Are small business failure statistics getting worse over time?

Not really. Small business failure rates have stayed fairly stable for more than 25 years, according to U.S. Bureau of Labor Statistics data. The pandemic drove a short-lived spike in closures, but the long-run trend has not shifted much. What has changed is how businesses have to compete to win and keep customers.

• Long-term stability: roughly 1 in 5 businesses close in year one and about half by year five, and those numbers have held steady for decades.
• Pandemic blip: closures rose temporarily in 2020, then normalized as the economy reopened.
• Higher acquisition bar: digital advertising is more crowded and expensive, so the cost of earning a new customer has climbed.
• Brand matters more: businesses that stay visible with consistent branding across print and digital tend to weather slow periods better.

The takeaway is that failure is not getting worse, but standing out is getting harder, which makes steady brand investment more valuable than ever.