{"content_id":"wdwvvnreut","slug":"korea-self-employment-survival-rate-by-industry","locale":"en","schema_type":"Report","category":"report","category_name":"Report","title":"Survival Rates of Self-Employed Businesses Based on National Tax Statistics: Industries Where Half Disappear Within Three Years and Those That Endure","summary":"Statistics from the National Tax Service on the top 100 everyday business sectors show that the first one to three years are the most critical for new self-employed businesses. Sectors with low barriers to entry and intense competition have low survival rates, whereas those with expertise, location advantages, and steady demand tend to last relatively longer.","key_points":["As of 2024, the one-year survival rate for the top 100 consumer-oriented industries is approximately 77.0%, meaning that more than two out of every ten new entrepreneurs close their businesses within a year.","The three-year survival rate drops to approximately 52.3%, indicating that the first one to three years after starting a business are considered the critical survival period for self-employed individuals.","Industries such as online retail, which attract many entrepreneurs and have low barriers to entry, face intense competition and thus have a survival rate below the average.","Beauty salons, vacation rentals and guesthouses, and certain educational service sectors show relatively stable indicators based on their skills, assets, and recurring demand.","Before starting a business, you should first assess your fixed costs, break-even point, the level of competition in the market, and the likelihood of retaining repeat customers—all in relation to your projected revenue."],"content_markdown":"## Why Is “Survival Rate” the Top Priority When Starting a Small Business?\n\nWhen considering starting a business after retirement or pursuing a second career, many people first look at revenue potential, trending products, key money, and interior design costs. However, the most important metric to check in the actual small business market is the **survival rate**.\n\nSurvival rate refers to the percentage of businesses established at a specific point in time that are still in operation one, three, or five years later. This metric is not merely a measure of success; it also reveals the intensity of competition within the industry, the burden of fixed costs, the stability of demand, and vulnerability to changes in consumer patterns.\n\nBased on a synthesis of the National Tax Service’s statistics on the top 100 daily-life industries and related press releases, the Korean self-employment market experiences high attrition rates starting from the first year after launch, with only about half of businesses remaining by the third year. Therefore, entrepreneurs must first calculate “how long they can survive” rather than “how much they can earn.”\n\n## Key Indicators: 1-Year, 3-Year, and 5-Year Survival Rates\n\nAs of 2024, the survival rates for the Top 100 Daily Life Industries, as reported, can be summarized as follows.\n\n| Category | Survival Rate | Interpretation |\n|---|---:|---|\n| 1 Year After Launch | Approx. 77.0% | More than 2 out of 10 businesses close or cease operations within one year. |\n| 2 Years After Launch | Approx. 61.6% | Even after surviving the first year, a significant number of businesses drop out during the second year. |\n| 3 years after launch | Approx. 52.3% | Only about half make it past the 3-year mark. |\n| 4 years after launch | Approx. 45.3% | By the fourth year, fewer than half remain in business. |\n| 5 years after launch | Approx. 40.2% | Nearly 6 out of 10 businesses disappear within five years. |\n\nThese figures demonstrate that the risks of starting a small business are not limited to specific industries. In particular, the high closure rate in the first year indicates that poor initial sales, the burden of rent and labor costs, a lack of operational experience, and misjudgments about the commercial district quickly determine whether a business can survive.\n\n## What Are the Top 100 Daily Life Industries?\n\nThe National Tax Service’s “Top 100 Daily Life Industries” are compiled from sectors that sell or provide goods and services closely tied to people’s daily lives. They include restaurants, cafes, beauty salons, mail-order businesses, private academies, lodging, real estate brokerage, and various retail and service industries.\n\nThese statistics are important for the following reasons:\n\n- They cover industries that many individual entrepreneurs actually enter.\n- They allow for comparisons of the number of new business owners and survival rates by industry.\n- They serve as foundational data for assessing whether there is an oversaturation of startups by region, age group, and industry.\n- It is easily utilized for analyzing policies related to retirement-based startups, youth entrepreneurship, and small business owners.\n\nHowever, the survival rate is an indicator of whether a business “continued operations,” not a direct measure of whether it was sufficiently profitable. Even if a business survives, it may still be operating with low profits, high labor intensity, or a heavy debt burden.\n\n## Why Industries with Low Barriers to Entry Can Be Risky\n\nIn the self-employment sector, low barriers to entry mean that starting a business is easy, but it also means that anyone can enter the market, leading to rapidly intensifying competition.\n\nA prime example is **mail-order and online retail**. Industries that retail or broker products through online channels—such as online shopping malls, social media sales, and home shopping—appear to have lower initial setup costs than brick-and-mortar stores. However, in reality, product sourcing, advertising costs, platform fees, logistics, return processing, price competition, and review management all contribute to costs and risks.