How Many Businesses Close Each Year? Firm Closures by Age, State and Industry (2026)

This month in brief

• 523,958 US employer firms closed all locations in the year to March 2023; 450,039 closed in the year to March 2022.
• 96,636 of the 2023 closures were firms aged 21 or more, 18.4 percent of the total, with 721,000 jobs.
• Established firms close at a lower rate than young ones (59.6 vs 210.0 per 1,000 for one-year-olds), but their relative risk has risen since 1998.
• Over 2014 to 2023, 782,122 US firms aged 21 or more closed, with 6,123,377 jobs.
• The first print of a year's firm deaths has come down 7.3 to 13.1 percent once later data arrive; 2023 is a first print.
• Colorado, Florida and California had the highest 2023 death rates for established firms; DC, Delaware and North Dakota the lowest.
• Census counts a sold business that keeps operating as a survivor, so closure counts cannot be split into failed sales and planned shutdowns.

How many businesses close each year: 523,958 employer firms in the latest count

The Census Bureau's Business Dynamics Statistics count every US employer firm that shut all of its locations between one March and the next. The newest year, ending March 2023, shows 523,958 firm deaths, the highest count in the 1978 to 2023 series.

In the year to March 2023, 523,958 US employer firms closed all of their establishments, according to the BDS 2023 release published September 25, 2025. Those firms had 2,686,413 jobs and 533,856 establishments between them.

In the year to March 2022, 450,039 US employer firms closed, with 2,474,349 jobs. That 2022 figure has already been revised once; the 2023 figure has not, which matters for reasons set out below.

Between 1998 and 2023, the lowest annual count was 379,599 firm deaths in 2012. Measured against firms aged one year or more, deaths ran from 74.6 per 1,000 firms in 2016 to 98.2 per 1,000 in 2009, and stood at 93.4 per 1,000 in 2023.

Firm death: A firm whose every establishment had employees in March of the prior year and none in March of the reference year. The BDS codebook says firm legal entities that disappear through merger or acquisition are not firm deaths.

The SBA Office of Advocacy has described the long-run pattern as about 7 to 9 percent of employer firms closing every year (fact sheet as reprinted by CAMEO; the original SBA file now returns an error). The BDS rate on our definition, 93.4 per 1,000 in 2023, sits just above that band.

Firms open 21 years or more made up 18.4 percent of 2023 closures and 26.8 percent of the lost jobs

Startups dominate closure counts, but 96,636 of the firms that closed in the year to March 2023 had been operating for at least 21 years. Because they are bigger, they carried more than a quarter of the jobs.

Firms aged 21 to 25 accounted for 25,634 deaths in 2023, firms aged 26 or more and born in 1977 or later for 57,580, and firms born before 1977 for 13,422. Together that is 96,636 established-firm deaths, 18.4 percent of the 523,958 total.

Those 96,636 firms had 721,000 jobs, 26.8 percent of the 2,686,413 jobs at all firm deaths in 2023. Spread evenly, that is 264.8 firms aged 21 or more closing per day in the year to March 2023.

One-year-old firms are still the largest single group: 106,493 deaths, 20.3 percent of the total. The highest death rate also belongs to them, at 210.0 per 1,000 one-year-old firms, against 59.6 per 1,000 for firms aged 21 or more.

Closing firms get larger with age. A closing firm aged 21 or more had 7.5 jobs on average in 2023, against 3.8 for closing firms aged one to five. Closing firms born before 1977 averaged 11.3 jobs.

Old firms now close at 0.64 times the all-firm rate, up from 0.54 in 1998

Two things changed at once: the US business stock got older, and older firms became more likely to close relative to everyone else.

Deaths of firms aged 21 or more rose from 44,747 in 1998 to 96,636 in 2023, an increase of 116.0 percent. All firm deaths rose 30.8 percent over the same span, and the number of firms aged 21 or more rose 62.7 percent.

The established share of firm deaths went from 11.2 percent in 1998 to a peak of 21.3 percent in 2021, then 18.4 percent in 2023. Over the same years the established share of firms at risk went from 20.6 percent to 28.9 percent.

The ratio of the two death rates removes the population effect. In 1998 a firm aged 21 or more closed at 0.54 times the rate of the average firm aged one or more. By 2015 it was 0.6 times, and by 2023 it was 0.64 times (59.6 against 93.4 per 1,000).

