These 10 U.S. States Have the Lowest Business Survival Rates in 2025

Starting a business is hard. Keeping it alive is even harder.

New DesignRush data shows where businesses are most likely to fail — and how quickly it happens.

Based on U.S. Bureau of Labor Statistics data, the analysis tracks how many businesses survive their first five years across all 50 states.

The findings show that nearly half of all businesses close by Year 5 — and in some states, that number is even worse.

What the Data Shows

The national trend is clear: most businesses survive their first year, but the numbers start to fall fast. By Year 3, only 6 in 10 are still standing. By Year 5? Barely half remain.

Our infographic highlights the 10 states where businesses struggle the most to stay afloat, based on average survival rates from 2020 to 2024.

The 10 Worst States for Business Survival in 2025

1. Missouri

Average Survival Rate: 55.28%

Missouri ranks at the very bottom due to a high volume of business closures.

While nearly 73 out of 100 businesses survive their first year, that number quickly shrinks.

By Year 2, it’s down to 61.7%, and by Year 5, only 43.2% are still in business, a loss of nearly 30 companies out of every 100 over five years.

2. Washington

Average Survival Rate: 55.98%

Washington is a surprise entry here. It starts as the most promising state, with 86.4% of businesses surviving Year 1, the highest in the country.

But the drop is dramatic: only 47.4% make it to Year 2, and by Year 5, the survival rate crashes to 41.1%, the lowest five-year rate in the U.S.

3. Idaho

Average Survival Rate: 56.58%

Idaho starts off solid at 74.6% in Year 1, but that early stability fades fast.

The survival rate dips below 60% by Year 2, and continues sliding to just 47.1% in Year 5, a drop of nearly 28 percentage points from the start.

4. New Mexico

Average Survival Rate: 57.36%

Businesses in New Mexico begin at 73.8% in Year 1.

Year 2 sees a modest dip to 60.7%, but it’s the slow and steady decline that hurts — only 48.6% of businesses survive to Year 5, falling below the national average every year.

5. Kansas

Average Survival Rate: 58.12%

Kansas shows a familiar pattern, a solid first-year performance at 74.7%, followed by a steep Year 2 drop to 60.9%.

Over time, the numbers get worse: only 46.8% of businesses make it to Year 5. That’s more than 1 in 2 startups failing before their fifth birthday.

6. Rhode Island

Average Survival Rate: 58.20%

Rhode Island opens strong with 76% of businesses surviving Year 1.

But Year 3 is where things unravel — the rate falls to 51.9%, and slips further to 48.2% by Year 5. It consistently underperforms from Year 3 onward.

7. Nevada

Average Survival Rate: 58.36%

Nevada shows early resilience with 75.8% survival in the first year.

But each year sees a drop: 59.8% in Year 2, 55% in Year 3, and just 47.9% of businesses make it to Year 5, a decline of nearly 28 points.

8. Wyoming

Average Survival Rate: 58.56%

Wyoming starts at 75.7%, similar to its neighboring states, but faces declines after Year 2.

By Year 3, survival is down to 54%, and by Year 5, it’s just 47.5%, with Year 4 and 5 showing the most noticeable erosion.

9. New Hampshire

Average Survival Rate: 58.62%

In New Hampshire, 74.6% of businesses survive Year 1, but growth momentum fades by Year 3 (54.8%) and never recovers.

By Year 5, only 48.9% of businesses remain — a full 25.7-point drop from the start.

10. Oregon

Average Survival Rate: 59.00%

Oregon, named the top state for entrepreneurial success in 2024, also sees a quiet collapse in long-term survival.

It starts at 74.4% in Year 1 but steadily declines to 51.3% by Year 5 — barely above the national average.

3 Tips for Business Survival in 2025

Our analysis shows that early survival rates can be misleading, especially in places like Washington and Missouri, where initial promise gives way to steep drop-offs.

Here’s what business owners should keep in mind:

1. Strong Year 1 doesn’t mean long-term business success.

Washington had the best first-year survival rate — and the worst by Year 5. The drop from 86.4% to 41.1% is proof that early wins don’t guarantee staying power.

2. Look for consistent performance across years.

States like Pennsylvania and Wisconsin may not top Year 1, but they hold strong year over year. That stability makes a big difference by Year 5.

3. Use state-level data to de-risk your decisions.

Geography still matters. Where you start — or expand — can influence everything from access to support networks to how long your business lasts.

“The data tells a clear story — don’t just plan for launch, plan for the five-year mark. Founders who think long-term and choose their location wisely give themselves a much better shot at success.”
— DesignRush Analyst Team