{"content_id":"pfsbdhi37q","slug":"korea-startup-survival-rates-by-business-type","locale":"en","schema_type":"Report","category":"report","category_name":"Report","title":"Popular Startup Sectors and 3-Year Survival Rates Based on National Tax Statistics","summary":"Based on data from the National Tax Service’s list of the top 100 everyday business sectors, we’ve summarized the differences between popular startup sectors and their actual survival rates. The three-year survival rate is the first hurdle, with only about half of all startups making it past this mark; when choosing a business sector, it’s important to consider factors such as skills, assets, recurring demand, and fixed-cost structure.","key_points":["As of 2023, the three-year survival rate for the National Tax Service’s top 100 daily-life business sectors was 53.8%, and the five-year survival rate was 39.6%, indicating that the barriers to long-term survival are high.","The mail-order business is the industry that attracts the most new entrepreneurs, but due to low barriers to entry, it faces significant competition and profitability risks.","Businesses such as beauty salons, vacation rentals and guesthouses, academies, and laundromats tend to have relatively high survival rates due to a combination of technical skills, certifications, assets, and recurring demand.","Businesses that are easy to start—such as restaurants, bars, and online retailers—are vulnerable to labor costs, advertising expenses, production costs, and changes in the commercial district, which can lead to a lower three-year survival rate.","Before starting a business, you need to consider not only the industry’s average survival rate but also the commercial district, fixed costs, operating capital, competitive differentiation, and exit costs."],"content_markdown":"## Conclusion at a Glance\n\nThe types of businesses most commonly started in the startup market are not the same as those that survive the longest. According to data from the National Tax Service on the top 100 daily-life industries, sectors with low barriers to entry—such as mail-order sales—attract an overwhelming number of new entrepreneurs, but their survival rates tend to be below average. Conversely, industries that combine skills, certifications, assets, and recurring demand—such as beauty salons, vacation rentals and guesthouses, private academies, and laundromats—tend to endure relatively longer.\n\nThe key is simple. When choosing a business idea, you should prioritize whether it has “a structure capable of withstanding fixed costs and competition for three years” over “how easy it is to get started.”\n\n## Data Criteria and Interpretation Methods\n\nThis article is an analysis based on the National Tax Service’s data on the status of businesses in the top 100 daily-life industries, combined with the survival rate data for the past five years released by the National Tax Service in April 2025. The survival rate refers to the percentage of businesses that have continued operations without closing after a certain period following startup.\n\n| Indicator | Criteria | Figure | Interpretation |\n|---|---:|---:|---|\n| New Businesses in the Top 100 Daily-Life Sectors | As of the end of 2024 | 536,964 | The number of businesses newly entering daily-life sectors |\n| 1-Year Survival Rate for Top 100 Daily-Life Sectors | As of 2023 | 77.9% | The percentage of businesses that survived past the first year |\n| 3-Year Survival Rate for Top 100 Daily-Life Industries | As of 2023 | 53.8% | This means that only about half of entrepreneurs survive beyond the first three years |\n| 5-Year Survival Rate for the Top 100 Daily-Life Sectors | As of 2023 | 39.6% | Long-term survival is much more difficult than surviving the first three years |\n| 3-Year Survival Rate for Mail-Order Businesses | Based on industries of interest to new entrepreneurs in 2023 | Approximately 45% | A prime example of an industry that is easy to enter but difficult to compete in and generate sales |\n\nThere are also points to note. The fact that a business registration is active does not necessarily mean the business is profitable, generates sufficient income, or provides stable employment. Survival rates are merely the first filter for selecting an industry; one must also consider the commercial district, capital, operational capabilities, and differentiation strategies.\n\n## Why Are There More Entrepreneurs in Their 30s and 40s?\n\nIn the past, starting a business was strongly associated with livelihood-driven ventures undertaken after retirement. Recently, however, there has been a rise in side-hustle-style entrepreneurship, where people test the waters with online sales, reservation-based services, small retail stores, franchises, and specialized technical services while maintaining their day jobs.\n\nThere are four main reasons behind the surge in entrepreneurship among the 30s and 40s generation.\n\n1. Initial entry costs have decreased thanks to online platforms, Smart Store, social media marketplaces, delivery apps, and booking platforms.\n2. Demand has grown for “pipeline-style” startups aimed at generating cash flow in addition to a regular salary.\n3. Digital marketing and content creation skills have become key competitive advantages for small-scale startups.\n4. There has been a rise in industries—such as cafes, beauty, education, and online retail—where it is easy to monetize personal interests and skills.