Question
What is the restaurant failure rate in the first year?
Answer
Roughly 60% of restaurants fail in their first year, according to data from the Cornell Hotel and Restaurant Administration Quarterly. That is about three times the ~20% first-year failure rate for small businesses overall.
| Business type | First-year failure rate |
|---|---|
| Restaurants | ~60% |
| Average small business | ~20% |
- Undercapitalization: running out of cash before the concept catches on is a leading cause.
- Poor location: the wrong spot can sink even good food and service.
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