The Census Bureau asks owners of employer firms what happened to the previous business they started most recently. Among owners who reported such a business, 5.5% said another individual or company bought it, and 16.5% said it was no longer operating, a gap of 11.0 percentage points in favor of closure. Most, 71.4%, still owned it. The unit is owners of responding employer firms, not businesses, and owners who left business ownership entirely are not in the survey.
The Census Bureau’s Annual Business Survey (ABS) asks the owners of employer firms about themselves and their history in business. Census describes the survey’s coverage as “All domestic, non-farm, for profit businesses with at least one paid employee. Additionally, non-profit organizations (excluding universities) that operate in industries identified as potentially having R&D are sampled.” It notes that “The Annual Business Survey excludes the collection of data from nonemployer businesses.” This article uses the owner tables from the 2024 ABS. Census explains that the survey’s name uses the collection year: “The 2024 ABS, for example, covers reference year 2023.”
The unit throughout is the owner, not the firm. One firm can have several owners, and the survey records a separate answer for each owner. Census also notes that the owner tables “include only businesses that were classifiable by sex, ethnicity, race, and veteran status and responded to at least one owner demographic question.” The counts below are therefore owners of responding employer firms.
The question, and who answers it
The question asks about the status of the previous business the owner started most recently, not including the current one. The form records one answer for each owner. The question is about a business the owner started. A business the owner bought, or a business started before the most recent one, is outside it.
That framing matters for one reason above all. Everyone represented in this table owned an employer firm in reference year 2023. An owner whose previous business sold and who had retired, taken a job, or otherwise left employer-firm ownership before then is not represented. The table describes the history of people who were still owners. It is not a census of how businesses end.
Status of owners’ previous businesses
Census estimates that, of 4,212,412 owners who answered the question, 2,051,500 (48.7%) said the current business is their first. The remaining 2,160,912 reported a previous business they had started. Among those owners:
| Status of the previous business the owner started most recently | Estimated owners | Share of owners with a previous business |
|---|---|---|
| Still operating, and the owner still owns it | 1,543,804 | 71.4% |
| No longer in operation | 355,740 | 16.5% |
| Purchased by another individual | 61,240 | 2.8% |
| Purchased by another company | 57,225 | 2.6% |
| Purchased, either type (sum of the two rows above) | 118,465 | 5.5% |
| Other | 142,904 | 6.6% |
Source: U.S. Census Bureau, 2024 Annual Business Survey (reference year 2023), Characteristics of Business Owners, file AB2300CSCBO, downloaded October 3, 2026. United States, all sectors, all owners of respondent employer firms. Owners who did not answer the question are excluded, as Census excludes them from its count of owners reporting. Census rounds each published estimate separately, so the five individual answers add to 2,160,913, one more than the 2,160,912 calculated as all reporting owners minus first-time owners.
The study’s single registered comparison is the sold share minus the closed share: 5.5% minus 16.5%, or minus 11.0 percentage points. The shares are this study’s calculations from published counts, with owners reporting a previous business as the denominator. Census publishes standard errors for each answer as a share of all owners who answered, but not for these conditional shares or for the sum of the two “purchased” answers. These figures are point estimates, and no interval is shown. The public table includes an “Other” answer, and this article does not guess what it contains.
By sector
The same shares, calculated for each sector in which Census published every needed count (sector of the owner’s current firm, not of the previous business):
| Sector of current firm | Sold | Closed | Sold minus closed (pp) | Still owned | Other |
|---|---|---|---|---|---|
| Agriculture, forestry, fishing and hunting | 4.3 | 7.9 | -3.6 | 83.0 | 4.7 |
| Mining, quarrying, and oil and gas extraction | 2.2 | 10.8 | -8.6 | 76.9 | 10.1 |
| Utilities | 5.6 | 18.3 | -12.7 | 68.8 | 7.3 |
| Construction | 3.5 | 18.6 | -15.1 | 71.8 | 6.0 |
| Manufacturing | 7.1 | 15.1 | -8.0 | 69.8 | 8.1 |
| Wholesale trade | 6.6 | 15.1 | -8.5 | 70.9 | 7.5 |
| Retail trade | 5.8 | 13.9 | -8.1 | 74.6 | 5.7 |
| Transportation and warehousing | 4.1 | 16.6 | -12.6 | 73.7 | 5.6 |
| Information | 7.9 | 20.8 | -12.9 | 62.2 | 9.1 |
| Finance and insurance | 6.3 | 17.0 | -10.7 | 68.9 | 7.8 |
| Real estate and rental and leasing | 5.2 | 14.4 | -9.2 | 72.0 | 8.3 |
| Professional, scientific, and technical services | 5.5 | 22.9 | -17.4 | 64.0 | 7.6 |
| Management of companies and enterprises | 8.4 | 5.3 | 3.0 | 68.0 | 18.4 |
| Administrative and support and waste management and remediation services | 5.0 | 16.1 | -11.1 | 71.9 | 7.0 |
| Educational services | 5.4 | 19.3 | -13.9 | 69.7 | 5.6 |
| Health care and social assistance | 5.8 | 13.8 | -8.0 | 74.6 | 5.8 |
| Arts, entertainment, and recreation | 5.5 | 14.9 | -9.4 | 73.3 | 6.2 |
| Accommodation and food services | 6.0 | 12.3 | -6.3 | 76.2 | 5.4 |
| Other services (except public administration) | 6.0 | 15.8 | -9.8 | 72.9 | 5.3 |
Shares are percentages of owners in that sector who reported a previous business. Differences are calculated from unrounded shares, so they can differ by 0.1 from subtracting the rounded figures. “Industries not classified” could not be calculated because a needed count was not published. In 18 of the 19 sectors shown, the closed share was larger than the sold share. In management of companies and enterprises, the sold share was larger. Sector figures are point estimates with no interval, and small differences between sectors should not be read as meaningful.
