Assertion Supported AI assessment confidence: 95% certainty 4/5 debate potential 2/5

Rea: Small businesses go out of business at about 1% monthly

Eric Rea · EP 524: Podium Hits $1m MRR in 12 Months, $4m Raised with 6500 SMB Customers sub 1% Churn with CEO Eric Rea · Dec 30, 2016 · at 9:01

Eric Rea, co-founder and CEO of Podium, discusses small business churn dynamics and baseline failure rates.

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“Small businesses go out of business at about one percent monthly.”

quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →

The claim, plainly

Small businesses go out of business at a rate of about 1% monthly.

a quote alone can be ambiguous, so this restates it with the references and context of the conversation around it resolved. AI-written; the tape below the player is the source.

Assessment

Eric Rea's offhand estimate that small businesses go out of business at a rate of 'about 1% monthly' is well-supported by official macroeconomic and small business data. U.S. Small Business Administration (SBA) Office of Advocacy and Bureau of Labor Statistics (BLS) data available as of December 2016 show that approximately 10% to 12% of employer establishments close annually (averaging ~0.83% to 1.0% per month, with quarterly establishment death rates averaging ~2.5%). Furthermore, early-stage small businesses experience first-year closure rates of ~20% (~1.67% monthly) and 5-year failure rates around 50% (~10% annually).

SBA Office of Advocacy reports documented that roughly 10% to 12% of employer establishments close annually (500,000 to 600,000 closures out of ~5 to 6 million establishments), equivalent to ~0.83% to 1.0% monthly.
BLS and U.S. Census Bureau Business Dynamics Statistics (BDS) show historical annual establishment exit rates of 8.5% to 10% and quarterly death rates of ~2.5%.
First-year small business failure rates track around 20% (~1.67% monthly), averaging out across all age cohorts to roughly 10% annually.

Checked against

[1] forbes.com [2] moyak.com [3] github.io [4] thezebra.com [5] facebook.com [6] agiled.app [7] nih.gov [8] nih.gov

SBA Office of Advocacy small business closure rate annual statistics before 2016 "rate of about 1% monthly" OR "1% per month" "small business" "fail" OR "close" "Bureau of Labor Statistics" "establishment closures" "exit rate" "small business" 2014 OR 2015 OR 2016 "Frequently Asked Questions" "SBA" "Advocacy" "close each year" "survival" 2014 OR 2015 OR 2016

assessed as of 2026-09-02

This assessment is an AI reading of a public statement, made against the cited references with the confidence shown. It can be wrong. The quote, the tape and the references are all on this page; if something is off, use report an error below. full disclaimer →

Mentioned

small businesses

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Rea: Small businesses go out of business at about 1% monthly

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