Scaling is every founder’s dream, but statistics across Ireland and Europe reveal a harsh reality: most startups and SMEs fail to survive the scaling phase.

Startup Failure Rates

• First-Year Failure Rate: Approximately 20% of new businesses in Ireland fail within their first year (2024).
• Five-Year Survival Rate: Nearly 60% of startups do not survive beyond five years (2024).
• Funding Challenges: A significant issue is the funding gap for scale-up companies needing between €3 million and €10 million, which current Irish venture capital funds cannot support due to their small size. As a result, many startups fail to progress, and a third go bankrupt (Ihle, 2024).

SMEs

SMEs' insolvency levels this year to date are only broadly in line with 2024 (Delloite, 2025).

European startup survival is roughly 45% at the five-year mark, on par with U.S. and Chinese averages. However, deeper analyses (OECD, 2023) show that leadership gaps, capability deficits, and culture-related weaknesses, like premature scaling without mature people systems, are recurring drivers behind many failures.

• According to CB Insights (2021), nearly 1 in 4 startup failures (23%) are caused by not having the right team, with another ~13% linked to founder–investor conflict and disharmony. In other words, roughly a fifth of all failures are directly tied to people's risk, not funding.
• European SMEs invest significantly less in training, often under 2% of payroll compared to 3–4% in larger firms, making them vulnerable amid scaling pressures (2024).

Many SMEs and startups lack the resources for a full-time Learning & Development team. This is where a Fractional coach adds real value.

The Hidden Risks of Scaling, and How a Coach Bridges the Gap

Leadership Gap is costly

• Many startups struggle with limited leadership experience and formal management training. A ResearchGate study emphasizes leadership as a top challenge for growing SMEs (Kindström et al, 2022).
• VCs replace founders at non-trivial rates: academic estimates range (Ewens, Marx, 2018), in an HBR article, they summarize that 20 to 40% of founders do not remain in their original CEO role (often replaced when the company needs different capabilities).
• There is causal evidence that, in some contexts, replacement improves performance.
• OECD research (2023) emphasizes that macro shocks, financial access, and human-capital/management capacity are central to SME fragility, and people & governance are recurring themes.

In practice, this is a culture and learning challenge. 82% of managers lack formal training (Raval, 2025), which means leadership gaps aren’t just about experience; they’re about missing investment in development.

The Strategic Value of Coaching:

I help founders and key hires develop leadership skills, build succession pathways, and step confidently into scaling roles.

Talent Challenges

• Access to skilled talent remains a critical barrier.
• World Economic Forum: 75% of companies report talent shortages impacting growth (WEF, 2022).
• Skillsoft: Only 10% of employees have the skills needed for strategic objectives; leadership and technical expertise are most lacking (Woollacott, 2025).
• Senior hires take 45–60 days to fill—a delay that derails momentum. With 75% of companies reporting talent shortages (WEF), SMEs cannot afford to lose critical roles.
• Many SMEs struggle with the adoption of change. Engagement in transformation projects is often below 50%, compared to over 70% in larger firms, reflecting cultural friction rather than process alone (OECD, 2023).
• For SMEs, the lack of structured learning systems compounds the problem. Without dedicated HR/L&D, talent gaps widen, and change initiatives often see <50% adoption in SMEs compared to ~70% in larger firms (OECD, 2023).

The Strategic Value of Coaching:

I provide L&D coaching to develop leadership, technical capability, and strategic thinking, helping SMEs retain and grow critical talent without a full L&D team.

Premature Scaling

• Rapid expansion often overwhelms teams and processes.
  ScienceDirect research shows scaling is associated with employee burnout and reduced job satisfaction (‌Genedy et al, 2024)
• Business planning guides identify unclear leadership and talent bottlenecks as common growth obstacles (Huubster, 2024).
• Key-role vacancies exceeding 30 days correlate with a 41% higher insolvency risk. Employee engagement (eNPS > 20) is often neglected, fuelling burnout.

The Strategic Value of Coaching:

I design leadership and cultural frameworks that allow scaling at a sustainable pace, reducing burnout and performance risk.

Funding, Regulatory & Compliance Risks

• Funding gaps can stall growth; investor confidence often hinges on leadership capability.
• Regulatory complexity in Ireland, France, and across Europe creates friction.
• GDPR, labour laws, and upcoming regulations carry significant financial risk.
• Investors Demand People-Centric Strategies
• Investor confidence hinges on leadership capability. Yet only 1 in 5 Irish SMEs has a succession plan for critical roles.

The Strategic Value of Coaching:

While not managing legal compliance, I integrate awareness into leadership and culture, ensuring teams understand implications and embed good practices into daily operations.

Addressing the Cost Objection: Can You Afford Not to Invest in Coaching?

Many founders and SME leaders hesitate to invest in coaching, viewing it as an unnecessary expense. But when you compare the cost of coaching to the cost of failure, the decision becomes clear: coaching is a strategic investment that saves money in the long run.

• For SMEs: The Cost of Failure is Measured in Millions
• The average debt of a failed Irish SME is €2 million.
• With 421 insolvencies in H1 2025, the financial risks of inaction are rising.
• A coaching engagement (€5k–€20k annually) is a fraction of the cost of insolvency, yet it builds leadership capacity to prevent collapse.
• "The cost of coaching is minimal compared to the cost of losing investor confidence or facing insolvency."
• For Startups: The Cost of Waiting is Runway Burn
• Every month without scaling-ready leadership burns €50k–€100k in salaries and overhead.
• 23% of startup failures are due to not having the right team.
• 20–40% of founders are replaced by VCs due to leadership gaps. Coaching is a cost-effective way to avoid this fate.
• "Coaching costs less than one month of runway but can add years to your survival."