\n\nAccording to data provided by the operator, the number of new businesses in the e-commerce sector in 2024 exceeded 190,000—one of the highest figures—but the one-year survival rate was 67.7%, lower than the overall average. The three-year and five-year survival rates were reported at 44.7% and 34.6%, respectively, indicating that long-term survival in this industry is challenging.\n\n### Common Risks in Industries with Low Barriers to Entry\n\n| Risk | Description |\n|---|---|\n| Overcrowded Competition | The rapid proliferation of similar products and services intensifies price competition. |\n| Difficulty in Differentiation | Without a brand, technology, location, or exclusive supply chain, customers are likely to switch easily. |\n| Reliance on Advertising Costs | For online sales or delivery-based businesses, the cost of visibility can put pressure on profits. |\n| Trend Cycles | Items that enjoy fleeting popularity experience rapid market saturation and a sharp drop in demand. |\n| Low Customer Loyalty | A high proportion of customers make decisions based solely on price or convenience. |\n\n## Characteristics of Industries That Last Relatively Longer\n\nAccording to the data, industries with relatively high survival rates include hair salons, vacation rentals and guesthouses, travel agencies, and art academies, sports training centers, and tutoring centers. While this does not mean all these industries are risk-free, they share several common survival factors.\n\n### 1. Skill- or Qualification-Based Services\n\nFor hair salons, academies, and certain professional service industries, the business owner’s skills, experience, and customer trust act as barriers to entry. This structure tends to foster customer loyalty based on the individual and their expertise, rather than simply on the sale of a product.\n\n### 2. Recurring Demand or Long-Term Customer Relationships\n\nEducational services are considered an area where spending is difficult to cut drastically even during economic downturns. The relatively stable survival rates of arts academies, sports education institutions, tutoring centers and study rooms, and private tutoring academies can be attributed to repeat enrollment, local reputation, and parent networks.\n\n### 3. Reduced Fixed Costs Through Asset Ownership\n\nFor vacation rentals and guesthouses, the burden of rent can be reduced if the operator owns the land or building. While risks such as loan interest, facility maintenance costs, seasonal demand, and platform fees remain, this can sometimes provide an advantage for long-term sustainability compared to starting a business as a tenant.\n\n### 4. Local Community and Regular Customer Base\n\nFor hair salons, neighborhood tutoring centers, and daily life service businesses, repeat visits and customer referrals are crucial. Businesses that build social capital within the local community may have a better chance of long-term survival than those that rely solely on foot traffic.\n\n## Warning Signs for Industries with Low Survival Rates\n\nAccording to data provided by the operator, PC cafes, beer bars, snack bars, fast-food restaurants, and cell phone stores were identified as industries facing difficulties in terms of three-year survival rates.\n\nThese industries share several common characteristics.\n\n- They face significant burdens from rent and interior design costs.\n- They are highly dependent on foot traffic.\n- They are vulnerable to fluctuations in labor and raw material costs.\n- They are affected by competition from large franchises or online platforms.\n- They are sensitive to changes in consumer preferences and the emergence of substitute products.\n\nIn particular, while the food service industry may appear to have constant demand, actual operations involve a complex interplay of burdens such as food waste, delivery fees, workforce management, hygiene risks, long working hours, and low average check size. It is difficult to explain the likelihood of survival based solely on the assumption that “since it’s the food business, there’s always demand.”\n\n## 5 Things You Must Calculate Before Starting a Business\n\n### 1. Break-Even Point\n\nYou must calculate the minimum sales threshold, taking into account monthly rent, maintenance fees, labor costs, raw material costs, credit card processing fees, delivery and platform fees, taxes, insurance premiums, and loan interest.\n\nFor example, if monthly fixed costs total 6 million won and the gross profit margin is 40%, a simple calculation shows that the break-even sales figure is approximately 15 million won per month. When you factor in the business owner’s living expenses and a contingency fund, the required sales figure increases further.\n\n### 2. Contingency Fund\n\nIn the early stages of starting a business, revenue often takes longer to pick up than expected. You must secure sufficient cash flow to sustain the business for at least six months to one year, even if there is virtually no net profit during that period.\n\nIf you start without contingency funds, your capital will likely run out before you can validate your revenue model, increasing the likelihood of resorting to discount sales, excessive advertising, or taking out additional loans.\n\n### 3. Alignment of the Commercial District and Customer Flow\n\nA good commercial district isn’t simply a place with high foot traffic. It must be a location where your business’s target customers actually pass by, stop, and have a reason to make a purchase.\n\nFor example, for a café, the lunch routes of office workers, the time students spend in the area, weekend family demand, and the proportion of takeout orders all differ. For a tutoring center, the routes taken by schools, apartment complexes, and parents are important, while for a hair salon, accessibility for repeat visits and local reputation are key.