The 10 Most Risky Industries for Starting a Business

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Wooden cubes in the form of a speedometer showing the riskiness in business.
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Editor’s Note: This story originally appeared on HireAHelper.

Risk is unavoidable in any new business, but entrepreneurs in certain industries can expect greater likelihood of survival early on.

Real estate and rental and leasing businesses have the highest first-year survival rates at 88.4%. Other industries that rank highly for survival rates include agriculture, forestry, fishing, and hunting at 87.7% and retail trade at 87.6%.

On the flip side, other fields may be even riskier for new businesses than the overall average.

To identify the most risky industries to start a business, researchers at HireAHelper calculated a composite risk index based on the most recent one-, two-, three-, four-, and five-year survival rates for establishments in each industry. The data used in this report is from the U.S. Bureau of Labor Statistics.

Here are the most risky industries for starting a new business.

10. Construction

Construction workers on a job site
yuttana Contributor Studio / Shutterstock.com
  • Composite risk score (higher = more risk): 47.1
  • 1-year survival rate: 82.9%
  • 2-year survival rate: 71.8%
  • 3-year survival rate: 65.4%
  • 4-year survival rate: 63.6%
  • 5-year survival rate: 58.6%

9. Finance and insurance

A couple speaking with a financial adviser about investing
goodluz / Shutterstock.com
  • Composite risk score (higher = more risk): 49.4
  • 1-year survival rate: 84.7%
  • 2-year survival rate: 73.2%
  • 3-year survival rate: 64.7%
  • 4-year survival rate: 61.0%
  • 5-year survival rate: 56.7%

8. Arts, entertainment, and recreation

Woman takes photos in an art gallery
Rawpixel.com / Shutterstock.com
  • Composite risk score (higher = more risk): 60.0
  • 1-year survival rate: 81.1%
  • 2-year survival rate: 70.6%
  • 3-year survival rate: 63.6%
  • 4-year survival rate: 62.0%
  • 5-year survival rate: 57.4%

7. Transportation and warehousing

Warehouse building
Alba_alioth / Shutterstock.com
  • Composite risk score (higher = more risk): 65.9
  • 1-year survival rate: 83.8%
  • 2-year survival rate: 68.7%
  • 3-year survival rate: 61.3%
  • 4-year survival rate: 61.1%
  • 5-year survival rate: 53.0%

6. Management of companies and enterprises

Manager
Pressmaster / Shutterstock.com
  • Composite risk score (higher = more risk): 70.6
  • 1-year survival rate: 83.8%
  • 2-year survival rate: 69.9%
  • 3-year survival rate: 60.8%
  • 4-year survival rate: 59.1%
  • 5-year survival rate: 51.4%

5. Wholesale trade

Woman in a wholesale warehouse
Fusionstudio / Shutterstock.com
  • Composite risk score (higher = more risk): 74.1
  • 1-year survival rate: 82.5%
  • 2-year survival rate: 69.3%
  • 3-year survival rate: 61.3%
  • 4-year survival rate: 57.3%
  • 5-year survival rate: 52.5%

4. Professional, scientific, and technical services

Scientist works with several test tubes in a lab
surachai Phurngzaka / Shutterstock.com
  • Composite risk score (higher = more risk): 76.5
  • 1-year survival rate: 82.9%
  • 2-year survival rate: 69.1%
  • 3-year survival rate: 60.8%
  • 4-year survival rate: 58.0%
  • 5-year survival rate: 52.3%

3. Administrative and waste services

Garbage truck
photo-denver / Shutterstock.com
  • Composite risk score (higher = more risk): 89.4
  • 1-year survival rate: 79.1%
  • 2-year survival rate: 66.6%
  • 3-year survival rate: 59.7%
  • 4-year survival rate: 56.7%
  • 5-year survival rate: 50.9%

2. Information

Female IT engineer
Gorodenkoff / Shutterstock.com
  • Composite risk score (higher = more risk): 92.9
  • 1-year survival rate: 79.2%
  • 2-year survival rate: 65.2%
  • 3-year survival rate: 56.1%
  • 4-year survival rate: 54.2%
  • 5-year survival rate: 48.3%

1. Mining, quarrying, and oil and gas extraction

Oil worker on site
dgdimension / Shutterstock.com
  • Composite risk score (higher = more risk): 100.0
  • 1-year survival rate: 74.4%
  • 2-year survival rate: 62.5%
  • 3-year survival rate: 52.5%
  • 4-year survival rate: 53.0%
  • 5-year survival rate: 41.5%

Methodology

Financial analysts look at data
create jobs 51 / Shutterstock.com

The data used in this report is from the U.S. Bureau of Labor Statistics Business Employment Dynamics Survey.

To identify the most risky industries to start a business, researchers at HireAHelper calculated a composite risk index based on the most recent one-, two-, three-, four-, and five-year survival rates for establishments in each industry, as of March 2021.