\n\nHowever, low entry costs also mean competitors can easily enter the market. In particular, while the mail-order business involves low offline rent and relatively simple startup procedures, entrepreneurs who cannot withstand the pressures of product sourcing, advertising costs, price competition, returns and customer service, platform fees, and inventory risk may end up as businesses with virtually no revenue.\n\n## Popular Industries and Sustainable Industries Are Different\n\nAs of the end of 2024, e-commerce accounted for the largest share of new startups in the lifestyle sector. This broadly includes sales and brokerage activities utilizing communication networks, such as online shopping malls, social media sales, Smart Store, open marketplaces, and overseas direct purchase agencies.\n\nAmong offline sectors, Korean restaurants emerged as the most common type of mass startup. Korean cuisine has high everyday demand, and its well-developed franchise system results in a large supply of startup opportunities. By age group, cafes, beauty salons, and online sales are prominent among younger people, while those in their 50s and older tend to gravitate toward industries requiring qualifications, assets, or an offline presence, such as real estate brokerage, lodging, and transportation.\n\n| Category | Reasons for High Startup Rates | Major Risks |\n|---|---|---|\n| E-commerce | Low capital requirements, no physical storefront, ability to utilize platforms | Advertising cost competition, low barriers to entry, potential for low actual sales |\n| Korean Restaurants | Everyday demand, franchise availability, familiar consumer market | Labor costs, food costs, dependence on commercial districts, long working hours |\n| Coffee Shops | Suitable for small-scale startups, easy to brand, popular among young people | Saturated commercial districts, rent, low average check size |\n| Hair Salons \u0026 Beauty Services | Skill-based, repeat customers, potential for personal branding | Dependence on skill level, time to build a client base, workforce management |\n| Real Estate Brokerage | License-based, many middle-aged entrants | Fluctuations in transaction volume, local economic conditions, building trust |\n\n## Common Characteristics of Industries with High 3-Year Survival Rates\n\nAmong general consumer-oriented industries—excluding professional services—sectors such as vacation rentals and guesthouses, hair salons, art academies, health clubs, and laundromats are reported to have relatively high 3-year survival rates. While figures may vary by industry depending on the scope of the data, the structural commonalities among the top-performing sectors are clear.\n\n| Industry | Example 3-Year Survival Rate from Provided Data | Reasons for High Survival Rate |\n|---|---:|---|\n| Vacation Rentals and Guesthouses | 75.8% | Asset-based operations; location and facilities serve as competitive advantages |\n| Hair Salons | 74.8% | Accumulation of technical expertise and a loyal customer base |\n| Art Schools | 69.2% | Recurring local demand and the ongoing nature of educational services |\n| Health Clubs | 68.9% | Potential for membership and subscription-based revenue models |\n| Laundromats | 68.6% | Essential daily services and recurring demand |\n\nAccording to a 2023 National Tax Service press release listing the top 20 industries of interest for new business startups, hair salons, vacation rentals and guesthouses, and tutoring academies are cited as the industries with the highest three-year survival rates. Conversely, mail-order businesses, snack bars, and fast-food restaurants are identified as sectors with low three-year survival rates.\n\n## Structural Reasons for Low Survival Rates in Certain Sectors\n\nStartup ideas that come easily to mind—such as restaurants, bars, and online sales—may actually have lower survival rates. This is because, even if the market appears large, competition is actually intense, prices are easily comparable, and it is difficult to maintain a competitive edge over the long term.\n\nIn the restaurant industry, in particular, the following conditions all come into play simultaneously:\n\n- There is a heavy burden of fixed and variable costs, such as rent, labor costs, food costs, and delivery fees.\n- Commercial districts and trends change rapidly.\n- If even one of the following factors—taste, service, table turnover, cost management, or review management—fails, profitability can deteriorate sharply.\n- Operational stability in the early stages may suffer unless the founder personally dedicates long hours to the business.\n\nThe same applies to online sales. Just because you don’t have a physical store doesn’t mean there are no costs. Product photos, product detail pages, advertising, shipping, returns, customer service, platform fees, and inventory turnover all determine profitability. Even if sales increase, actual profits may remain low if advertising costs and return rates are high.