An analysis of new Bureau of Labor Statistics data in LendingTree’s third annual business survival rate report shows that the Grand Canyon State ranks No. 10 among places with the highest rate of small business failures. In fact, over 25% of Arizona’s small businesses have failed within their first year of operation, compared to the national average of 23.2%.
LendingTree’s researchers also calculated the five- and 10-year small business failure rates in Arizona:
| First-year Failure Rate | Rank, 1-year Failure Rate | Five-year Failure Rate | Rank, 5-year Failure Rate | Ten-year Failure Rate | Rank, 10-year Failure Rate | |
| Arizona | 25.7% | 10 | 50.4% | 15 | 65.9% | 22 |
Full findings >> The Percentage of U.S. Businesses That Fail [2024 State-by-State Analysis]
Other key takeaways
- 23.2% of private sector businesses in the U.S. fail within the first year. After five years, 48% have faltered. After 10 years, 65.3% of businesses have failed.
- Washington state sees the highest business failure rate within the first year. In Washington, 40.8% of businesses fail in that first year, followed by the District of Columbia (32.2%) and Idaho (30.7%).
- California sees the lowest business failure rate within the first year. In the Golden State, 13.2% of businesses fail in that first year, followed by Washington (16.7%) and Nevada (18.5%). However, even though Washington has the second-lowest failure rate within the first year, it has the highest failure rate after 10 years (78.5%).
