics Statistics, plus EU/UK guidelines for comparability.
What “survival” means in official stats
In BED/BDS a firm “survives” if the establishment born in a given year remains active in later years. Survival is tracked by birth cohort at 1, 2, 3, 4, 5 and 10 years. Nationally, roughly eight in ten reach year-1, about half reach year-5; the 10-year share is about one-third.
Interpretation: Sector survival reflects regulation/licensing, capital intensity, customer tenure, and failure costs. Cross-country demography shows similar shapes even when levels differ.
Methodology
- Scope: U.S. industries (NAICS 2-digit). Ranking emphasizes 5-year survival; 3-year survival and qualitative evidence are tie-breakers.
- Cohorts: We use the most recent stable ordering visible in BLS survival tables to avoid pandemic-era distortions.
- Comparability: Values are cohort-based establishment survival (not revenue). Industry definitions follow NAICS; revisions may shift exact percentages.
Top-10 industries with the highest 5-year survival
Ordering reflects consistent patterns in BLS survival tables; percentages vary by cohort and revision.
- Utilities
Regulated, capital-intensive, long contracts.
LicensingHigh barriers - Finance & Insurance
Recurring fees, compliance moats.
Recurring revenueRisk controls - Educational Services
Sticky enrollment and accreditation.
AccreditationMulti-year contracts - Health Care & Social Assistance
Demographic tailwinds; payor networks.
Payor contractsStable demand - Real Estate & Rental/Leasing
Asset backing and long leases.
LeasesCollateral - Professional, Scientific & Technical Services
Retainer clients; credential barriers.
B2B retainersLicensure - Information
Subscriptions, IP, and platform lock-in.
SaaSIP assets - Manufacturing
Capital and quality systems raise persistence.
CapexCertifications - Wholesale Trade
Contracted B2B relationships, scale in logistics.
DistributionVendor terms - Construction
Project backlogs aid survivors; volatility remains.
BacklogsBonding
Sectors like Accommodation & Food or Arts & Entertainment typically show lower 5-year survival due to thin margins, seasonality, and churn.
Five-Year Startup Survival — Top-10 Industries (cohort %)
Illustrative ordering from BLS survival tables. Axis 0–70%. Large labels and left-aligned industries for maximum legibility on mobile.
- Most attrition happens in year-1. Curves flatten after year-2 as fixed-cost and PMF hurdles are cleared.
- Regulation & capital intensity lift survival. Utilities, finance and health care persist across cohorts.
- Thin-margin, seasonal sectors (food service, arts/entertainment) usually underperform on 5-year survival.
Primary Government Sources
- BLS — Business Employment Dynamics: Establishment Age & Survival
- U.S. Census — Business Dynamics Statistics
- Eurostat — Business Demography
- UK ONS — Business Demography
Percentages shown are illustrative for clarity and follow the stable ordering seen in recent U.S. cohorts; check the latest BED/BDS tables for exact values by industry and cohort.
