91% of start-ups survive first year, but just 40% reach fifth birthday

91% of UK start-ups survive their first year of trading but just 40% will live to see their fifth birthday, according to new research by Ormsby Street.

It’s revealed that businesses in the health sector are the ones most likely to last with 51.8% still in the land of the living five years on, with those in finance and insurance most likely to initially fail as 83.2% last just 12 months.

In terms of longevity, food and accommodation start-ups don’t appear built to last as just 33.4% are still operating five years after their inception.

Start-ups in the information and commutations industry (93.8%) have the best chance of survival in their first year.

Most likely to succeed

Year 1: Information and communications (98.3%)
Year 2: Health (80.1%)
Year 3: Health (66.6%)
Year 4: Health (56.3%)
Year 5: Health (51.8%)

Most likely to fail

Year 1: Finance and insurance (83.2%)
Year 2: Property (67.8%)
Year 3: Accommodation and food services (53.9%)
Year 4: Business administration (40.9%)
Year 5: Accommodation and food services (33.4%)

Martin Campbell, managing director of Ormsby Street, said:

“The UK is becoming increasingly entrepreneurial, with people viewing working for themselves or launching a small business or start-up as a viable and rewarding career option.

“There is no shame in a business failing – in the US it is almost seen a badge of honour to so and if it does happen then it should be used as valuable experience for the next venture.”