Across the ten years 2014 to 2023, 782,122 firms aged 21 or more closed, with 6,123,377 jobs. The single largest job count at established-firm deaths in the series was 939,176 in 2002.

The newest year prints high: first counts fell 7.3 to 13.1 percent once revised

BDS is built from linked administrative records, and the last year in each release has the least information behind it. Comparing three releases shows how much the first print of firm deaths has come down.

The BDS 2021 release first put 2021 firm deaths at 485,203. The BDS 2023 release puts the same year at 421,453, 13.1 percent lower. For 2022, the first print of 485,537 is now 450,039, 7.3 percent lower.

Established firms were revised by similar amounts. Deaths of firms aged 21 or more in 2021 went from 102,236 to 89,964 (12.0 percent lower), and in 2022 from 94,168 to 87,705 (6.9 percent lower).

Colorado, Florida and California lose established firms at the highest rates

Across the 50 states and DC, deaths of firms aged 21 or more ranged from 37.4 to 67.9 per 1,000 such firms in 2023. The top three are also the top three on a five-year pooled basis.

Colorado recorded 2,213 deaths among 30,373 firms aged 21 or more in 2023, a rate of 67.9 per 1,000. Florida followed at 63.1 per 1,000 (5,996 deaths) and California at 60.6 per 1,000 (10,957 deaths, the largest count of any state).

Pooling 2019 to 2023 to smooth out single-year noise, California and Colorado tie at 57.1 per 1,000 after rounding and Florida is third at 55.9. Some states move a lot between the two measures: Nebraska ranks 15 in 2023 but 43 on the pooled rate.

The lowest 2023 rates were in the District of Columbia (37.4 per 1,000), Delaware (39.5) and North Dakota (44.7). Texas (6,218 deaths, 57.2 per 1,000) and New York (6,700 deaths, 54.8 per 1,000) had the next-largest counts after California.

Professional services, health care and trades lose the most established firms

Counts and rates point to different industries. Professional services had the most established-firm deaths in 2023; agriculture had the highest rate on a small base; other services closed old firms at one of the lowest rates among large sectors.

Professional, scientific and technical services had 12,975 deaths of firms aged 21 or more in 2023 (70.8 per 1,000). Health care and social assistance had 12,192 (66.2 per 1,000), other services 11,825 (42.4 per 1,000), construction 11,798 (63.1 per 1,000) and retail trade 10,837 (61.6 per 1,000).

In manufacturing, firms aged 21 or more were 32.1 percent of all firm deaths, second only to management of companies (40.6 percent). Among the six sectors with the most established-firm deaths, accommodation and food services had the largest closing firms, at 13.5 jobs per death.

Census data cannot tell a sale from a closure

A business that is sold and keeps operating is not a firm death in BDS, and a firm that disappears through a merger is not either. The count of closures is a count of firms whose operations stopped, whatever the owner tried first.

The BDS codebook defines a firm death narrowly: all establishments must exit, and a firm with 100 establishments does not count as a death if 99 close and one continues under different ownership. Legal entities that end through merger and acquisition are excluded.

BDS has no field for why a firm closed or whether the owner tried to sell. So the data cannot say how many of the established firms that closed were offered for sale, failed to sell, or were shut by choice. This report gives no estimate of that number.

The BLS establishment survival table gives the long view at the establishment level. Of 715,597 private establishments that opened in the year to March 2006, 132,860 were still operating in March 2026, a 20-year survival rate of 18.6 percent. For opening years 1994 to 2006, 20-year survival ranged from 18.6 to 21.0 percent.

Almost every closing employer firm is small

Using employment in the March before the closure, 99.98 percent of 2023 firm deaths were firms with fewer than 500 employees, and most had fewer than five.

Firms with 1 to 4 employees in March 2022 accounted for 412,013 of the 2023 firm deaths (78.6 percent) but 25.8 percent of the jobs. Firms with fewer than 20 employees accounted for 501,052 deaths, 95.6 percent.

Firms with 20 to 99 employees were only 4.0 percent of deaths (21,022 firms) but 28.6 percent of the jobs at firm deaths. These counts cover employer firms only; for the size of the business population, including owner-only firms, see our report on how many small businesses there are.

