DC’s Startup Business Failure Rate Is Highest in the Country

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The D.C. region is consistently ranked as one of the top cities for entrepreneurs and startup businesses, but the failure rate of new businesses is also high.

According to LendingTree research, the failure rate of D.C. startups during their first year in business is 32.2%, compared to 23.2% nationally. That’s based on the latest data from the U.S. Bureau of Labor Statistics.

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The failure rate in D.C. after five years climbs to 58.1%. When compared to states, that makes the new business failure rate in the District the highest in the nation.

In D.C., almost 71% of business startups fail within 10 years.

D.C.’s high cost of living plays into startup failures.

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“If you’re starting a brick-and-mortar business for example, the cost of starting up may be prohibitive for folks and may make a steeper climb for that first year to get to profitability,” said Matt Schulz, chief credit analyst at LendingTree.


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