Context: owner age and when owners acquired their business
Census publishes the age of owners of respondent employer firms directly, with standard errors:
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| Owner age | Share of owners | Standard error |
|---|---|---|
| Under 25 | 0.4% | 0.0 |
| 25 to 34 | 5.3% | 0.1 |
| 35 to 44 | 18.0% | 0.2 |
| 45 to 54 | 25.0% | 0.1 |
| 55 to 64 | 28.2% | 0.1 |
| 65 or over | 23.1% | 0.2 |
Adding the two oldest groups gives 51.3% aged 55 or over. That sum is this study’s calculation and has no published standard error. The public tables do not cross owner age with the status of the previous business, so this article does not say how older owners’ previous businesses ended.
When owners acquired their current business: 2.1% before 1980, 5.3% in the 1980s, 10.6% in the 1990s, 19.2% in 2000 to 2009, 33.7% in 2010 to 2019, and 4.3%, 4.9%, 4.3% and 1.3% in 2020, 2021, 2022 and 2023 respectively. 14.4% answered “don’t know.” These are Census’s published shares of owners who answered.
What the numbers mean for an owner
These are descriptive aggregates for the stated federal-data population. They do not identify causal effects, diagnose an individual company, or estimate the result of adopting a practice. The guidance that follows is operating judgment, not a finding from the data.
Among owners of responding employer firms whose answer concerned the previous business they had started most recently, closure was reported about three times as often as sale. The data cannot say why. It also misses owners who sold or closed and then left ownership altogether, and the direction in which that tilts the comparison is unknown. The table does not estimate the chance that a still-operating business will eventually find a buyer.
The practical reading is about transferability. A business sells when someone other than the founder can run it, can see why it makes money, and can believe the money will keep coming after the founder leaves. Many owner-run companies are built the other way: the owner holds the key customer relationships, prices from memory, approves every exception, and keeps the numbers in a format only the owner understands. Those businesses can be very profitable for the owner and still be hard to sell, because what a buyer would be paying for walks out of the door with the owner.
How to handle it: build a business someone else could buy
The steps below are an operating recommendation. This study did not test them, and Census does not endorse them.
1. Find out what a buyer would be buying. List what makes the business money: customers, contracts, a process, a location, a license, a team. Next to each, write who controls it today. Any line where the answer is the owner alone is a transfer risk a buyer will discount.
2. Move one relationship or decision off the owner each quarter. Pick the largest customer or the most frequent decision that only the owner handles. Hand it to a named person, with a written standard for how it is handled, and review the results monthly. In operating experience, a business that runs for a month without the owner is easier to sell than one that cannot.
3. Make the numbers readable by a stranger. Monthly financial statements closed on a fixed schedule, revenue broken down by customer and by line of business, and owner compensation separated from what the business needs to pay a manager. A buyer’s first questions are about these. An owner who cannot answer them quickly is negotiating from weakness.
4. Get a valuation before you need one. An outside view of what the business is worth, and why, shows the gaps while there is still time to close them. Doing it three to five years before an intended exit leaves room to act on the answer.
5. Decide what happens if no buyer appears. Closing is a legitimate outcome, and among these owners it was reported about three times as often as a sale. Planning for it, including a review with appropriate legal, HR or financial advisers of any obligations to employees, customers and lenders, gives the owner a fallback if a sale does not come together.
What this data does not tell you
- It does not show why previous businesses closed or sold, or what any practice would change.
- It covers only people who owned an employer firm in reference year 2023. Owners who sold or closed and then stopped owning a business are not counted, and that could move either share in either direction.
- It describes the previous business the owner started most recently, not every business the owner ran or bought.
- The unit is the owner. Two owners of the same previous business can each be counted.
- It does not cross owner age with how previous businesses ended.
Method
Already published by the agency: Census publishes the counts and percentages for every answer to this question, as shares of all owners who answered, in the ABS Characteristics of Business Owners tables. New here: the shares restricted to owners who reported a previous business, the sold-minus-closed comparison, and the same calculation by sector.
Source. U.S. Census Bureau, 2024 Annual Business Survey, reference year 2023, Characteristics of Business Owners (AB2300CSCBO), downloaded October 3, 2026. Selection: United States, all owners of respondent firms for sex, ethnicity, race and veteran status, all sectors, and each two-digit sector. Counts flagged by Census as suppressed or not available are treated as missing, never as zero.
Calculation. Owners with a previous business = “Total reporting” minus “This is the owner’s first business.” Sold = “purchased by another individual” plus “purchased by another company.” Each share = count ÷ owners with a previous business × 100. No interval is reported for these shares, because Census does not publish the covariances needed to compute one.
Protocol. The comparison, the denominator and the sector rule were fixed in a dated protocol before any estimate was computed. Before results, the question was confirmed to be single-answer from the Census questionnaire. The protocol (wave 2 section, frozen October 4, 2026) and its dated amendments are at https://kamyarshah.com/public-data-protocol/
Check. All figures were recomputed from the raw file by a separately written program, built without access to this study’s results. The national counts match the Census API (2023 ABS owner characteristics) exactly. The share of owners aged 65 or over, 23.1%, matches the Census release.
The agencies did not review or endorse this analysis. Kamyar Shah sells fractional COO and CMO services.
Questions about this analysis can be sent through https://kamyarshah.com/contact/.