Momentum and share analysis

Download the calculations (CSV)

Findings to track

1. 523,958 US employer firms closed in the year to March 2023, with 2,686,413 jobs (BDS 2023 release, first print).^[1]
2. 450,039 US employer firms closed in the year to March 2022, with 2,474,349 jobs (revised).^[1]
3. 96,636 of the 2023 US firm deaths (18.4 percent) were firms aged 21 years or more.^[2]
4. US firms aged 21 or more that closed in 2023 had 721,000 jobs, 26.8 percent of jobs at all firm deaths.^[2]
5. 13,422 US firms born before 1977 closed in 2023, averaging 11.3 jobs each.^[2]
6. US firms aged 21 or more closed at 59.6 per 1,000 in 2023, against 93.4 per 1,000 for all firms aged one or more.^[2][1]
7. The established-to-all death-rate ratio in the US rose from 0.54 in 1998 to 0.64 in 2023.^[2][1]
8. 782,122 US firms aged 21 or more closed from 2014 to 2023, with 6,123,377 jobs.^[2]
9. First-print US firm-death counts were revised down 13.1 percent (2021) and 7.3 percent (2022) by the BDS 2023 release.^[1][10][11]
10. Colorado had the highest 2023 death rate for firms aged 21 or more, 67.9 per 1,000; the District of Columbia had the lowest, 37.4.^[3]
11. Professional, scientific and technical services had the most US established-firm deaths in 2023: 12,975.^[4]
12. 99.98 percent of 2023 US firm deaths were firms with fewer than 500 employees in March 2022.^[5]
13. 18.6 percent of US private establishments opened in the year to March 2006 were still operating in March 2026.^[16]

Frequently asked questions

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Reproduce this analysis

Every figure comes from the files below. The scripts that pulled and computed them are kept with the report and can be re-run.

Data quality and exclusions

• Checked that the 12 firm-age classes sum to the published national firm-death total in all 46 years of bds2023_fa.csv (0 mismatches).
• Excluded 508,777 age-0 firms from the 2023 all-age death-rate base because age-0 firm deaths are structurally impossible (flag X).
• The 26+ class is flagged X (structurally empty) from 1998 to 2002; it was treated as empty, not zero-by-suppression, because those firms sit in the born-before-1977 class.
• Found 0 D or S flags in the state cells used (firm age 21+, 2019 to 2023), so no state was dropped.
• One initial-size class (5,000 to 9,999 employees) is suppressed (D) for 2023; it is shown as D and left out of size subtotals, not set to zero.
• State deaths of firms aged 21+ sum to 97,660 and sector deaths to 97,163, against a national 96,636; the gaps are multi-state and multi-sector firms counted more than once, so no state or sector totals were added up.
• Puerto Rico (state code 72) is published in separate files from the 2023 release and is not in the 50-state-plus-DC ranking.

Methodology

Source selection. Every figure on firm deaths comes from the Census Bureau's Business Dynamics Statistics, 2023 release (published September 25, 2025), downloaded as CSV from www2.census.gov on 2026-11-02: the economy-wide, firm age, state by firm age, sector by firm age and initial firm size files. The BDS 2021 and 2022 releases were downloaded only to measure revisions. The 20-year survival figures come from the BLS Business Employment Dynamics establishment survival table, last modified October 28, 2026.

Definitions. A firm death is a firm whose establishments all went from positive employment in the prior March to zero in the reference March (BDS codebook). Established means firm age 21 or more: the BDS classes 21 to 25, 26+ and Left Censored (born before 1977). From 1998 on, every Left Censored firm is at least 21, so the 21+ group is complete; the tracker starts in 1998 for that reason. Jobs are the BDS field firmdeath_emp, defined as employment associated with firm deaths.

Rates. Deaths per 1,000 = deaths in the age group / (firms in that age group in the reference March + deaths) x 1,000. The firm count published for a year leaves out the firms that died during it, so deaths are added back to approximate the firms operating at the start of the year. Age-0 firms are left out because they cannot record a death. Other analyses that keep age-0 firms in the base report lower all-age rates; The Lonely Entrepreneur, for example, reports 8.6 percent for 2023.

Inclusion and exclusion. Suppression flags (D, S, X, N) are never treated as zero. One initial-size class (5,000 to 9,999 employees) is suppressed in 2023 and shown as D. State and sector rows are used as published; because multi-state and multi-sector firms are counted in each state or sector, state and sector totals exceed the national count and are not added up.

Conflicting numbers. Where releases disagree, the BDS 2023 release is used for every year. Earlier releases appear only in the revision table. Secondary sources (The Lonely Entrepreneur, an SBA fact sheet reprint) are Tier 3 context and were checked against the BDS files.

