Business closure rate in my area: count it yourself.
Finding the business closure rate in my area takes an hour, a phone map and honest counting. You count openings and closures of your exact business type over three years. Then you divide closures by openings to get your own outside view.
Pick the business and the ground.
First, choose the exact kind of business, not "food" but "a coffee shop" or "a nail salon." Then choose an area you could walk end to end without a map. Also, you need no research team, subscription or consultant. This is how to research local competition without spending money.
Three ways to count.
Open a map app and count open places and the ones marked "Permanently closed." That is the simplest way to count closed businesses nearby. Next, search the official register, such as Companies House in the UK or INEGI's DENUE in Mexico. Finally, walk the street and note which shopfronts changed hands in three years.
Turning the business closure rate in my area into a sentence.
Write down openings and closures, divide them, and put the ratio at the top of your plan. Then complete this: "My business will survive where these closed because ______." Use something specific, like more foot traffic or an unserved customer group. If you cannot fill it honestly, your fear may have done its job.
For context, INEGI reports that in Mexico about 31 of every 100 establishments die before their first birthday. Also, Parsa found roughly 26 per cent of independent Columbus restaurants closed in year one. However, your street is neither, so count it yourself.
Measure the business closure rate in my area tonight.
Search your business type on a map app and count open and permanently closed listings.
Write your closures divided by openings at the top of your business plan.
Questions about business closure rate in my area.
How do I calculate the business closure rate in my area?
Count openings and closures over roughly three years, then divide closures by openings.
Is the 90 per cent restaurant failure figure true?
In the Columbus study by Parsa and colleagues, roughly 26 per cent closed or changed hands in year one.
What if I cannot finish the survival sentence?
Then your fear may have just done its job for you, so listen to it.
Read the whole chapter.
This lesson covers one section of chapter 7, “When the coward is right”. The book goes further, with the full evidence, the stories and every exercise.
Lessons in this chapter.
- 01 Knowing when to quit a startup: why it is a skill.
- 02 Entrepreneur overconfidence bias: who is most wrong.
- 03 Scientific method for startups: let evidence decide.
- 04 Business closure rate in my area: count it yourself.
- 05 Aquinas on courage: why too little fear is a mistake.
- 06 Find closed businesses on maps: fixing bad counts.
- 07 When to abandon a business idea: a four-second lesson.