25% of Georgia businesses fail in the first year, according to a survey by LendingTree.
The Peach State has the 7th highest rate of business failures after the first year in the U.S., the survey notes, with Washington, D.C. listed as having highest rate of business failures after one year. Rhode Island, Missouri, Montana, Vermont, and New Hampshire are also ahead of Georgia. California has the lowest one year failure rate.
The survey also measured five and ten-year failure rates. Georgia’s five-year business failure rate was 50%, and the ten year failure rate was 63%. Although the numbers may seem high, Georgia’s five and ten-year small business failure rates are not as notably high as the one-year failure rate.
“[Georgia] actually fares far better compared to the rest of the nation when it comes to this five and ten-year failure rate,” LendingTree Chief Credit Analyst Matt Schulz said. “So Georgia ranks seventh in failure rate in one year, but in five-year it ranks 18. And in ten years, it ranks all the way down 33rd.”
Schulz said the data can seem dismal, but it is important for aspiring entrepreneurs to enter the business world with their eyes wide open.
“It really does drive home the need to be as ‘planful’ as possible and be as thoughtful as possible, and to to do your homework and to make sure that you do everything you can to and to to try and give those odds a little more in your favor,” Schulz said.
According to Schulz, having a plan and a support system helps ensure success in the entrepreneurial world.
This story comes to The Georgia Sun through a reporting partnership with GPB a non-profit newsroom focused on reporting in Georgia.