\n\n## 7 Things to Check Before Starting a Business\n\n| Check Item | Questions to Ask | Reason |\n|---|---|---|\n| Survival Rate | Is the 1-year, 3-year, and 5-year survival rate for this industry higher than average? | To assess the structural difficulty of the industry itself |\n| Fixed Costs | How much can you afford in monthly rent, labor costs, loan interest, and management fees? | Business closures often result from cash flow depletion rather than insufficient revenue |\n| Repeat Demand | Is it possible to build a base of regular customers, subscriptions, repeat visits, and recurring payments? | Repeat revenue is more conducive to survival than one-time sales |\n| Differentiation | Is there a reason for customers to return beyond price? | Long-term survival is difficult through price competition alone |\n| Founder’s Capabilities | Do you possess the necessary skills, qualifications, operational experience, and marketing capabilities? | These personal factors enable you to last longer than the industry average |\n| Commercial District | What is the actual purchasing demand and density of competing stores, rather than just foot traffic? | Even with high foot traffic, revenue won’t materialize if your target customers aren’t there |\n| Exit Costs | In the event of failure, how much will be lost in excess inventory, penalty fees, and key money? | Setting a loss limit in advance preserves the possibility of trying again |\n\n## Realistic Startup Strategies Based on Data\n\nFirst, the easier it is to start a business, the more important it is to test it on a small scale. For industries with low barriers to entry—such as online retail, unmanned stores, and small cafes—it’s safer to start as a side business or on an experimental scale until you’ve confirmed that the revenue can supplement your main job.\n\nSecond, skills and certifications can serve as a protective shield that increases survival rates. Industries where the entrepreneur’s expertise and trust build over time—such as beauty salons, tutoring centers, laundry services, and real estate brokerage—are more likely to attract long-term customers than simply trendy sectors.\n\nThird, for asset-based businesses, the rent structure must be examined closely. Even in industries with high survival rates—such as vacation rentals and guesthouses—profits and losses can vary significantly depending on whether the business owns the land or building, the size of any loans, local tourism demand, and seasonality. Entering the market based solely on survival rates is risky.\n\nFourth, you should set a conservative benchmark of at least one year’s worth of operating capital. If you spend all your funds on initial interior design and equipment, you’ll run out of cash before revenue stabilizes. Separate startup costs from operating expenses, and calculate the cash flow needed to sustain the business until you reach the break-even point.\n\nFifth, prioritize your own circumstances over industry averages. Even within the same “café” category, a takeout shop near a train station, a dessert shop in a residential area, a roastery, and an unstaffed store are completely different businesses. While the average survival rate provides a general direction, the final decision must be based on location, concept, operational capabilities, and financial structure.\n\n## The Exact Meaning of “Surviving 3 Years Places You in the Top 50%”\n\nThe fact that the three-year survival rate for the top 100 daily-life industries is 53.8% means that nearly half of all entrepreneurs exit the market within three years. Therefore, making it past the three-year mark is clearly an important first hurdle.\n\nHowever, surviving three years does not guarantee success. Even if a business remains registered, the founder may be earning a take-home pay below the minimum wage, burdened by loans, or relying on family labor. A sound assessment of a startup involves comparing survival rates, operating profit margins, payback periods, working hours, and scalability.\n\n## Conclusion\n\nStarting a business is a battle of structure, not just enthusiasm. An industry attracting many new entrepreneurs may signal market potential, but it can also indicate overheated competition. Industries with high three-year survival rates generally possess defensive strengths such as technology, certifications, assets, recurring demand, and low fixed costs.\n\nProspective entrepreneurs should check national tax statistics and commercial district data rather than jumping on trendy business ideas; they should validate their concept on a small scale and establish a cash flow that can sustain them for at least one year before entering the market. The ability to survive long-term in the self-employment market comes from data and one’s own distinct competitive advantages, rather than vague confidence.","content_html":"\u003ch2\u003e\u003ca href=\"#conclusion-at-a-glance\" class=\"anchor\" id=\"conclusion-at-a-glance\"\u003e\u003c/a\u003eConclusion at a Glance\u003c/h2\u003e\n\u003cp\u003eThe types of businesses most commonly started in the startup market are not the same as those that survive the longest. According to data from the National Tax Service on the top 100 daily-life industries, sectors with low barriers to entry—such as mail-order sales—attract an overwhelming number of new entrepreneurs, but their survival rates tend to be below average. Conversely, industries that combine skills, certifications, assets, and recurring demand—such as beauty salons, vacation rentals and guesthouses, private academies, and laundromats—tend to endure relatively longer.\u003c/p\u003e\n\u003cp\u003eThe key is simple. When choosing a business idea, you should prioritize whether it has “a structure capable of withstanding fixed costs and competition for three years” over “how easy it is to get started.”