ONS Data analysed by financial technology firm, Ormsby Street, revealed 91% of small businesses survive after the first year of trading but only 40% will survive after five years.
Businesses in the healthcare and education industries tend to be more successful in the long term, while new retailers and communication businesses do very well within the first year.
The data shows property businesses tend to struggle in the first year of trading, while food companies and accommodation businesses are more likely to fail in the long-term.
Ormsby Street has recently launched a ‘Business Survival Calculator’ to determine which sectors thrive in the current climate against those which face challenging markets and financial issues.
Managing Director of Ormsby Street, Martin Campbell, said:
“The UK is becoming increasingly entrepreneurial, with people viewing working for themselves or launching a small business or startup as a viable and rewarding career option. But it is tough running a business and we’ve launched the business survival calculator for small businesses to understand more clearly the challenges ahead of them and to be aware of the survival rates for businesses in their sector.”
He added that poor cash flow, often caused by late payment, is one of the biggest problems small businesses face. Ensure your debt collection system is up to scratch with strict policies in place to avoid delays in payments and always get references. View our page on debt collecting tips here.