ENTREPRENEURIAL activity is expected to “flourish” across the mid-west region in the coming years, but up to 80% of start-up companies will fail within their first five years of trading, unless they have the right experience mix, it has been warned.
That opinion has been voiced by Limerick Chamber of Commerce president, Kieran MacSweeney, a former senior vice-president of US technology multinational Avocent.
“The reality is that 80% of traditional start-ups fail because they don’t have the necessary blend of technical, entrepreneurial and management skills. Typically 40% of these businesses will even fail in the first year of operations; 80% of those that survive the first five years will fail in the second five. Therefore, after 10 years, only 4% are left and 96% will have failed. This shows that the start-up model in its current typical format, driven by technicians/practitioners, is failing to a large degree,” he said.
Mr MacSweeney was speaking at the launch of Limerick Institute of Technology’s new National Franchise Centre (NFC) – Europe’s first dedicated third-level franchise centre – which aims to aid start-ups and entrepreneurs by aligning the skill-sets of candidates to the right franchise for them and by helping adopt the successful business format franchising methodology at the outset.
Mr MacSweeney said: “Recessions are a breeding-ground for new businesses, as people who have been laid off are forced into having a real go at starting up businesses on their own. What is critical is that the Government and state agencies give a lead in the same way Limerick Institute of Technology is with the National Franchise Centre.
“Rather than sit on its hands, LIT, supported by Limerick Chamber of Commerce, has gone out and not alone come up with the concept of the National Franchise Centre but secured €1m in funding from the European Globalisation Fund (EGF) for employees made redundant by Dell and down-stream companies over the past 18 months,” he added.
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