\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#data-criteria-and-interpretation-methods\" class=\"anchor\" id=\"data-criteria-and-interpretation-methods\"\u003e\u003c/a\u003eData Criteria and Interpretation Methods\u003c/h2\u003e\n\u003cp\u003eThis article is an analysis based on the National Tax Service’s data on the status of businesses in the top 100 daily-life industries, combined with the survival rate data for the past five years released by the National Tax Service in April 2025. The survival rate refers to the percentage of businesses that have continued operations without closing after a certain period following startup.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eIndicator\u003c/th\u003e\n\u003cth\u003eCriteria\u003c/th\u003e\n\u003cth\u003eFigure\u003c/th\u003e\n\u003cth\u003eInterpretation\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eNew Businesses in the Top 100 Daily-Life Sectors\u003c/td\u003e\n\u003ctd\u003eAs of the end of 2024\u003c/td\u003e\n\u003ctd\u003e536,964\u003c/td\u003e\n\u003ctd\u003eThe number of businesses newly entering daily-life sectors\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e1-Year Survival Rate for Top 100 Daily-Life Sectors\u003c/td\u003e\n\u003ctd\u003eAs of 2023\u003c/td\u003e\n\u003ctd\u003e77.9%\u003c/td\u003e\n\u003ctd\u003eThe percentage of businesses that survived past the first year\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3-Year Survival Rate for Top 100 Daily-Life Industries\u003c/td\u003e\n\u003ctd\u003eAs of 2023\u003c/td\u003e\n\u003ctd\u003e53.8%\u003c/td\u003e\n\u003ctd\u003eThis means that only about half of entrepreneurs survive beyond the first three years\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5-Year Survival Rate for the Top 100 Daily-Life Sectors\u003c/td\u003e\n\u003ctd\u003eAs of 2023\u003c/td\u003e\n\u003ctd\u003e39.6%\u003c/td\u003e\n\u003ctd\u003eLong-term survival is much more difficult than surviving the first three years\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3-Year Survival Rate for Mail-Order Businesses\u003c/td\u003e\n\u003ctd\u003eBased on industries of interest to new entrepreneurs in 2023\u003c/td\u003e\n\u003ctd\u003eApproximately 45%\u003c/td\u003e\n\u003ctd\u003eA prime example of an industry that is easy to enter but difficult to compete in and generate sales\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThere are also points to note. The fact that a business registration is active does not necessarily mean the business is profitable, generates sufficient income, or provides stable employment. Survival rates are merely the first filter for selecting an industry; one must also consider the commercial district, capital, operational capabilities, and differentiation strategies.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#why-are-there-more-entrepreneurs-in-their-30s-and-40s\" class=\"anchor\" id=\"why-are-there-more-entrepreneurs-in-their-30s-and-40s\"\u003e\u003c/a\u003eWhy Are There More Entrepreneurs in Their 30s and 40s?\u003c/h2\u003e\n\u003cp\u003eIn the past, starting a business was strongly associated with livelihood-driven ventures undertaken after retirement. Recently, however, there has been a rise in side-hustle-style entrepreneurship, where people test the waters with online sales, reservation-based services, small retail stores, franchises, and specialized technical services while maintaining their day jobs.\u003c/p\u003e\n\u003cp\u003eThere are four main reasons behind the surge in entrepreneurship among the 30s and 40s generation.\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eInitial entry costs have decreased thanks to online platforms, Smart Store, social media marketplaces, delivery apps, and booking platforms.\u003c/li\u003e\n\u003cli\u003eDemand has grown for “pipeline-style” startups aimed at generating cash flow in addition to a regular salary.\u003c/li\u003e\n\u003cli\u003eDigital marketing and content creation skills have become key competitive advantages for small-scale startups.\u003c/li\u003e\n\u003cli\u003eThere has been a rise in industries—such as cafes, beauty, education, and online retail—where it is easy to monetize personal interests and skills.\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eHowever, low entry costs also mean competitors can easily enter the market. In particular, while the mail-order business involves low offline rent and relatively simple startup procedures, entrepreneurs who cannot withstand the pressures of product sourcing, advertising costs, price competition, returns and customer service, platform fees, and inventory risk may end up as businesses with virtually no revenue.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#popular-industries-and-sustainable-industries-are-different\" class=\"anchor\" id=\"popular-industries-and-sustainable-industries-are-different\"\u003e\u003c/a\u003ePopular Industries and Sustainable Industries Are Different\u003c/h2\u003e\n\u003cp\u003eAs of the end of 2024, e-commerce accounted for the largest share of new startups in the lifestyle sector. This broadly includes sales and brokerage activities utilizing communication networks, such as online shopping malls, social media sales, Smart Store, open marketplaces, and overseas direct purchase agencies.