January 31, 2023

Juan Kabayan

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The 10 Most Risky Industries for Starting a Business

Wooden cubes in the form of a speedometer showing the riskiness in business.Fida Olga / Shutterstock.com

Editor’s Note: This story originally appeared on HireAHelper.

Risk is unavoidable in any new business, but entrepreneurs in certain industries can expect greater likelihood of survival early on.

Real estate and rental and leasing businesses have the highest first-year survival rates at 88.4%. Other industries that rank highly for survival rates include agriculture, forestry, fishing, and hunting at 87.7% and retail trade at 87.6%.

On the flip side, other fields may be even riskier for new businesses than the overall average.

To identify the most risky industries to start a business, researchers at HireAHelper calculated a composite risk index based on the most recent one-, two-, three-, four-, and five-year survival rates for establishments in each industry. The data used in this report is from the U.S. Bureau of Labor Statistics.

Here are the most risky industries for starting a new business.

10. Construction

Construction workers on a job siteyuttana Contributor Studio / Shutterstock.comComposite risk score (higher = more risk): 47.1
1-year survival rate: 82.9%
2-year survival rate: 71.8%
3-year survival rate: 65.4%
4-year survival rate: 63.6%
5-year survival rate: 58.6%

9. Finance and insurance

A couple speaking with a financial adviser about investinggoodluz / Shutterstock.comComposite risk score (higher = more risk): 49.4
1-year survival rate: 84.7%
2-year survival rate: 73.2%
3-year survival rate: 64.7%
4-year survival rate: 61.0%
5-year survival rate: 56.7%

8. Arts, entertainment, and recreation

Woman takes photos in an art galleryRawpixel.com / Shutterstock.comComposite risk score (higher = more risk): 60.0
1-year survival rate: 81.1%
2-year survival rate: 70.6%
3-year survival rate: 63.6%
4-year survival rate: 62.0%
5-year survival rate: 57.4%

7. Transportation and warehousing

Warehouse buildingAlba_alioth / Shutterstock.comComposite risk score (higher = more risk): 65.9
1-year survival rate: 83.8%
2-year survival rate: 68.7%
3-year survival rate: 61.3%
4-year survival rate: 61.1%
5-year survival rate: 53.0%

6. Management of companies and enterprises

ManagerPressmaster / Shutterstock.comComposite risk score (higher = more risk): 70.6
1-year survival rate: 83.8%
2-year survival rate: 69.9%
3-year survival rate: 60.8%
4-year survival rate: 59.1%
5-year survival rate: 51.4%

5. Wholesale trade

Woman in a wholesale warehouseFusionstudio / Shutterstock.comComposite risk score (higher = more risk): 74.1
1-year survival rate: 82.5%
2-year survival rate: 69.3%
3-year survival rate: 61.3%
4-year survival rate: 57.3%
5-year survival rate: 52.5%

4. Professional, scientific, and technical services

Scientist works with several test tubes in a labsurachai Phurngzaka / Shutterstock.comComposite risk score (higher = more risk): 76.5
1-year survival rate: 82.9%
2-year survival rate: 69.1%
3-year survival rate: 60.8%
4-year survival rate: 58.0%
5-year survival rate: 52.3%

3. Administrative and waste services

Garbage truckphoto-denver / Shutterstock.comComposite risk score (higher = more risk): 89.4
1-year survival rate: 79.1%
2-year survival rate: 66.6%
3-year survival rate: 59.7%
4-year survival rate: 56.7%
5-year survival rate: 50.9%

2. Information

Female IT engineerGorodenkoff / Shutterstock.comComposite risk score (higher = more risk): 92.9
1-year survival rate: 79.2%
2-year survival rate: 65.2%
3-year survival rate: 56.1%
4-year survival rate: 54.2%
5-year survival rate: 48.3%

1. Mining, quarrying, and oil and gas extraction

Oil worker on sitedgdimension / Shutterstock.comComposite risk score (higher = more risk): 100.0
1-year survival rate: 74.4%
2-year survival rate: 62.5%
3-year survival rate: 52.5%
4-year survival rate: 53.0%
5-year survival rate: 41.5%

Methodology

Financial analysts look at datacreate jobs 51 / Shutterstock.com

The data used in this report is from the U.S. Bureau of Labor Statistics Business Employment Dynamics Survey.

To identify the most risky industries to start a business, researchers at HireAHelper calculated a composite risk index based on the most recent one-, two-, three-, four-, and five-year survival rates for establishments in each industry, as of March 2021.