\n\n### 4. Competitive Density\n\nHaving many businesses of the same type nearby can signal demand, but it can also indicate that profits are already being diluted. You must compare not only the number of competing stores but also their price ranges, reviews, operating hours, menu and service offerings, and customer demographics.\n\n### 5. Repeat Business Structure\n\nThe key to long-term survival lies in repeat business rather than attracting new customers. If customers who come in once through advertising do not return, revenue will continue to depend on advertising costs. You must determine whether the business type is conducive to building a loyal customer base, whether you can manage customer data, and whether you can create repeated touchpoints within the local community.\n\n## Points Retirees Starting a Business Should Be Especially Careful About\n\nFor retirees starting a business, the recovery time is shorter than for younger entrepreneurs. Since a single failure could deplete your retirement savings, you must set a loss limit before determining your expected returns.\n\n### Checklist for Retirees Starting a Business\n\n| Check Item | Questions to Ask |\n|---|---|\n| Investment Limit | What is the maximum loss that would not jeopardize your basic standard of living even in the event of failure? |\n| Workload | Can you realistically handle operating the business for 10–12 hours a day? |\n| Relevance of Experience | Do you possess skills, customer insight, and operational capabilities related to your previous career? |\n| Family Risk | Can you operate the business without relying on family members for labor? |\n| Exit Criteria | After how many consecutive months of losses will you close the business or switch industries? |\n| Recovery of Key Money | Have you distinguished between assets that can be recovered upon exit and costs that cannot be recovered? |\n\nThe approach of thinking, “Let’s run a small shop, even if it’s just a little,” after retirement can be risky. Even a small shop requires managing rent, inventory, labor costs, taxes, marketing, customer service, and handling customer complaints.\n\n## Principles for Choosing an Industry Based on Data\n\nSurvival rate statistics are not a signal to unconditionally avoid a specific industry. Even within the same industry, outcomes vary depending on location, the operator’s capabilities, cost structure, and differentiation strategies. However, statistics do tell entrepreneurs what questions they should ask first.\n\n### Questions to Ask When Choosing an Industry\n\n1. Why does this industry have a low or high survival rate?\n2. Does the same trend hold true in the area where I plan to open?\n3. Is there a clear reason why my business would be better than competing stores?\n4. Is there a system in place to encourage repeat purchases?\n5. Are there channels that can drive traffic without advertising costs?\n6. Can the business withstand increases in cost of goods sold, rent, and labor costs?\n7. Can cash flow be maintained if sales remain sluggish for six months?\n8. How much in assets can be recovered if the business closes?\n\n## Conclusion: When Starting a Business, Survival Structure Comes Before the Business Idea\n\nThe survival rates of the National Tax Service’s top 100 daily-life business sectors reveal the harsh reality of Korea’s self-employment market. A significant number of businesses drop out within the first year after launch, and only about half remain after three years. This cannot be explained solely by a lack of individual effort. A combination of factors—including intense competition, changing consumer patterns, rising fixed costs, platform fees, and demographic shifts—is at play.\n\nTherefore, entrepreneurs should look to the data first, rather than trendy business ideas or success stories from others. They must verify industry-specific survival rates, local market conditions, fixed costs, break-even points, contingency funds, and customer retention patterns before launching.\n\nSuccess in self-employment comes not from a short-term surge in sales, but from building a sustainable business model. If you’re preparing to start a business, you should first answer questions like “Why will customers keep coming back?” and “How long can I survive even if sales take time to pick up?” rather than simply asking “What will I sell?”","content_html":"\u003ch2\u003e\u003ca href=\"#why-is-survival-rate-the-top-priority-when-starting-a-small-business\" class=\"anchor\" id=\"why-is-survival-rate-the-top-priority-when-starting-a-small-business\"\u003e\u003c/a\u003eWhy Is “Survival Rate” the Top Priority When Starting a Small Business?\u003c/h2\u003e\n\u003cp\u003eWhen considering starting a business after retirement or pursuing a second career, many people first look at revenue potential, trending products, key money, and interior design costs. However, the most important metric to check in the actual small business market is the \u003cstrong\u003esurvival rate\u003c/strong\u003e.\u003c/p\u003e\n\u003cp\u003eSurvival rate refers to the percentage of businesses established at a specific point in time that are still in operation one, three, or five years later. This metric is not merely a measure of success; it also reveals the intensity of competition within the industry, the burden of fixed costs, the stability of demand, and vulnerability to changes in consumer patterns.\u003c/p\u003e\n\u003cp\u003eBased on a synthesis of the National Tax Service’s statistics on the top 100 daily-life industries and related press releases, the Korean self-employment market experiences high attrition rates starting from the first year after launch, with only about half of businesses remaining by the third year. Therefore, entrepreneurs must first calculate “how long they can survive” rather than “how much they can earn.”