Two fifths of UK businesses survive for five years
Posted: Tue 24th Nov 2015
Official figures out today show that 41% of the businesses set up in 2009 were still trading in 2014.
The statistic was included in new business demographic data released by the Office of National Statistics (ONS).
By region, the highest five-year survival rate was in the South West, at 45.0%, while the lowest was in London, at 38.6%.
Particularly high five-year survival rates include health companies at 51.8% and education firms with 50.9% still trading after five years.
Accommodation and food service businesses experienced the lowest rate, with only 33.4% of businesses surviving for five years.
The number of new companies, described as 'business births', increased from 346,000 to 351,000 between 2013 and 2014, the highest recorded since comparable records began in 2000, ONS said.
But the total companies shutting down, or 'business deaths', also increased from 238,000 to 246,000. This compares with a decline in failed firms from 252,000 to 238,000 during the previous year. The rate of deaths however saw an overall 0.1% fall.
Emma Jones, founder of Enterprise Nation, said: "Britain's appetite for starting and running a business has been growing exponentially for many years. It's not a flash in the pan, it's not a result of the recession, it's simply the new normal.
"Technology means people can grow a business from their kitchen table in and sell their products globally, it also opens up entrepreneurship because people can more easily spot a gap in the market and build organically.
"Tailoring and targeting the right advice to the right business must be a high priority in order to help take these businesses to the next level and avoid the mistakes that can cause fledgling firms to fold prematurely."
In 2014, the highest rate of business births was in the business administration and support sector. It was driven by an increase of 5,000 new companies delivering business support services.
The second highest rate occurred in finance and insurance at 17.6%, compared with 16.9% in 2013.
The highest business death rate, at 13.1%, was among accommodation and food service companies. This was followed by business administration and support firms.
Within the regions, London had the highest business birth rate at 17.7% last year, followed by the North East (14.0%) and North West (13.7%). Northern Ireland had the lowest birth rate at 8.7%.
London also had the highest business closure rate at 10.6%, followed by the North East with 10.2%. The highest number of births and deaths were in London at 89,000 and 53,000 respectively.
Check out Enterprise Nation's advice on starting and growing a business.