The Journal ran a quiz on Monday about small businesses. Robert J. Toth wrote it, and we took it. We got a few wrong. The one that stuck with us was question four. It asks how many new businesses last five years. The answer's about half, 51.4%. The question before it is kinder. 77.9% of new firms make it through year one. The question after it is the hard one. Just 34.7% reach ten years.
The rest of the numbers are worth a minute. The U.S. had 36,186,089 small businesses as of 2022. That's the Census Bureau's count of firms with 499 or fewer workers. Only 21,041 firms were bigger than that. And most small businesses are tiny. About 29.8 million of them, 82.4%, have no employees. That's one person, a laptop and a coffee.
Survival depends on the trade. Farming, forestry, fishing and hunting do best. 85.7% of those firms make it a year, and 53% make it ten. The information sector does worst. That sector includes movie studios, publishers, data processors and web hosts. Only 71.6% of those firms reach year one. By year five, 45.7% are left.
Who starts them
Here's the part that matters for our readers. The most common age to start a business is 45 to 54. That group made up 26.7% of new entrepreneurs in 2020, by a Kauffman Foundation study. Women were about 40.4% of new founders in 2025. About 32.2% of entrepreneurs were born outside the U.S. Professor Robert Fairlie of UCLA supplied those last figures. So a lot of founders are grown-ups with a mortgage, a 401(k) and maybe a kid in college.
Our read
This is a Retirement (M10) story wearing a quiz costume. Half of new businesses are gone in five years. Those odds say size the bet, and keep the dream. A business started at 50 has the best saving years behind it and fewer years ahead to recover. Money pulled early from a 401(k) or an IRA can also mean tax and a penalty. So we've got a simple rule. Fund the business from a separate bucket you could lose without moving your retirement date. Keep the retirement accounts and the emergency fund out of it. Pay yourself a real wage from day one, so you know whether the business works. On Oct. 20 we said to price a laundromat the way a lender would. This quiz puts the odds behind that advice.
The one thing in your plan this touches is the startup bucket. Decide the most you'd put in, write it down, and keep it apart from retirement money. The check this week is simple. Pull your last 401(k) statement and ask whether the business plan quietly leans on it. If it does, let's talk before the lease gets signed. The umbrella is cheaper on a dry day.