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Florida's record on the survival of small businesses after three years is the fourth worst in the nation, according to Capital on Tap, an Atlanta-based small-business credit card and spending management platform.
Capital on Tap conducted research to determine the U.S. states with the highest chance of survival for a small business in a three-year and five-year time frame, according to a news release.
Its study analyzed data from the U.S. Bureau of Labor Statistics to reveal the percentage of startups active after three years. The survival rate of private sector establishments by opening year was pulled from BLS for each U.S. state between 1994 and 2022.
"When looking at the one-year survival rate of a business that opened in 1994, for example, the survival rate was taken for 1995," Capital on Tap says. "When looking at the three-year survival rate of a business that opened in 1994, data was taken from 1997."
The state with the worst three-year average was Washington state, where only 54.6% of new small businesses were still around after three years. After five years, that number dropped to 42.75%.
Washington, D.C., had the second worst rate, with 54.73% of new small businesses remaining after three years, and 43.73% of small business remaining after five years. New Mexico came in third, with a three-year survival rate of 56.58% and a five year-rate of 45.58%.
Florida's three-year survival rate for small businesses went from 77% in the first year to 56.82% in the third year, to 44.95% in the fifth year.
Nevada, New Hampshire, Arizona, Tennessee, Arkansas and Rhode Island rounded out the bottom 10 in small business survival.
The top state in the union for three-year business survival was Massachusetts, with a three-year rate of 64.96% and a five-year average of 54.38%.
Rounding out the top five states for three-year survival rates were Wisconsin (64.93%); South Dakota (64.03%); Minnesota (63.97%); and Iowa (63.71%).
Damian Brychcy, Capital on Tap's chief legal, America and product officer, says small business survival is no easy task for business owners or states to manage.
"Despite the grueling statistic that 20% of American small businesses fail within their first year, it's reassuring to see that many states offer a strong environment for businesses to grow," says Brychcy.
Capital on Tap says there are more than 30 million small businesses in the U.S., "making up an enormous percentage of the economy, and as this number continues to grow, so will innovation and commercial drive. This research should serve as a positive sign to entrepreneurs in the top ten states who are thinking about starting a business."
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