About 1 in 12 Businesses Are Considerably Profitable

2006 statistics from the Small Business Administration (SBA) show that "two-thirds of new employer establishments survive at lease two years, and 44 percent survive at least four years" (See Reasons Businesses Fail).   These figures are "encouraging."  It was thought for many years that 95% of all new business fail within 5 years.

Survival is not success.  The only way that a business succeeds is when it is profitable. 

In 1999 the National Federation of Independent Business' Education Foundation (NFIB) "estimates that, over the lifetime of a business, 39% are profitable, 30% break even, and 30% lose money, with 1% falling in the "unable to determine" category"  (See What's Behind High Small-Biz Failure Rates?).  There are questions about what constitutes "the lifetime of a business," whether merges and sales of businesses end its lifetime and profitability for it's founders and original investors.  However if only 39% of small businesses that are profitable, probably only a small percent, perhaps 10%, of those businesses actually make considerable profit.  Maybe another 10% make profit beyond the living expenses of its owners and/or stockholders.  Of the remaining 80% of the profitable small businesses, one could guess that at least half make very small profit and that the other half does not make much more.  So, possibly 8% of the small businesses are successful enough to warrant all of the time, energy and focus required to maintain that success.