\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#key-indicators-1-year-3-year-and-5-year-survival-rates\" class=\"anchor\" id=\"key-indicators-1-year-3-year-and-5-year-survival-rates\"\u003e\u003c/a\u003eKey Indicators: 1-Year, 3-Year, and 5-Year Survival Rates\u003c/h2\u003e\n\u003cp\u003eAs of 2024, the survival rates for the Top 100 Daily Life Industries, as reported, can be summarized as follows.\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\u003eSurvival Rate\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\u003e1 Year After Launch\u003c/td\u003e\n\u003ctd\u003eApprox. 77.0%\u003c/td\u003e\n\u003ctd\u003eMore than 2 out of 10 businesses close or cease operations within one year.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e2 Years After Launch\u003c/td\u003e\n\u003ctd\u003eApprox. 61.6%\u003c/td\u003e\n\u003ctd\u003eEven after surviving the first year, a significant number of businesses drop out during the second year.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e3 years after launch\u003c/td\u003e\n\u003ctd\u003eApprox. 52.3%\u003c/td\u003e\n\u003ctd\u003eOnly about half make it past the 3-year mark.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e4 years after launch\u003c/td\u003e\n\u003ctd\u003eApprox. 45.3%\u003c/td\u003e\n\u003ctd\u003eBy the fourth year, fewer than half remain in business.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003e5 years after launch\u003c/td\u003e\n\u003ctd\u003eApprox. 40.2%\u003c/td\u003e\n\u003ctd\u003eNearly 6 out of 10 businesses disappear within five years.\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThese figures demonstrate that the risks of starting a small business are not limited to specific industries. In particular, the high closure rate in the first year indicates that poor initial sales, the burden of rent and labor costs, a lack of operational experience, and misjudgments about the commercial district quickly determine whether a business can survive.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#what-are-the-top-100-daily-life-industries\" class=\"anchor\" id=\"what-are-the-top-100-daily-life-industries\"\u003e\u003c/a\u003eWhat Are the Top 100 Daily Life Industries?\u003c/h2\u003e\n\u003cp\u003eThe National Tax Service’s “Top 100 Daily Life Industries” are compiled from sectors that sell or provide goods and services closely tied to people’s daily lives. They include restaurants, cafes, beauty salons, mail-order businesses, private academies, lodging, real estate brokerage, and various retail and service industries.\u003c/p\u003e\n\u003cp\u003eThese statistics are important for the following reasons:\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eThey cover industries that many individual entrepreneurs actually enter.\u003c/li\u003e\n\u003cli\u003eThey allow for comparisons of the number of new business owners and survival rates by industry.\u003c/li\u003e\n\u003cli\u003eThey serve as foundational data for assessing whether there is an oversaturation of startups by region, age group, and industry.\u003c/li\u003e\n\u003cli\u003eIt is easily utilized for analyzing policies related to retirement-based startups, youth entrepreneurship, and small business owners.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eHowever, the survival rate is an indicator of whether a business “continued operations,” not a direct measure of whether it was sufficiently profitable. Even if a business survives, it may still be operating with low profits, high labor intensity, or a heavy debt burden.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#why-industries-with-low-barriers-to-entry-can-be-risky\" class=\"anchor\" id=\"why-industries-with-low-barriers-to-entry-can-be-risky\"\u003e\u003c/a\u003eWhy Industries with Low Barriers to Entry Can Be Risky\u003c/h2\u003e\n\u003cp\u003eIn the self-employment sector, low barriers to entry mean that starting a business is easy, but it also means that anyone can enter the market, leading to rapidly intensifying competition.\u003c/p\u003e\n\u003cp\u003eA prime example is \u003cstrong\u003email-order and online retail\u003c/strong\u003e. Industries that retail or broker products through online channels—such as online shopping malls, social media sales, and home shopping—appear to have lower initial setup costs than brick-and-mortar stores. However, in reality, product sourcing, advertising costs, platform fees, logistics, return processing, price competition, and review management all contribute to costs and risks.\u003c/p\u003e\n\u003cp\u003eAccording to data provided by the operator, the number of new businesses in the e-commerce sector in 2024 exceeded 190,000—one of the highest figures—but the one-year survival rate was 67.7%, lower than the overall average. The three-year and five-year survival rates were reported at 44.7% and 34.6%, respectively, indicating that long-term survival in this industry is challenging.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#common-risks-in-industries-with-low-barriers-to-entry\" class=\"anchor\" id=\"common-risks-in-industries-with-low-barriers-to-entry\"\u003e\u003c/a\u003eCommon Risks in Industries with Low Barriers to Entry\u003c/h3\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eRisk\u003c/th\u003e\n\u003cth\u003eDescription\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eOvercrowded Competition\u003c/td\u003e\n\u003ctd\u003eThe rapid proliferation of similar products and services intensifies price competition.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eDifficulty in Differentiation\u003c/td\u003e\n\u003ctd\u003eWithout a brand, technology, location, or exclusive supply chain, customers are likely to switch easily.