In 2025, 53,030 new companies were set up in Portugal, according to the Informa D&B Barometer. That is the highest figure in 20 years. Between January and October, the North led the way with 14,200 new incorporations, up 5% on the same period the year before. These numbers say a great deal about the appetite for starting a business. They say far less about what happens next.
What happens next is well documented. According to INE, Statistics Portugal, 73.8% of companies survive their first year, and only 47.7% make it to the end of their third (2024 data, 1.2 percentage points lower than the year before). Put simply, one in four new businesses closes before its first birthday, and after three years more than half have gone.
In my years as a coach, I often meet business owners who treat the first year as an exercise in heroic survival: work harder, say yes to everything, sort it out later. As an engineer, I prefer to see it as a system that has to be designed. Year one is not just about holding on. It is about laying the foundations that will decide year three.
The picture changed in 2026
Those who started a company in 2025 caught a favourable cycle. Those starting now face a different one. Informa D&B reports that, up to July 2026, company formation fell by 4.2% to around 32,300 new companies, while insolvencies rose by 5%, with 1,216 new proceedings. The slowdown has been visible since the start of the year.
That is no reason to abandon a project. It is a reason to run it with more discipline. In a slowing market, first year mistakes cost more, because there is less room to cover them with volume.
Three mistakes I see most often in year one
1. Confusing turnover with cash
An invoice is not money in the bank. The Informa D&B Payment Behaviour study (2026) shows that only 20.2% of companies in Portugal pay within the agreed terms. A new business that sells on 30 day terms and is paid in 60 has to finance the gap. If it has not planned for that, the first crisis will not come from a lack of customers, but from a lack of cash.
2. Not knowing what each customer costs
Plenty of owners know what they billed last month, but not what it cost to win each customer, nor what that customer is worth over time. Without those two figures, every marketing decision is a gamble.
3. Being the company's only system
In year one, the founder does everything. That is normal. The problem starts when none of it is written down, measured or capable of being delegated. The business ends up depending on one person, and that person becomes the bottleneck to growth.
A minimum dashboard for the first 12 months
You do not need expensive software. You need the discipline to look at the same numbers every week. This is the dashboard I usually suggest to owners in their first year:
- 13 week cash flow forecast: expected money in and out, week by week, updated every Monday.
- Number of leads: how many prospects got in touch this week, and through which channel.
- Conversion rate: out of every 10 proposals, how many close.
- Average sale value: and whether it is rising or falling.
- Gross margin by product or service: not everything you sell makes a profit.
- Average collection period: how many days, in practice, customers take to pay.
Four of these indicators belong to the 5 Ways we use at ActionCOACH to grow profit: number of leads, conversion rate, number of transactions per customer, average sale value and margin. A small improvement in each one has a multiplied effect on the bottom line.
A hypothetical example makes the point. Imagine a first year services business with 40 leads a month, a 25% conversion rate, an average sale of 1,000 euros and a 30% margin. That is 10 customers, 10,000 euros of turnover and 3,000 euros of margin. Improve each of those four figures by 10% and the monthly margin rises to around 4,400 euros. No miracle, just four small, measured improvements.
Mastery before scale
In the ActionCOACH methodology, a business moves through six steps: Mastery, Niche, Leverage, Team, Synergy and Results. Year one almost always belongs to the first step, Mastery: of your time, your money, your delivery and the business itself.
In practice, that means answering a few simple questions clearly before thinking about growth:
- How much do I need to bill each month to cover every cost, including my own salary?
- Who is my ideal customer, and where do I find them?
- How many hours a week do I spend selling, and how many delivering?
- If I stopped for two weeks, what would stop working?
- Which process repeats most often, and has it been written down yet?
Owners who answer these questions well in year one reach year three with a business. Those who do not reach it, if they reach it at all, with a job they have created for themselves.
Plan in 90 day cycles
An annual plan for a business that is only a few months old is nearly always fiction. I prefer 90 day cycles: three to five clear objectives, each with an owner, a number and a date. At the end of each cycle, you review what worked, drop what did not and set the next cycle. That is the principle behind our 90 Day Planning Workshop, and it is a habit any owner can start on their own.
The most important part is accountability. Writing objectives down is easy. Delivering them takes someone, or something, that makes you report back every week. It might be a business partner, an informal board or a coach. What does not work is nobody.
Your action for this week
This week, set aside two hours and build a 13 week cash flow forecast in a simple spreadsheet. List every payment you expect to receive, with realistic dates (not the invoice dates), and every outgoing you already know about. If the balance turns negative in any week, you know what your number one priority is.
The 2025 record shows that plenty of people have the courage to start. The INE figures show that courage is not enough. If you are in your first year, or about to start, and want these numbers working in your favour, the ActionCOACH Porto team would be glad to have a no obligation conversation about your business.