Mike Andes argues the real failure rate for small service businesses like cleaning and landscaping is 80-90% in five years, not the commonly cited 50-60%. Larger small businesses with franchises and retail backing survive much longer.
All of us have heard the stat that 50 to 60% of small businesses fail in the first five years. However, I believe that number is more like 80 to 90%. Let me explain, because when you talk about small businesses, that includes like McDonald's, massive retail chains, and really a build out of real estate that might cost 500,000 or a million dollars. Well, they're not going to go out of business quickly. They have a 10, 15, 20 year lease. Also, typically, their owners are going to be massive investors in. So they're not going to go out of business anytime soon. But when you look at cleaning companies, lawn care, landscapers, construction, construction, roofers, fences, et cetera, I would say 80 to 90% of those small businesses fill in the first five years.