\u003c/p\u003e\n\u003cp\u003eAmong offline sectors, Korean restaurants emerged as the most common type of mass startup. Korean cuisine has high everyday demand, and its well-developed franchise system results in a large supply of startup opportunities. By age group, cafes, beauty salons, and online sales are prominent among younger people, while those in their 50s and older tend to gravitate toward industries requiring qualifications, assets, or an offline presence, such as real estate brokerage, lodging, and transportation.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eReasons for High Startup Rates\u003c/th\u003e\n\u003cth\u003eMajor Risks\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eE-commerce\u003c/td\u003e\n\u003ctd\u003eLow capital requirements, no physical storefront, ability to utilize platforms\u003c/td\u003e\n\u003ctd\u003eAdvertising cost competition, low barriers to entry, potential for low actual sales\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eKorean Restaurants\u003c/td\u003e\n\u003ctd\u003eEveryday demand, franchise availability, familiar consumer market\u003c/td\u003e\n\u003ctd\u003eLabor costs, food costs, dependence on commercial districts, long working hours\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eCoffee Shops\u003c/td\u003e\n\u003ctd\u003eSuitable for small-scale startups, easy to brand, popular among young people\u003c/td\u003e\n\u003ctd\u003eSaturated commercial districts, rent, low average check size\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eHair Salons \u0026amp; Beauty Services\u003c/td\u003e\n\u003ctd\u003eSkill-based, repeat customers, potential for personal branding\u003c/td\u003e\n\u003ctd\u003eDependence on skill level, time to build a client base, workforce management\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eReal Estate Brokerage\u003c/td\u003e\n\u003ctd\u003eLicense-based, many middle-aged entrants\u003c/td\u003e\n\u003ctd\u003eFluctuations in transaction volume, local economic conditions, building trust\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#common-characteristics-of-industries-with-high-3-year-survival-rates\" class=\"anchor\" id=\"common-characteristics-of-industries-with-high-3-year-survival-rates\"\u003e\u003c/a\u003eCommon Characteristics of Industries with High 3-Year Survival Rates\u003c/h2\u003e\n\u003cp\u003eAmong general consumer-oriented industries—excluding professional services—sectors such as vacation rentals and guesthouses, hair salons, art academies, health clubs, and laundromats are reported to have relatively high 3-year survival rates. While figures may vary by industry depending on the scope of the data, the structural commonalities among the top-performing sectors are clear.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eIndustry\u003c/th\u003e\n\u003cth\u003eExample 3-Year Survival Rate from Provided Data\u003c/th\u003e\n\u003cth\u003eReasons for High Survival Rate\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eVacation Rentals and Guesthouses\u003c/td\u003e\n\u003ctd\u003e75.8%\u003c/td\u003e\n\u003ctd\u003eAsset-based operations; location and facilities serve as competitive advantages\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eHair Salons\u003c/td\u003e\n\u003ctd\u003e74.8%\u003c/td\u003e\n\u003ctd\u003eAccumulation of technical expertise and a loyal customer base\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eArt Schools\u003c/td\u003e\n\u003ctd\u003e69.2%\u003c/td\u003e\n\u003ctd\u003eRecurring local demand and the ongoing nature of educational services\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eHealth Clubs\u003c/td\u003e\n\u003ctd\u003e68.9%\u003c/td\u003e\n\u003ctd\u003ePotential for membership and subscription-based revenue models\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eLaundromats\u003c/td\u003e\n\u003ctd\u003e68.6%\u003c/td\u003e\n\u003ctd\u003eEssential daily services and recurring demand\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eAccording to a 2023 National Tax Service press release listing the top 20 industries of interest for new business startups, hair salons, vacation rentals and guesthouses, and tutoring academies are cited as the industries with the highest three-year survival rates. Conversely, mail-order businesses, snack bars, and fast-food restaurants are identified as sectors with low three-year survival rates.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#structural-reasons-for-low-survival-rates-in-certain-sectors\" class=\"anchor\" id=\"structural-reasons-for-low-survival-rates-in-certain-sectors\"\u003e\u003c/a\u003eStructural Reasons for Low Survival Rates in Certain Sectors\u003c/h2\u003e\n\u003cp\u003eStartup ideas that come easily to mind—such as restaurants, bars, and online sales—may actually have lower survival rates. This is because, even if the market appears large, competition is actually intense, prices are easily comparable, and it is difficult to maintain a competitive edge over the long term.\u003c/p\u003e\n\u003cp\u003eIn the restaurant industry, in particular, the following conditions all come into play simultaneously:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eThere is a heavy burden of fixed and variable costs, such as rent, labor costs, food costs, and delivery fees.\u003c/li\u003e\n\u003cli\u003eCommercial districts and trends change rapidly.\u003c/li\u003e\n\u003cli\u003eIf even one of the following factors—taste, service, table turnover, cost management, or review management—fails, profitability can deteriorate sharply.