When comparing small business failure rates between the United States and Mexico, it’s evident that both countries present significant challenges, though the landscape in Mexico is slightly more difficult. In the U.S., about 20% of small businesses fail within their first year, a figure that increases to 50% by the fifth year and 65% by the tenth year(Commerce Institute,Cin7).
In contrast, Mexico sees a higher initial failure rate, with around 25% of small businesses failing within the first year. By the fifth year, the failure rate is similar to that of the U.S. at 50%, but by the ten-year mark, the failure rate rises to 70%(Site homepage,Aspen Public Radio).
These higher failure rates in Mexico are often attributed to economic instability, regulatory challenges, and limited access to financing. These factors highlight the importance of strategic planning, strong financial management, and market research for small business owners in both countries.
Understanding these risks and preparing for them is crucial for small business success, particularly in the critical early years. Entrepreneurs in both the U.S. and Mexico can benefit from a focus on these areas to ensure their business longevity.
Sources:
- Commerce Institute, “What Percentage of Businesses Fail Each Year?” (2024) – Read more(Commerce Institute).
- LendingTree, “Percentage of Businesses That Fail” (2024) – Read more(LendingTree).
- OECD Scoreboard, “Financing SMEs and Entrepreneurs 2022” – Read more(Site homepage).
- Aspen Public Radio, “Small businesses are failing at higher rates in their first year” – Read more(Aspen Public Radio).
- Dallas Federal Reserve, “Mexico Economic Update” – Read more(Dallas Fed).
