National Tax Service Analyzes Top 100 Daily-Life Business Sectors
6 Out of 10 Businesses Close Within Five Years
Higher Closure Rates for Telecommunications Retail, Snack Bars, and Chicken Shops
Amid a severe domestic economic downturn, a growing number of self-employed businesses are shutting down, with data showing that 6 out of 10 self-employed businesses close within five years of opening. Survival rates were relatively low for businesses such as telecommunications retail, snack bars, chicken and pizza shops, while hair salons, guesthouses, and private academies recorded the highest survival rates.
The National Tax Service analyzed statistics on the top 100 daily-life business sectors over the past five years (2019?2023) and published survival rate statistics?which indicate the proportion of businesses that continue operating after startup?on the National Tax Statistics Portal on April 29. The top 100 daily-life business sectors refer to retail, food and beverage, and accommodation businesses that provide goods or services closely related to everyday life.
According to the data, the one-year survival rate for the top 100 daily-life business sectors stood at 77.9% as of 2023. The rate had risen from 2019 to 2022 but dipped slightly in 2023. The three-year survival rate was 53.8% in 2023, and the five-year survival rate was 39.6%. This means that half of businesses survived three years after startup, and only 4 out of 10 remained after five years.
Among the top 20 sectors with the highest number of new businesses, hair salons had the highest one-year survival rate at 91.1%. This was followed by guesthouses (90.8%), and convenience stores (90.3%). In contrast, telecommunications retail (69.8%), cosmetics shops (74.2%), and grocery stores (77.3%) had lower survival rates. Specifically, 30.2%, 25.8%, and 22.7% of these businesses, respectively, closed within one year of opening.
Three-year survival rates were also high for hair salons (73.4%) and guesthouses (73.1%). Private academies (70.1%) also exceeded 70%. These figures are significantly higher than the average three-year survival rate for the top 100 daily-life business sectors (53.8%). Sectors with the lowest three-year survival rates were telecommunications retail (45.7%), snack bars (46.6%), and fast-food outlets such as chicken and pizza shops (46.8%).
Survival rates also varied among key neighborhood business sectors. Bakeries had the highest three-year survival rate at 58.5%, followed by coffee and beverage shops at 53.2%, pizza and hamburger specialty shops at 51.0%, and chicken specialty shops at 45.4%.
Detailed survival rate statistics for the top 100 daily-life business sectors can be found on the National Tax Statistics Portal. The National Tax Service plans to regularly publish these survival rate statistics in the future and is also considering including them in the National Tax Statistical Yearbook.
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