Derived metrics. Every calculation is in scripts/compute.py, which reads only the files in raw/ and writes the table CSVs; derived_metrics.csv lists each formula and its fact sheet inputs.

Last updated 2026-11-02. The tracker will be refreshed when Census posts BDS 2024. Sell My Business Broker introduces business owners to brokers and is not itself a broker.

This report presents published data with its limitations. It is not legal, financial or investment advice.

Sources, ranked by quality

Tier 1: primary and official sources (21)

• [1] U.S. Census Bureau. Business Dynamics Statistics 2023 release: economy-wide time series (bds2023.csv). 1978 to 2023. Accessed 2026-11-02.
• [2] U.S. Census Bureau. Business Dynamics Statistics 2023 release: firm age time series (bds2023_fa.csv). 1978 to 2023. Accessed 2026-11-02.
• [3] U.S. Census Bureau. Business Dynamics Statistics 2023 release: state by firm age (bds2023_st_fa.csv). 1978 to 2023. Accessed 2026-11-02.
• [4] U.S. Census Bureau. Business Dynamics Statistics 2023 release: sector by firm age (bds2023_sec_fa.csv). 1978 to 2023. Accessed 2026-11-02.
• [5] U.S. Census Bureau. Business Dynamics Statistics 2023 release: initial firm size (bds2023_ifz.csv). 1978 to 2023. Accessed 2026-11-02.
• [6] U.S. Census Bureau. BDS Codebook and Glossary (2023 Release). 2023 release. Accessed 2026-11-02.
• [7] U.S. Census Bureau. BDS Methodology. page revised 2026-06-18. Accessed 2026-11-02.
• [8] U.S. Census Bureau. 2023 Business Dynamics Statistics (BDS) Release Notes. 2023 release. Accessed 2026-11-02.
• [9] U.S. Census Bureau. BDS Updates (release announcements). page revised 2025-09-22. Accessed 2026-11-02.
• [10] U.S. Census Bureau. Business Dynamics Statistics 2022 release: economy-wide time series (bds2022.csv). 1978 to 2022. Accessed 2026-11-02.
• [11] U.S. Census Bureau. Business Dynamics Statistics 2021 release: economy-wide time series (bds2021.csv). 1978 to 2021. Accessed 2026-11-02.
• [12] U.S. Census Bureau. Business Dynamics Statistics 2022 release: firm age time series (bds2022_fa.csv). 1978 to 2022. Accessed 2026-11-02.
• [13] U.S. Census Bureau. Business Dynamics Statistics 2021 release: firm age time series (bds2021_fa.csv). 1978 to 2021. Accessed 2026-11-02.
• [14] U.S. Census Bureau. BDS variable definitions (variables_bds.csv). 2023 release. Accessed 2026-11-02.
• [15] U.S. Census Bureau. BDS publication flags (label_flags.csv) and firm age labels (label_fage.csv). 2023 release. Accessed 2026-11-02.
• [16] U.S. Bureau of Labor Statistics. Business Employment Dynamics, Table 7: Survival of private sector establishments by opening year. March 1994 to March 2026. Accessed 2026-11-02.
• [17] U.S. Bureau of Labor Statistics. Establishment Age and Survival Data. page modified 2026-10-28. Accessed 2026-11-02.
• [18] U.S. Census Bureau. Business Dynamics Statistics program page. 1978 to 2023. Accessed 2026-11-02.
• [19] U.S. Census Bureau. BDS sector labels (label_sector.csv). 2017 NAICS. Accessed 2026-11-02.
• [23] U.S. Census Bureau. BDS updates directory listing (release note file dates). 2020 to 2025 releases. Accessed 2026-11-02.
• [24] U.S. Census Bureau. BDS time-series directory listing (latest release folder). release folders 2018 to 2023. Accessed 2026-11-02.

Tier 3: journalism and expert commentary (3)

• [20] The Lonely Entrepreneur. Half the Businesses That Closed Last Year Had Been Open Six Years or More. 2023 (BDS 2023 release). Accessed 2026-11-02.
• [21] The Lonely Entrepreneur. A Young Business Is About a Fifth Less Likely to Close in Any Given Year Than in the 1980s. 1983 to 2023 (BDS 2023 release). Accessed 2026-11-02.
• [22] CAMEO (California Association for Micro Enterprise Opportunity). Small Business Facts: Why Do Businesses Close? (SBA Office of Advocacy fact sheet, reprinted). about 25 years to 2018. Accessed 2026-11-02.