MANCHESTER, NH – New Hampshire is 38th among the 50 states and Washington, D.C., for five-year survival of businesses that opened in 2024, according to a new analysis.
Less than half of New Hampshire businesses established in 2019 were still around last year, according to the study by Ringy, a Colorado-based software company. The study looked at how states ranked for five-year survival of private businesses that opened between March 2018-2019.
Some 3,818 small businesses were established in New Hampshire in the 12 months that ended March 31, 2019. By March 31, 2024, only 1,868 of those businesses were still in operation, for a 48.9% survival rate.
That’s below the 51% national average, and well below four of the six New England states.
Connecticut was 2nd, with a 57.5% survival rate; Massachusetts was at 13, with a 53.8% five-year success rate; Maine, 16 (tied with Texas), 53%; and Vermont, 26, for 51.4%. The only New England state in which new businesses fared worse than New Hampshire in that five-year period was Rhode Island, with a 48.2% survival rate, giving it a rank of 42.
New Hampshire lags behind neighbors
In fact, a further Ink Link look at the Bureau of Labor Statistics’ Business Employment Dynamics dataset that the Ringy study used shows that New Hampshire chronically lags behind most of New England when it comes to small business success.
The Ink Link analysis also looked at the 30, 25, 20, 15, and 10-year marks, and New Hampshire ranks last, or second to last, for each one.
The pattern is generally the same over the decades, with Maine, Massachusetts and Vermont vying for the best rates, with Connecticut sometimes also a contender and Rhode Island and New Hampshire trading off the bottom two spots.
Maine gets the longevity prize – 17% of businesses that opened in 1994 are still open, followed by Vermont, 16.6%; Connecticut, 16.4%; New Hampshire and Massachusetts tied at 15.6%; and Rhode Island last at 14%.
West Virginia is at top
In the Ringy analysis, the state where businesses that opened in 2019 had the most success was West Virginia, with a 57.6% rate – 1,534 out of 2,668 businesses surviving. Connecticut was second, at 57.5% — 4,184 out of 7,272 still doing business.
Businesses in Washington state had the worst luck – 41.1%, with 9,183 out of 22,326 still around. [For a full list, go to bottom of article]
“This analysis shows that the success of a new business can vary significantly based on location,” said Carlos J. Correa, Ringy chief operating officer. “New entrepreneurs should consider these survival rates when deciding where to establish their operations.”
He said that the states where businesses are more successful “appear to offer environments conducive to long-term business success. “These findings could be attributed to factors such as lower operating costs, less competition, or more supportive local policies,” Correa said, in a news release reporting the study.
The five-year mark “represents a critical milestone for new businesses,” the release noted. “Companies that survive their first five years have typically established solid customer bases and operational efficiencies that position them for continued growth.”
The analysis found that there was some correlation between total businesses opened and survival rates. States that a lower number of openings, in many cases, had higher survival rates than states with had big numbers of business openings. For instance, Alaska, with 1,071 openings, and West Virginia, with 2,663, had survival rates of 57.6% and 56%, respectively. At the other end of the spectrum, Florida, with 64,120 business openings, and New York, with 42,471, had survival rates of 50.1% and 49.5%.
But that didn’t hold across the board. For instance, California had 139,250, by far the most business openings in 2019, and a survival rate of 54.6%, while Wyoming had 1,840 and a rate of 47.5%.
And New Hampshire, with 3,818 openings and a survival rate of 48.9%, was only one of four states and the District of Columbia with 4,000 or fewer openings below the 50% mark, which included 17 states and D.C.
Pandemic business success
The study only looked at 2024 compared to 2019, but Ink Link’s look at the years in between found that the earliest years are the riskier for a new business.
Of those that opened in New Hampshire in 2019, 76.8% were around in March 2020, so nearly a quarter had failed. But of those, 86% were still around in 2021. And in March 2022, 90.9% of those that had survived the previous year were still around.
The 60% three-year New Hampshire three-year survival rate (2022), is higher than the three-year mark for business that opened in earlier years.
Pandemic-era financial programs, including the Paycheck Protection Program, the Economic Injury Disaster Loan and state and local aid, much of it funded with federal grants, helped keep many businesses from closing, according to an analysis by the Federal Reserve.
Four and five-year survival percentages are also higher than those for businesses that opened earlier. Even though only 48.9% of businesses that opened in 2019 were still open five years later, in 2014 it was 47%; in 2015, 45.6%; in 2016, 46.5%; in 2017, 47.6%; and in 2018, 46%.
Still, as with the other regional numbers, New Hampshire didn’t do as well as four of its New England neighbors in the post-pandemic years. [See chart below]