A third of new companies close within the first four years of their existence, new data shows.
The most vulnerable period for startups is years three and four, the analysis of insolvencies and general closures carried out by CRIFVision-net found.
The study also shows that a quarter of all insolvencies involve companies established in the last four years.
"This underscores the need for increased local and government support, acknowledging challenges business owners face such as high energy, rental costs and the continued uncertainty caused by inflation," said Christine Cullen, Managing Director of CRIFVision-net.
"A need for enhanced assistance during the first five years of operation is crucial," she said.
"If we can proactively address these challenges, the Irish government can create an environment that nurtures the growth and sustainability of emerging businesses leading to a more robust and resilient economy," she added.
Overall the company found that a total of 22,581 new companies were started last year.
That represents an increase of over 4% or 944 on the previous year, when the lowest number of new companies since 2016 were founded.
The level of start-up growth in 2023 was the second highest increase since 2017.
2023 was also different though in that the bulk of the new firms set-up were outside of the major urban hubs.
"A growing trend in the establishment of start-ups outside the major urban centres could be influenced by the ongoing housing crisis, coupled with low unemployment rates," said Ms Cullen.
The county with the largest percentage increase in new firms was Offaly where a total of 224 new businesses were set up, up 28% on a year earlier.
Leitrim saw the largest percentage decrease, down 9% to 111.
Dublin recorded the largest number of new startups, at 9,883.
Most sectors saw an increase in new firms with motoring recording the largest percentage growth at 23%, fishing up 17% and transport, storage and communication up 10%.
However, surprisingly manufacturing saw a decrease in news businesses, down -10%, while real estate was down -2% amid difficult market conditions.