The Time to Act Is Now: Why Startups & SMEs Need Coaching

Scaling is about people, not just product or capital. For SMEs and startups without in-house L&D, a coach provides targeted leadership development, cultural guidance, and strategic people capability, helping the business grow sustainably.

Whether you’re an SME facing rising insolvency risks or a startup burning precious runway, the evidence is clear:

• Only half of Irish startups survive five years—and SME insolvencies remain high.
• Leadership gaps are costly: Most managers lack training. Coaching turns them into confident leaders.
• Talent shortages stifle growth: Coaching develops internal talent, reducing reliance on long, risky hires.
• Premature scaling burns teams out: Coaching builds resilient cultures that sustain growth.
• Investors demand people strategies: Coaching demonstrates robust leadership and succession planning, key to securing reinvestment.

👉 Coaching isn’t a luxury. It costs less than failure, less than one lost hire, and less than a single month of runway.
The real question isn’t whether you can afford coaching, it’s whether you can afford to scale without it.

Take the First Step

I’ve created a Free Self-Assessment tool:

Uncover Blind Spots in Leadership, Talent & Culture.

Is Your Business Ready to Scale?

In just a few minutes, you’ll:

• Reflect on your leadership, culture, talent, and financial readiness.
• Surface potential blind spots that could slow down or derail growth.
• Gain clarity on whether coaching could help you scale with confidence.

💡 The self-assessment isn’t about scoring — it’s about asking the right questions before scaling too fast.

Next Step: Contact me today to discuss how coaching can help your business scale sustainably.

References:

·      CB Insights (2021). Why Startups Fail: Top 12 Reasons. [online] CB Insights Research. Available at: https://www.cbinsights.com/research/report/startup-failure-reasons-top/.

·      Deloitte. (2025). 2025 insolvency levels in line 2024. [online] Available at: https://www.deloitte.com/ie/en/about/press-room/insolvency-levels-2025-inlines-2024.html [Accessed 8 Sep. 2025].

·      Ewens, M. and Marx, M. (2018). Research: What Happens to a Startup When Venture Capitalists Replace the Founder. [online] Harvard Business Review. Available at: https://hbr.org/2018/02/research-what-happens-to-a-startup-when-venture-capitalists-replace-the-founder.

·      ‌Ewens, M. and Marx, M. (2016). Founder Replacement and Startup Performance. SSRN Electronic Journal. doi:https://doi.org/10.2139/ssrn.2717124.

·      ‌‌Future Readiness of SMEs and Mid-Sized Companies: A Year On N O V E M B E R 2 0 2 2. (n.d.). Available at: https://www3.weforum.org/docs/WEF_Future_Readiness_of_SMEs_and_Mid_Sized_Companies_A_Year_On_2022.pdf.

·      Genedy, M., Hellerstedt, K., Naldi, L. and Wiklund, J. (2024). Growing pains in scale-ups: How scaling affects new venture employee burnout and job satisfaction. Journal of Business Venturing, [online] 39(2), p.106367. doi:https://doi.org/10.1016/j.jbusvent.2023.106367.

·      Gordon, R. (2023). Business Failures in Ireland Up By 54%. [online] Dublin Chamber Portal. Available at: https://www.dublinchamber.ie/News-and-Media/Press-Releases/ArtMID/1536/ArticleID/534/Business-Failures-in-Ireland-Up-By-54? [Accessed 8 Sep. 2025].

·      Huubster (2024). Top 10 challenges of scaling a business. [online] Excellent Business Plans. Available at: https://excellentbusinessplans.com/10-challenges-of-scaling-a-business/.

·      ‌Ireland, B. (2024). Ireland’s Business Failure Rate Stats & Insights. [online] BusinessIreland.uk. Available at: https://www.businessireland.uk/business/what-is-the-business-failure-rate-in-ireland/.

·      Ihle, J. (2024). The scale challenge facing Irish start-ups. [online] Thetimes.com. Available at: https://www.thetimes.com/world/ireland-world/article/the-scale-challenge-facing-irish-start-ups-9qsmsd388 [Accessed 8 Sep. 2025].

·      ‌Average debt of failed SMEs was €2m in 2022. (2023). www.rte.ie. [online] Available at: https://www.rte.ie/news/business/2023/0109/1345521-average-debt-of-failed-smes-was-2m-in-2022/.

·      Kindström, D., Carlborg, P. and Nord, T. (2022). Challenges for Growing SMEs: a Managerial Perspective. Journal of Small Business Management, 62(2), pp.700–723. doi:https://doi.org/10.1080/00472778.2022.2082456.

·      ‌OECD (2023). OECD SME and Entrepreneurship Outlook 2023. [online] Available at: https://www.oecd.org/content/dam/oecd/en/publications/reports/2023/06/oecd-sme-and-entrepreneurship-outlook-2023_c5ac21d0/342b8564-en.pdf.

·      ‌Raval, A. (2025). The UK has a problem with corporate scaling. [online] @FinancialTimes. Available at: https://www.ft.com/content/9b0c51e5-e26f-4b3b-aacd-9a2658efe3c6? [Accessed 8 Sep. 2025].

·      Workramp.com. (2024). 4 Ways to Budget for Your L&D Program in 2024 - My Framer Site. [online] Available at: https://www.workramp.com/blog/how-to-budget-for-your-ld-program [Accessed 8 Sep. 2025].

·      ‌Woollacott, E. (2025). Rampant skills gaps should be a ‘wake-up call for every leader’ as AI, tech talent shortages hamper growth. [online] IT Pro. Available at: https://www.itpro.com/business/careers-and-training/rampant-skills-gaps-should-be-a-wake-up-call-for-every-leader-as-ai-tech-talent-shortages-hamper-growth.