\u003c/li\u003e\n\u003cli\u003eOperational stability in the early stages may suffer unless the founder personally dedicates long hours to the business.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eThe same applies to online sales. Just because you don’t have a physical store doesn’t mean there are no costs. Product photos, product detail pages, advertising, shipping, returns, customer service, platform fees, and inventory turnover all determine profitability. Even if sales increase, actual profits may remain low if advertising costs and return rates are high.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#7-things-to-check-before-starting-a-business\" class=\"anchor\" id=\"7-things-to-check-before-starting-a-business\"\u003e\u003c/a\u003e7 Things to Check Before Starting a Business\u003c/h2\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCheck Item\u003c/th\u003e\n\u003cth\u003eQuestions to Ask\u003c/th\u003e\n\u003cth\u003eReason\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eSurvival Rate\u003c/td\u003e\n\u003ctd\u003eIs the 1-year, 3-year, and 5-year survival rate for this industry higher than average?\u003c/td\u003e\n\u003ctd\u003eTo assess the structural difficulty of the industry itself\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eFixed Costs\u003c/td\u003e\n\u003ctd\u003eHow much can you afford in monthly rent, labor costs, loan interest, and management fees?\u003c/td\u003e\n\u003ctd\u003eBusiness closures often result from cash flow depletion rather than insufficient revenue\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eRepeat Demand\u003c/td\u003e\n\u003ctd\u003eIs it possible to build a base of regular customers, subscriptions, repeat visits, and recurring payments?\u003c/td\u003e\n\u003ctd\u003eRepeat revenue is more conducive to survival than one-time sales\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eDifferentiation\u003c/td\u003e\n\u003ctd\u003eIs there a reason for customers to return beyond price?\u003c/td\u003e\n\u003ctd\u003eLong-term survival is difficult through price competition alone\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eFounder’s Capabilities\u003c/td\u003e\n\u003ctd\u003eDo you possess the necessary skills, qualifications, operational experience, and marketing capabilities?\u003c/td\u003e\n\u003ctd\u003eThese personal factors enable you to last longer than the industry average\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eCommercial District\u003c/td\u003e\n\u003ctd\u003eWhat is the actual purchasing demand and density of competing stores, rather than just foot traffic?\u003c/td\u003e\n\u003ctd\u003eEven with high foot traffic, revenue won’t materialize if your target customers aren’t there\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eExit Costs\u003c/td\u003e\n\u003ctd\u003eIn the event of failure, how much will be lost in excess inventory, penalty fees, and key money?\u003c/td\u003e\n\u003ctd\u003eSetting a loss limit in advance preserves the possibility of trying again\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#realistic-startup-strategies-based-on-data\" class=\"anchor\" id=\"realistic-startup-strategies-based-on-data\"\u003e\u003c/a\u003eRealistic Startup Strategies Based on Data\u003c/h2\u003e\n\u003cp\u003eFirst, the easier it is to start a business, the more important it is to test it on a small scale. For industries with low barriers to entry—such as online retail, unmanned stores, and small cafes—it’s safer to start as a side business or on an experimental scale until you’ve confirmed that the revenue can supplement your main job.\u003c/p\u003e\n\u003cp\u003eSecond, skills and certifications can serve as a protective shield that increases survival rates. Industries where the entrepreneur’s expertise and trust build over time—such as beauty salons, tutoring centers, laundry services, and real estate brokerage—are more likely to attract long-term customers than simply trendy sectors.\u003c/p\u003e\n\u003cp\u003eThird, for asset-based businesses, the rent structure must be examined closely. Even in industries with high survival rates—such as vacation rentals and guesthouses—profits and losses can vary significantly depending on whether the business owns the land or building, the size of any loans, local tourism demand, and seasonality. Entering the market based solely on survival rates is risky.\u003c/p\u003e\n\u003cp\u003eFourth, you should set a conservative benchmark of at least one year’s worth of operating capital. If you spend all your funds on initial interior design and equipment, you’ll run out of cash before revenue stabilizes. Separate startup costs from operating expenses, and calculate the cash flow needed to sustain the business until you reach the break-even point.\u003c/p\u003e\n\u003cp\u003eFifth, prioritize your own circumstances over industry averages. Even within the same “café” category, a takeout shop near a train station, a dessert shop in a residential area, a roastery, and an unstaffed store are completely different businesses. While the average survival rate provides a general direction, the final decision must be based on location, concept, operational capabilities, and financial structure.