BISMARCK, N.D. (KXNET) — Small businesses are often seen as excellent ways for producers to sell their own creations, and for buyers to support their local communities, However, while these business may be local and often times profitable, they aren’t always sustainable. Across the United States, many small businesses do not survive their first year — and the chances of them lasting longer are even more unlikely. Thankfully, as a recent study shows, small businesses in North Dakota have a fairly strong chance of holding strong through the years.
Recently, business credit card group Capital on Tap analyzed data from the U.S Bureau of Labor Statistics in an effort to determine which states had the highest and lowest rates of small business survival. To do so, the organization scraped from the Bureau’s data on each U.S State between 1994 and 2022, and observed the number of businesses that have stayed open after one, three, and five years.
After these numbers were tallied and weighed against the overall number of ventures in each state, it was determined that North Dakota is one of the best states for small businesses. As the study and BLS reports show, an average of 79.55% of all small businesses in North Dakota last past their first year — with 63.63% and 53.65% remaining after three and five years, respectively. While these are not the highest numbers in the country, they are among the best.
| Rank | State | 1-Year Average Survival Rate (in Percentage) | 3-Year Average Survival Rate (in Percentage) | 5-Year Average Survival Rate (in Percentage) |
| 1 | Massachusetts | 81.91 | 64.96 | 54.38 |
| 2 | Wisconsin | 81.13 | 64.93 | 54.97 |
| 3 | South Dakota | 80.44 | 64.03 | 54.88 |
| 4 | Minnesota | 80.96 | 63.97 | 53.51 |
| 5 | Iowa | 80.85 | 63.71 | 53.65 |
| 6 | North Dakota | 79.55 | 63.63 | 53.98 |
| 7 | Pennsylvania | 80.69 | 63.51 | 53.18 |
| 8 | Montana | 79.60 | 62.79 | 53.03 |
| 9 | Hawaii | 79.37 | 62.22 | 52.21 |
| 10 | North Carolina | 79.85 | 61.91 | 51.25 |
In contrast, there are many states in the US that report extremely low success rate for small businesses — and the same can be said for the District of Columbia. The states with the lowest rates of small business survival are as follows.
| Rank | State | 1-Year Average Survival Rate (in Percentage) | 3-Year Average Survival Rate (in Percentage) | 5-Year Average Survival Rate (in Percentage) |
| 1 | Washington | 75.12 | 54.60 | 42.75 |
| 2 | District of Columbia | 76.04 | 54.73 | 43.73 |
| 3 | New Mexico | 76.64 | 56.58 | 45.58 |
| 4 | Florida | 77.00 | 56.82 | 44.95 |
| 5 | Nevada | 77.18 | 57.38 | 46.79 |
| 6 | New Hampshire | 76.65 | 57.52 | 46.63 |
| 7 | Arizona | 77.34 | 58.00 | 46.74 |
| 8 | Tennessee | 78.46 | 58.21 | 46.81 |
| 9 | Arkansas | 77.64 | 58.24 | 47.25 |
| 10 | Rhode Island | 76.76 | 58.30 | 47.75 |
“Despite the gruelling statistic that 20% of American small businesses fail within their first year,” states Capital on Tap’s Chief Legal, America, and Product Officer Damian Brhchy, “it’s reassuring to see that many states offer a strong environment for businesses to grow. There are over 30 million small businesses in the U.S., making up an enormous percentage of the economy, and as this number continues to grow, so will innovation and commercial drive. This research should serve as a positive sign to entrepreneurs in the top ten states who are thinking about starting a business.”
If you’re thinking of starting your own business here in North Dakota, you’re in luck. In addition to our high rate of small business survival, we here at KX News have previously featured a guide on starting your own small business. Check out the following links for more information.