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eReliance on Advertising Costs\u003c/td\u003e\n\u003ctd\u003eFor online sales or delivery-based businesses, the cost of visibility can put pressure on profits.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eTrend Cycles\u003c/td\u003e\n\u003ctd\u003eItems that enjoy fleeting popularity experience rapid market saturation and a sharp drop in demand.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eLow Customer Loyalty\u003c/td\u003e\n\u003ctd\u003eA high proportion of customers make decisions based solely on price or convenience.\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#characteristics-of-industries-that-last-relatively-longer\" class=\"anchor\" id=\"characteristics-of-industries-that-last-relatively-longer\"\u003e\u003c/a\u003eCharacteristics of Industries That Last Relatively Longer\u003c/h2\u003e\n\u003cp\u003eAccording to the data, industries with relatively high survival rates include hair salons, vacation rentals and guesthouses, travel agencies, and art academies, sports training centers, and tutoring centers. While this does not mean all these industries are risk-free, they share several common survival factors.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#1-skill--or-qualification-based-services\" class=\"anchor\" id=\"1-skill--or-qualification-based-services\"\u003e\u003c/a\u003e1. Skill- or Qualification-Based Services\u003c/h3\u003e\n\u003cp\u003eFor hair salons, academies, and certain professional service industries, the business owner’s skills, experience, and customer trust act as barriers to entry. This structure tends to foster customer loyalty based on the individual and their expertise, rather than simply on the sale of a product.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#2-recurring-demand-or-long-term-customer-relationships\" class=\"anchor\" id=\"2-recurring-demand-or-long-term-customer-relationships\"\u003e\u003c/a\u003e2. Recurring Demand or Long-Term Customer Relationships\u003c/h3\u003e\n\u003cp\u003eEducational services are considered an area where spending is difficult to cut drastically even during economic downturns. The relatively stable survival rates of arts academies, sports education institutions, tutoring centers and study rooms, and private tutoring academies can be attributed to repeat enrollment, local reputation, and parent networks.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#3-reduced-fixed-costs-through-asset-ownership\" class=\"anchor\" id=\"3-reduced-fixed-costs-through-asset-ownership\"\u003e\u003c/a\u003e3. Reduced Fixed Costs Through Asset Ownership\u003c/h3\u003e\n\u003cp\u003eFor vacation rentals and guesthouses, the burden of rent can be reduced if the operator owns the land or building. While risks such as loan interest, facility maintenance costs, seasonal demand, and platform fees remain, this can sometimes provide an advantage for long-term sustainability compared to starting a business as a tenant.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#4-local-community-and-regular-customer-base\" class=\"anchor\" id=\"4-local-community-and-regular-customer-base\"\u003e\u003c/a\u003e4. Local Community and Regular Customer Base\u003c/h3\u003e\n\u003cp\u003eFor hair salons, neighborhood tutoring centers, and daily life service businesses, repeat visits and customer referrals are crucial. Businesses that build social capital within the local community may have a better chance of long-term survival than those that rely solely on foot traffic.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#warning-signs-for-industries-with-low-survival-rates\" class=\"anchor\" id=\"warning-signs-for-industries-with-low-survival-rates\"\u003e\u003c/a\u003eWarning Signs for Industries with Low Survival Rates\u003c/h2\u003e\n\u003cp\u003eAccording to data provided by the operator, PC cafes, beer bars, snack bars, fast-food restaurants, and cell phone stores were identified as industries facing difficulties in terms of three-year survival rates.\u003c/p\u003e\n\u003cp\u003eThese industries share several common characteristics.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eThey face significant burdens from rent and interior design costs.\u003c/li\u003e\n\u003cli\u003eThey are highly dependent on foot traffic.\u003c/li\u003e\n\u003cli\u003eThey are vulnerable to fluctuations in labor and raw material costs.\u003c/li\u003e\n\u003cli\u003eThey are affected by competition from large franchises or online platforms.\u003c/li\u003e\n\u003cli\u003eThey are sensitive to changes in consumer preferences and the emergence of substitute products.\u003c/li\u003e\n\u003c/ul\u003e\n\u003cp\u003eIn particular, while the food service industry may appear to have constant demand, actual operations involve a complex interplay of burdens such as food waste, delivery fees, workforce management, hygiene risks, long working hours, and low average check size. It is difficult to explain the likelihood of survival based solely on the assumption that “since it’s the food business, there’s always demand.”\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#5-things-you-must-calculate-before-starting-a-business\" class=\"anchor\" id=\"5-things-you-must-calculate-before-starting-a-business\"\u003e\u003c/a\u003e5 Things You Must Calculate Before Starting a Business\u003c/h2\u003e\n\u003ch3\u003e\u003ca href=\"#1-break-even-point\" class=\"anchor\" id=\"1-break-even-point\"\u003e\u003c/a\u003e1. Break-Even Point\u003c/h3\u003e\n\u003cp\u003eYou must calculate the minimum sales threshold, taking into account monthly rent, maintenance fees, labor costs, raw material costs, credit card processing fees, delivery and platform fees, taxes, insurance premiums, and loan interest.\u003c/p\u003e\n\u003cp\u003eFor example, if monthly fixed costs total 6 million won and the gross profit margin is 40%, a simple calculation shows that the break-even sales figure is approximately 15 million won per month. When you factor in the business owner’s living expenses and a contingency fund, the required sales figure increases further.