Injoys
Conclusion at a Glance
The 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.
The 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.”
Data Criteria and Interpretation Methods
This 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.
| Indicator | Criteria | Figure | Interpretation |
|---|---|---|---|
| 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 |
| 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 |
| 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 |
| 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 |
| 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 |
There 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.
Why Are There More Entrepreneurs in Their 30s and 40s?
In 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.
There are four main reasons behind the surge in entrepreneurship among the 30s and 40s generation.
- Initial entry costs have decreased thanks to online platforms, Smart Store, social media marketplaces, delivery apps, and booking platforms.
- Demand has grown for “pipeline-style” startups aimed at generating cash flow in addition to a regular salary.
- Digital marketing and content creation skills have become key competitive advantages for small-scale startups.
- 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.
However, 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.
Popular Industries and Sustainable Industries Are Different
As 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.
Among 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.
| Category | Reasons for High Startup Rates | Major Risks |
|---|---|---|
| E-commerce | Low capital requirements, no physical storefront, ability to utilize platforms | Advertising cost competition, low barriers to entry, potential for low actual sales |
| Korean Restaurants | Everyday demand, franchise availability, familiar consumer market | Labor costs, food costs, dependence on commercial districts, long working hours |
| Coffee Shops | Suitable for small-scale startups, easy to brand, popular among young people | Saturated commercial districts, rent, low average check size |
| Hair Salons & Beauty Services | Skill-based, repeat customers, potential for personal branding | Dependence on skill level, time to build a client base, workforce management |
| Real Estate Brokerage | License-based, many middle-aged entrants | Fluctuations in transaction volume, local economic conditions, building trust |
Common Characteristics of Industries with High 3-Year Survival Rates
Among 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.
| Industry | Example 3-Year Survival Rate from Provided Data | Reasons for High Survival Rate |
|---|---|---|
| Vacation Rentals and Guesthouses | 75.8% | Asset-based operations; location and facilities serve as competitive advantages |
| Hair Salons | 74.8% | Accumulation of technical expertise and a loyal customer base |
| Art Schools | 69.2% | Recurring local demand and the ongoing nature of educational services |
| Health Clubs | 68.9% | Potential for membership and subscription-based revenue models |
| Laundromats | 68.6% | Essential daily services and recurring demand |
According 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.
Structural Reasons for Low Survival Rates in Certain Sectors
Startup 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.
In the restaurant industry, in particular, the following conditions all come into play simultaneously:
- There is a heavy burden of fixed and variable costs, such as rent, labor costs, food costs, and delivery fees.
- Commercial districts and trends change rapidly.
- If even one of the following factors—taste, service, table turnover, cost management, or review management—fails, profitability can deteriorate sharply.
- Operational stability in the early stages may suffer unless the founder personally dedicates long hours to the business.
The 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.
7 Things to Check Before Starting a Business
| Check Item | Questions to Ask | Reason |
|---|---|---|
| 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 |
| 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 |
| 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 |
| Differentiation | Is there a reason for customers to return beyond price? | Long-term survival is difficult through price competition alone |
| 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 |
| 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 |
| 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 |
Realistic Startup Strategies Based on Data
First, 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.
Second, 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.
Third, 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.
Fourth, 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.
Fifth, 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.
The Exact Meaning of “Surviving 3 Years Places You in the Top 50%”
The 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.
However, 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.
Conclusion
Starting 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.
Prospective 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.
