Wed, Sep 18, 2019 - Page 12 News List

Only 23% of local start-ups making profit, report says

By Natasha Li  /  Staff reporter

Only 23 percent of Taiwanese start-ups are making a profit, PricewaterhouseCoopers Taiwan (PwC) and the Taiwan Institute of Economic Research (台灣經濟研究院) said in a joint report which examined the nation’s ecosystem of innovative businesses.

While up to 53 percent of start-ups are reporting losses, another 19 percent have not yet declared any revenue this year, the report said.

There are several reasons behind the low percentage of profitable start-ups, including high upfront costs stemming from early research and development, the lack of an efficient business model and a crowded market, it said.

PwC said that the overall economic outlook, financial management and knowledge of the market could also have negatively impacted the performance of the start-ups, adding that entrepreneurs should invest in their management skills to achieve a balanced bottom line.

The report found that strategic planning for international markets was lacking at start-ups, with only 11 percent of overall revenue coming from overseas.

While 78 percent of local start-ups have designated their ultimate goal to be reaching global markets within three years, 60 percent of them have yet to recruit or foster talent in preparation for an overseas expansion, the report said.

Another 56 percent have yet to promote themselves in overseas markets, the report said, adding that most face difficulties due to limited resources.

About 48 percent of local start-ups voted China the most desirable overseas market, while 46 percent viewed Southeast Asian nations and India as their favored destinations, the report said.

North America was the third-most attractive market, it said.

Most start-ups wanted more government support in respect of finances, taxation and access to overseas markets.

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