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#the-exact-meaning-of-surviving-3-years-places-you-in-the-top-50\" class=\"anchor\" id=\"the-exact-meaning-of-surviving-3-years-places-you-in-the-top-50\"\u003e\u003c/a\u003eThe Exact Meaning of “Surviving 3 Years Places You in the Top 50%”\u003c/h2\u003e\n\u003cp\u003eThe fact that the three-year survival rate for the top 100 daily-life industries is 53.8% means that nearly half of all entrepreneurs exit the market within three years. Therefore, making it past the three-year mark is clearly an important first hurdle.\u003c/p\u003e\n\u003cp\u003eHowever, surviving three years does not guarantee success. Even if a business remains registered, the founder may be earning a take-home pay below the minimum wage, burdened by loans, or relying on family labor. A sound assessment of a startup involves comparing survival rates, operating profit margins, payback periods, working hours, and scalability.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#conclusion\" class=\"anchor\" id=\"conclusion\"\u003e\u003c/a\u003eConclusion\u003c/h2\u003e\n\u003cp\u003eStarting a business is a battle of structure, not just enthusiasm. An industry attracting many new entrepreneurs may signal market potential, but it can also indicate overheated competition. Industries with high three-year survival rates generally possess defensive strengths such as technology, certifications, assets, recurring demand, and low fixed costs.\u003c/p\u003e\n\u003cp\u003eProspective entrepreneurs should check national tax statistics and commercial district data rather than jumping on trendy business ideas; they should validate their concept on a small scale and establish a cash flow that can sustain them for at least one year before entering the market. The ability to survive long-term in the self-employment market comes from data and one’s own distinct competitive advantages, rather than vague confidence.\u003c/p\u003e\n","tags":["Startup","Self employment","Survival rate","Tax statistics","Industry selection"],"faqs":[{"question":"What does a 3-year survival rate of 53.8% mean?","answer":"This means that, as of 2023, among businesses in the National Tax Service’s top 100 daily-life industries that had been in operation for more than three years, 53.8% had remained in business without closing. This suggests that nearly half exit the market within three years."},{"question":"If I stick it out for three years, will I really be in the top 50%?","answer":"Strictly speaking, since the three-year survival rate as of 2023 is 53.8%, those who have survived three years make up slightly more than half of all founders. However, survival does not guarantee profitability or high income, so it is important to consider both profit and loss and cash flow."},{"question":"What is the most common type of business people start?","answer":"According to data on new businesses in the top 100 daily-life sectors as of the end of 2024, online retail accounts for the largest share. This category includes business models that allow for store-free, low-capital startups, such as online shopping malls, social media sales, Smart Store, open marketplaces, and overseas direct purchase agencies."},{"question":"Why do so many people start online retail businesses, yet the survival rate is so low?","answer":"While the low initial startup costs make it easy for anyone to get started, competition heats up just as quickly. If you can’t handle product differentiation, advertising costs, returns and customer service, inventory turnover, and platform fees, you may end up with little to no sales or no profit."},{"question":"Does a high survival rate automatically make a business a good startup idea?","answer":"No. Even in industries that appear to have high survival rates, such as bed-and-breakfasts and guesthouses, the level of risk varies significantly depending on whether the business owns assets, the size of its loans, its location, and seasonal demand. The survival rate is a reference indicator for assessing the structure of an industry; it is not an indicator of investment returns."},{"question":"Why do hair salons have such a high survival rate?","answer":"The beauty salon industry is one in which the owner’s technical expertise and customer trust accumulate over time. As regular customers and repeat visits increase, revenue volatility decreases, and the owner’s personal brand can serve as a competitive advantage, resulting in a relatively high survival rate."},{"question":"Why is it so hard for restaurants to survive for three years?","answer":"The restaurant industry faces significant cost burdens—including rent, labor costs, food costs, and delivery fees—and is highly sensitive to changes in commercial districts and trends. Even with excellent food and service, long-term survival is difficult unless table turnover, cost management, and review management all work in tandem."},{"question":"What data should I look at first before starting a business?","answer":"You should consider the 1-year, 3-year, and 5-year survival rates by industry, the number of businesses by region, the density of competing stores, the average length of operation, sales in the commercial district, and rent levels. It is advisable to cross-check data from the National Tax Statistics Portal, local government commercial district reports, and small business support organizations."},{"question":"Is starting a side business a safe choice?","answer":"Starting a side business can be a way to reduce initial risks, but it is not automatically safe. You must be able to handle the demands of managing it alongside your main job, including operating hours, advertising costs, inventory, tax filing, and customer service."