Small Phoenix businesses are not sticking around long, new study finds

PHOENIX — A new study from a major bank suggests Phoenix’s small businesses don’t stay around for long.

Chris Wheat is the business-research director of the J.P. Morgan Chase Institute.

He says his research – which is based on data from just over one million Chase accountholders – shows most small businesses in Phoenix don’t last past their sixth year.

One reason could be cash flow.

“Places that hold relatively small amounts of cash in their accounts relative expenditures – we think of them as less able to respond to unexpected expenses, or in revenue,” he said.

Another reason could be inconsistent cash flow.

“Businesses that have inconsistent or irregular patterns of cash flow in the first couple of years tended to exit (the market),” he said.

The report came out earlier this week.

Follow @ClineKathleen