Final answer:
Around 70% of new businesses survive the first two years, and about 50% reach the five-year mark, with small firms experiencing high turnover rates.
Step-by-step explanation:
While nearly 70% of new businesses survive at least two years, about 50% make it to the five-year mark. According to the U.S. Small Business Administration, many businesses, especially small firms with fewer than 20 employees, face significant challenges with a high percentage of both entries and exits occurring within this segment. The difficulty in sustaining a business is emphasized by the fact that the majority of businesses 'exiting' is a representation of those that cannot consistently make money and are compelled to shut down, leading to job losses and financial losses for investors and owners. Economic studies have shown that just under half of all workers in private firms are employed by large firms, and another 35% by businesses with fewer than 100 workers, which includes a wide range of small-scale businesses. This contrast in firm size and survival rates highlights the competitive nature of the market and the reality that not all businesses can thrive long-term.