},{"question":"How much startup capital should I set aside?","answer":"Although it varies by industry, it’s best to conservatively estimate operating expenses for at least 6 to 12 months in addition to startup costs. In particular, you must be able to cover rent, labor costs, loan interest, raw material costs, and advertising expenses even during the early stages when revenue is unstable."}],"sources":[{"url":"https://nts.go.kr/nts/na/ntt/selectNttInfo.do?bbsId=1028\u0026mi=2201\u0026nttSn=1342284","title":"National Tax Service Press Release: Starting a Business—The First Year Is the Crucial Stage! Survival Rates for Small Businesses According to National Tax Statistics","type":"source"},{"url":"https://eiec.kdi.re.kr/policy/materialView.do?num=266032","title":"KDI Center for Economic Education and Information Policy Brief: Starting a Business—The First Year Is the Crucial Test! Survival Rates in the Retail Sector According to National Tax Statistics","type":"source"},{"url":"https://www.nts.go.kr/webtv/na/ntt/selectNttInfo.do?mi=\u0026nttSn=1342649","title":"National Tax Service Web-TV: Survival Rates for the Top 100 Daily-Life Industries Over the Past Five Years Revealed","type":"source"},{"url":"https://sbdc.gm.go.kr/s52/23955","title":"Gwangmyeong City Self-Employed Support Center: Status of Businesses Nationwide—Top 100 Daily Life Sectors as of December 2024","type":"source"},{"url":"https://v.daum.net/v/9Bk7KUGhbn","title":"KT Estate/Daum: Popular Startups and Survival Rates Through Statistics","type":"source"}],"images":[{"id":80,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6Nzc5LCJwdXIiOiJibG9iX2lkIn19--8bb873e777e1fd7f3b9f052aa22cc32e37911743/ChatGPT%20Image%202026%E1%84%82%E1%85%A7%E1%86%AB%207%E1%84%8B%E1%85%AF%E1%86%AF%208%E1%84%8B%E1%85%B5%E1%86%AF%20%E1%84%8B%E1%85%A9%E1%84%8C%E1%85%A5%E1%86%AB%2009_31_34.webp","is_representative":true,"generation_method":"upload","mime_type":"image/webp","original_filename":"ChatGPT Image 2026년 7월 8일 오전 09_31_34.png","translations":{"ko":{"alt":"혼잡한 창업 시장에서 필터를 지나 안정적인 업종으로 이어지는 벡터 일러스트","caption":"많은 신규 창업 아이템과 오래 생존하는 업종의 차이를 필터와 상점 아이콘으로 보여준다.","description":null},"en":{"alt":"Vector scene showing crowded startup options filtered into stable surviving businesses","caption":"The illustration contrasts easy-entry startups with stronger businesses that survive through structure and repeat demand.","description":null},"ja":{"alt":"混雑した創業市場から安定した業種へ絞り込まれるベクターイラスト","caption":"参入しやすい創業分野と長く残る業種の違いを、店舗やフィルターの要素で表している。","description":null},"es":{"alt":"Ilustración vectorial de negocios iniciales que pasan por un filtro hacia empresas estables","caption":"La escena compara negocios fáciles de iniciar con actividades más sólidas que resisten mejor en el tiempo.","description":null},"id":{"alt":"Ilustrasi vektor pasar usaha ramai yang disaring menjadi bisnis lebih stabil","caption":"Gambar ini menunjukkan perbedaan antara usaha yang mudah dimulai dan bisnis yang lebih mampu bertahan.","description":null},"pt":{"alt":"Ilustração vetorial de startups numerosas filtradas em negócios mais estáveis","caption":"A cena compara negócios de entrada fácil com atividades mais estruturadas e resistentes ao longo do tempo.","description":null},"zh-hant":{"alt":"擁擠創業市場經篩選走向穩定業種的向量插畫","caption":"畫面以商店、漏斗與成長符號呈現熱門創業與長期存活業種的差異。","description":null}}},{"id":81,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6Nzg2LCJwdXIiOiJibG9iX2lkIn19--bcbdd099c472631e142db5cf76833e28caae7bc8/ChatGPT%20Image%202026%E1%84%82%E1%85%A7%E1%86%AB%207%E1%84%8B%E1%85%AF%E1%86%AF%208%E1%84%8B%E1%85%B5%E1%86%AF%20%E1%84%8B%E1%85%A9%E1%84%8C%E1%85%A5%E1%86%AB%2009_37_32.webp","is_representative":false,"generation_method":"upload","mime_type":"image/webp","original_filename":"ChatGPT Image 2026년 7월 8일 오전 09_37_32.png","translations":{"ko":{"alt":"창업 전 점검표를 중심으로 안정 업종과 위험 업종을 비교한 벡터 인포그래픽","caption":"점검표, 비용, 상권, 반복 수요, 위험 신호를 통해 창업 전 검토해야 할 요소를 보여준다.","description":null},"en":{"alt":"Vector infographic comparing stable and risky business types around a startup checklist","caption":"The scene shows startup planning factors such as costs, location, repeat demand, and risk signals.","description":null},"ja":{"alt":"創業チェックリストを中心に安定業種とリスク業種を比較するベクター図","caption":"費用、立地、リピート需要、警告要素など創業前に確認すべき点を表している。","description":null},"es":{"alt":"Infografía vectorial que compara negocios estables y riesgosos alrededor de una lista de control","caption":"La escena muestra factores de planificación como costos, ubicación, demanda recurrente y señales de riesgo.","description":null},"id":{"alt":"Infografik vektor yang membandingkan usaha stabil dan berisiko di sekitar daftar periksa","caption":"Ilustrasi ini menampilkan biaya, lokasi, permintaan berulang, dan sinyal risiko sebelum memulai usaha.","description":null},"pt":{"alt":"Infográfico vetorial comparando negócios estáveis e arriscados em torno de uma lista de verificação","caption":"A cena mostra custos, localização, demanda recorrente e sinais de risco na preparação de um negócio.","description":null},"zh-hant":{"alt":"以創業檢查表為中心比較穩定與高風險業種的向量資訊圖","caption":"畫面呈現成本、地點、回購需求與風險訊號等創業前評估要素。","description":null}}}],"published_at":"2026-07-08T10:05:37+09:00","updated_at":"2026-07-08T10:05:37+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant"],"url":"https://injoys.com/en/articles/korea-startup-survival-rates-by-business-type"}