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#2-contingency-fund\" class=\"anchor\" id=\"2-contingency-fund\"\u003e\u003c/a\u003e2. Contingency Fund\u003c/h3\u003e\n\u003cp\u003eIn the early stages of starting a business, revenue often takes longer to pick up than expected. You must secure sufficient cash flow to sustain the business for at least six months to one year, even if there is virtually no net profit during that period.\u003c/p\u003e\n\u003cp\u003eIf you start without contingency funds, your capital will likely run out before you can validate your revenue model, increasing the likelihood of resorting to discount sales, excessive advertising, or taking out additional loans.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#3-alignment-of-the-commercial-district-and-customer-flow\" class=\"anchor\" id=\"3-alignment-of-the-commercial-district-and-customer-flow\"\u003e\u003c/a\u003e3. Alignment of the Commercial District and Customer Flow\u003c/h3\u003e\n\u003cp\u003eA good commercial district isn’t simply a place with high foot traffic. It must be a location where your business’s target customers actually pass by, stop, and have a reason to make a purchase.\u003c/p\u003e\n\u003cp\u003eFor example, for a café, the lunch routes of office workers, the time students spend in the area, weekend family demand, and the proportion of takeout orders all differ. For a tutoring center, the routes taken by schools, apartment complexes, and parents are important, while for a hair salon, accessibility for repeat visits and local reputation are key.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#4-competitive-density\" class=\"anchor\" id=\"4-competitive-density\"\u003e\u003c/a\u003e4. Competitive Density\u003c/h3\u003e\n\u003cp\u003eHaving many businesses of the same type nearby can signal demand, but it can also indicate that profits are already being diluted. You must compare not only the number of competing stores but also their price ranges, reviews, operating hours, menu and service offerings, and customer demographics.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#5-repeat-business-structure\" class=\"anchor\" id=\"5-repeat-business-structure\"\u003e\u003c/a\u003e5. Repeat Business Structure\u003c/h3\u003e\n\u003cp\u003eThe key to long-term survival lies in repeat business rather than attracting new customers. If customers who come in once through advertising do not return, revenue will continue to depend on advertising costs. You must determine whether the business type is conducive to building a loyal customer base, whether you can manage customer data, and whether you can create repeated touchpoints within the local community.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#points-retirees-starting-a-business-should-be-especially-careful-about\" class=\"anchor\" id=\"points-retirees-starting-a-business-should-be-especially-careful-about\"\u003e\u003c/a\u003ePoints Retirees Starting a Business Should Be Especially Careful About\u003c/h2\u003e\n\u003cp\u003eFor retirees starting a business, the recovery time is shorter than for younger entrepreneurs. Since a single failure could deplete your retirement savings, you must set a loss limit before determining your expected returns.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#checklist-for-retirees-starting-a-business\" class=\"anchor\" id=\"checklist-for-retirees-starting-a-business\"\u003e\u003c/a\u003eChecklist for Retirees Starting a Business\u003c/h3\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\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eInvestment Limit\u003c/td\u003e\n\u003ctd\u003eWhat is the maximum loss that would not jeopardize your basic standard of living even in the event of failure?\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eWorkload\u003c/td\u003e\n\u003ctd\u003eCan you realistically handle operating the business for 10–12 hours a day?\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eRelevance of Experience\u003c/td\u003e\n\u003ctd\u003eDo you possess skills, customer insight, and operational capabilities related to your previous career?\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eFamily Risk\u003c/td\u003e\n\u003ctd\u003eCan you operate the business without relying on family members for labor?\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eExit Criteria\u003c/td\u003e\n\u003ctd\u003eAfter how many consecutive months of losses will you close the business or switch industries?\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eRecovery of Key Money\u003c/td\u003e\n\u003ctd\u003eHave you distinguished between assets that can be recovered upon exit and costs that cannot be recovered?\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003cp\u003eThe approach of thinking, “Let’s run a small shop, even if it’s just a little,” after retirement can be risky. Even a small shop requires managing rent, inventory, labor costs, taxes, marketing, customer service, and handling customer complaints.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#principles-for-choosing-an-industry-based-on-data\" class=\"anchor\" id=\"principles-for-choosing-an-industry-based-on-data\"\u003e\u003c/a\u003ePrinciples for Choosing an Industry Based on Data\u003c/h2\u003e\n\u003cp\u003eSurvival rate statistics are not a signal to unconditionally avoid a specific industry. Even within the same industry, outcomes vary depending on location, the operator’s capabilities, cost structure, and differentiation strategies. However, statistics do tell entrepreneurs what questions they should ask first.