Fundamentals of Management, 8th ed

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Part 2: Planning

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Exact numbers of start-ups and failures are surprisingly difficult to determine, how-

ever. For instance, a business may shut down because it is out of money (a failure) or

simply because the owner decides to do something else; or the business may be sold to

another business and cease to exist as an independent entity. Likewise, an ongoing sole

proprietorship that becomes a partnership or corporation is not really a new business but

may be counted as such in some statistics; similarly, a large corporation might launch a

new enterprise as a new wholly owned but separately incorporated enterprise.

In general, though, experts believe that new business start-ups generally run between

around 700,000 and 900,000 per year and that business failures generally run between

600,000 and 950,000 per year. Figure 5.5 illustrates trends in new business start-ups

and failures through 2008 (the most current data available).