Video: Tennessee businesses optimistic despite economic uncertainty, survey finds
NASHVILLE, Tenn. (WKRN) — It’s not easy to keep a business going in Tennessee, according to a new study from LendingTree.
LendingTree analyzed data from the U.S. Bureau of Labor Statistics collected as recently as March 2025. When comparing each state’s first-year business failure rate, the study found Tennessee had the second-highest in the U.S. — 29.3% of businesses failed in their first year.
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Not only is the first year difficult, but the report found that more than half fail after five years and more than two-thirds fail after a decade.
Tennessee came in second only to Washington, D.C. for failure rates within the first year. Delaware, Oregon and Oklahoma rounded out the top five states with the highest rate of businesses that fail within the first year. On the other end of the spectrum, Washington, South Carolina, Louisiana, California and Iowa had the lowest rates of failure within the first year.
“Starting a business is hard and incredibly risky,” LendingTree’s Chief Consumer Finance Analyst, Matt Schulz, said. “If you don’t have a plan for the audience you’re targeting and what problem you’re helping those people solve, your odds of success just get smaller and smaller.”
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Though the study did not break down which industries had the highest failure rates in Tennessee specifically, nationwide, LendingTree reported that information businesses were the most likely to fail within the first year. Professional, scientific and technical services followed shortly behind.
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