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#questions-to-ask-when-choosing-an-industry\" class=\"anchor\" id=\"questions-to-ask-when-choosing-an-industry\"\u003e\u003c/a\u003eQuestions to Ask When Choosing an Industry\u003c/h3\u003e\n\u003col\u003e\n\u003cli\u003eWhy does this industry have a low or high survival rate?\u003c/li\u003e\n\u003cli\u003eDoes the same trend hold true in the area where I plan to open?\u003c/li\u003e\n\u003cli\u003eIs there a clear reason why my business would be better than competing stores?\u003c/li\u003e\n\u003cli\u003eIs there a system in place to encourage repeat purchases?\u003c/li\u003e\n\u003cli\u003eAre there channels that can drive traffic without advertising costs?\u003c/li\u003e\n\u003cli\u003eCan the business withstand increases in cost of goods sold, rent, and labor costs?\u003c/li\u003e\n\u003cli\u003eCan cash flow be maintained if sales remain sluggish for six months?\u003c/li\u003e\n\u003cli\u003eHow much in assets can be recovered if the business closes?\u003c/li\u003e\n\u003c/ol\u003e\n\u003ch2\u003e\u003ca href=\"#conclusion-when-starting-a-business-survival-structure-comes-before-the-business-idea\" class=\"anchor\" id=\"conclusion-when-starting-a-business-survival-structure-comes-before-the-business-idea\"\u003e\u003c/a\u003eConclusion: When Starting a Business, Survival Structure Comes Before the Business Idea\u003c/h2\u003e\n\u003cp\u003eThe survival rates of the National Tax Service’s top 100 daily-life business sectors reveal the harsh reality of Korea’s self-employment market. A significant number of businesses drop out within the first year after launch, and only about half remain after three years. This cannot be explained solely by a lack of individual effort. A combination of factors—including intense competition, changing consumer patterns, rising fixed costs, platform fees, and demographic shifts—is at play.\u003c/p\u003e\n\u003cp\u003eTherefore, entrepreneurs should look to the data first, rather than trendy business ideas or success stories from others. They must verify industry-specific survival rates, local market conditions, fixed costs, break-even points, contingency funds, and customer retention patterns before launching.\u003c/p\u003e\n\u003cp\u003eSuccess in self-employment comes not from a short-term surge in sales, but from building a sustainable business model. If you’re preparing to start a business, you should first answer questions like “Why will customers keep coming back?” and “How long can I survive even if sales take time to pick up?” rather than simply asking “What will I sell?”\u003c/p\u003e\n","tags":["Startup","Self employment","Survival rate","Tax statistics","Trade Area Analysis","Retirement Entrepreneurship"],"faqs":[{"question":"Self-Employed](https://nts.go.kr/nts/na/ntt/selectNttInfo.do?bbsId=1028\u0026mi=2201\u0026nttSn=1342284https://www.data.go.kr/data/15048948/fileData.dohttps://www.data.go.kr/data/15061118/fileData.dohttps://www.hankyung.com/article/2025110286751%22,%22faqs%22:[{%22question%22:%22What is the survival rate for the self-employed?","answer":"This is the percentage of businesses that were established at a specific point in time and are still in operation one, three, and five years later. It is an indicator of whether businesses remain in operation without closing, but it does not guarantee actual profitability."},{"question":"Why is the first three years after starting a business considered so important?","answer":"This is because the three-year survival rate, according to the National Tax Service’s statistics on the top 100 small business sectors, has dropped to about half. Trial and error during the early stages of starting a business, the burden of fixed costs, failure to attract customers, and intensifying competition all become particularly evident within the first one to three years."},{"question":"Why is it that, even though there are many entrepreneurs in the online retail industry, the survival rate is relatively low?","answer":"While getting started may seem easy, in reality, there are significant challenges such as product sourcing, advertising costs, competition on the platform, logistics, returns, and pressure from price comparisons. The easier it is for anyone to enter a particular industry, the faster the number of competitors grows, which can lead to declining profitability."},{"question":"Does a high survival rate in a particular industry mean it's a safe business to start?","answer":"No. A high survival rate simply means that businesses in that industry tend to stay in operation for a long time on average. The outcomes of individual businesses vary depending on location, rent, loan size, management capabilities, local demand, and the competitive landscape."},{"question":"What types of businesses should retirees avoid when starting a business?","answer":"Rather than avoiding certain industries across the board, you should be particularly cautious about industries that require large initial investments, have low prospects for recouping those costs, and involve high fixed costs; industries that are highly dependent on trends; and industries unrelated to your own experience."},{"question":"How much startup capital do I need before starting a business?","answer":"Generally, you should calculate a level of cash flow that allows you to cover fixed expenses—such as rent, labor costs, management fees, and loan interest—even if there is little to no net profit for at least six months to a year. The amount required varies significantly depending on the industry and the scale of the investment."},{"question":"What is the most important factor in retail market analysis?","answer":"Rather than the sheer number of passersby, it is more important to consider whether the actual movement patterns and purchasing intentions of your target customers align with your business type. Even with the same number of passersby, the most suitable business type varies depending on the proportion of office workers, students, families, tourists, and residents."},{"question":"Is starting a franchise safer than starting your own business?","answer":"While franchises offer the benefits of a brand and an operations manual, you must also carefully consider franchise fees, royalties, interior design costs, raw material supply terms, and potential overlap in business territories. Brand recognition alone does not guarantee survival."},{"question":"Where can I find statistics on the survival rate of self-employed businesses?","answer":"You can find this information in the National Tax Service press releases, the National Tax Statistics Portal, and the Public Data Portal, specifically in the data related to the top 100 daily-life industries. Be sure to check the base year, industry classification, and criteria for new businesses listed in the statistical tables."},{"question":"What is more important than a business idea?","answer":"The break-even point, fixed-cost structure, potential for repeat customers, level of competition, suitability for the commercial district, reserve funds, and exit criteria are more important. Even a good business concept will struggle to survive in the long run if it has a poor cost structure."}],"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 Period! Survival Rates for Small Businesses According to National Tax Statistics","type":"source"},{"url":"https://www.data.go.kr/data/15048948/fileData.do","title":"Public Data Portal: National Tax Service—Status of New Businesses in the Top 100 Daily Life Sectors (by Industry and Region)","type":"source"},{"url":"https://www.data.go.kr/data/15061118/fileData.do","title":"Public Data Portal: National Tax Service_Business Overview_Top 100 Daily Life Sectors","type":"source"},{"url":"https://www.hankyung.com/article/2025110286751","title":"Korea Economic Daily: Half of Self-Employed Individuals Can’t Last Even Three Years… 22% Close Their Businesses Within a Year","type":"source"}],"images":[{"id":95,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6OTIwLCJwdXIiOiJibG9iX2lkIn19--dbc26d95c1329c34a98969bee6ac06e4980bc088/ChatGPT%20Image%202026%E1%84%82%E1%85%A7%E1%86%AB%207%E1%84%8B%E1%85%AF%E1%86%AF%209%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%2008_36_21.webp","is_representative":true,"generation_method":"upload","mime_type":"image/webp","original_filename":"ChatGPT Image 2026년 7월 9일 오전 08_36_21.png","translations":{"ko":{"alt":"불안정한 점포들이 협곡을 건너 안정적인 미용실·숙박·교육 사업으로 이어지는 창업 생존 일러스트","caption":"위태로운 창업 초기와 생존 이후 안정된 업종을 협곡과 다리로 대비해 보여준다.","description":null},"en":{"alt":"Small fragile shops crossing a canyon toward stable salon, lodging, and education businesses","caption":"The illustration contrasts crowded early-stage businesses with fewer, more resilient surviving businesses.","description":null},"ja":{"alt":"不安定な小規模店舗が峡谷を越え、安定した美容室・宿泊・教育事業へ向かうイラスト","caption":"創業初期の厳しさと、生き残った安定業種の違いを峡谷と橋で表している。","description":null},"es":{"alt":"Pequeños negocios frágiles cruzan un cañón hacia salones, alojamientos y centros educativos estables","caption":"La escena compara negocios iniciales saturados con actividades más estables que logran sobrevivir.","description":null},"id":{"alt":"Toko kecil rapuh menyeberangi jurang menuju salon, penginapan, dan layanan pendidikan yang stabil","caption":"Ilustrasi ini menunjukkan masa awal usaha yang sulit dan bisnis yang lebih kuat setelah bertahan.","description":null},"pt":{"alt":"Pequenos negócios frágeis atravessam um desfiladeiro rumo a salões, hospedagens e educação estáveis","caption":"A cena contrasta negócios iniciais vulneráveis com atividades mais sólidas que conseguem sobreviver.","description":null},"zh-hant":{"alt":"脆弱小店跨越峽谷，通往較穩定的美髮、住宿與教育服務事業","caption":"插圖以峽谷與橋梁對比創業初期風險和存活後的穩定業態。","description":null}}},{"id":96,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6OTI3LCJwdXIiOiJibG9iX2lkIn19--ab546512a89d63a84c0cc2145242d45a90d43434/ChatGPT%20Image%202026%E1%84%82%E1%85%A7%E1%86%AB%207%E1%84%8B%E1%85%AF%E1%86%AF%209%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%2008_41_51.webp","is_representative":false,"generation_method":"upload","mime_type":"image/webp","original_filename":"ChatGPT Image 2026년 7월 9일 오전 08_41_51.png","translations":{"ko":{"alt":"책상 위 사업 계획 보드에 점포 모형, 비용, 손익분기점, 상권, 경쟁, 단골 요소가 배치된 일러스트","caption":"창업 전 고정비와 상권, 경쟁 밀도, 재방문 구조를 검토하는 과정을 보여준다.","description":null},"en":{"alt":"Business planning board on a desk with a shop model, costs, break-even, location, competition, and loyalty icons","caption":"The illustration shows key checks before opening a small business, from fixed costs to repeat customers.","description":null},"ja":{"alt":"机上の事業計画ボードに店舗模型、費用、損益分岐点、商圏、競合、常連客の要素が並ぶ","caption":"開業前に固定費、商圏、競合密度、再来店の仕組みを確認する場面を描いている。","description":null},"es":{"alt":"Tablero de planificación con modelo de tienda, costos, equilibrio, ubicación, competencia y fidelidad","caption":"La escena muestra la revisión previa de costos fijos, zona comercial, competencia y clientes recurrentes.","description":null},"id":{"alt":"Papan rencana bisnis di meja dengan model toko, biaya, titik impas, lokasi, pesaing, dan pelanggan tetap","caption":"Ilustrasi ini menunjukkan pemeriksaan biaya, lokasi, persaingan, dan pelanggan berulang sebelum membuka usaha.","description":null},"pt":{"alt":"Quadro de planejamento com loja, custos, ponto de equilíbrio, localização, concorrência e fidelização","caption":"A cena mostra a análise de custos fixos, ponto comercial, concorrência e clientes recorrentes antes de empreender.","description":null},"zh-hant":{"alt":"桌上的創業規劃板展示店鋪模型、成本、損益平衡、商圈、競爭與回訪顧客元素","caption":"插圖呈現開店前檢查固定成本、商圈、競爭密度與顧客回訪結構的過程。","description":null}}}],"published_at":"2026-07-09T08:47:30+09:00","updated_at":"2026-07-09T08:47:30+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-self-employment-survival-rate-by-industry"}