"Ways of dealing with the crisis in micro - entreprises"
Polish micro-entreprises are prepared for a crisis, according to a survey carried out by The Citi Handlowy Leopold Kronenberg Foundation with the cooperation of the Microfinance Centre and TNS Polska. A large majority of small entrepreneurs realize the seriousness of the problem and its possible negative impact on their businesses. Most of them have implemented anti-crisis measures, quickly adapting themselves to market changes.
From our survey, one can draw a fundamental conclusion, says Tomasz Pol, Director of Product Management at Citi Handlowy, responsible, among other things, for the development of offers for micro - entrepreneurs and Citigold customers, and also a member of the award committee of the Microentrepreneur of the Year 2012 competition. The Polish micro-entrepreneur is a person who pays attention to economic trends, is perfectly knowledgeable about the market and environment of his own company, and is also aware of the dangers that could threaten him. More than half the respondents admit that the crisis has adversely affected the functioning of their business, especially in terms of sales and customer numbers. However, it is important to note that three-quarters of them have, since the beginning of 2012, taken strong anti-crisis measures and half of them plan to continue them until the end of 2013. It seems comforting that a large majority of the respondents believe that "it won't get any worse" and that the situation of their companies at the end of 2013 will be similar to what it was at the end of 2012 or will change for the better, he adds.
The microentrepreneurship segment is exceptionally diverse with a variety of attitudes towards the economic crisis. The largest number of companies (27%) are focused on market opportunities and more often than others look for them in geographic expansion. These are relatively new entreprises, in good condition and very dynamic. They take a proactive approach towards crisis: they act as soon as crisis hit. Almost as large is the group of companies focused exclusively on survival, whose goal is to simply maintain their market position. 18% of them had experience in the past with conducting other types of business activities, and so more often than others see chances of success in this. Like companies focused on maintaining the status quo (one out of five surveyed), they do not take any anti-crisis measures. Companies focused on relationships (17%) have a completely different philosophy that puts an emphasis on maintaining good relations with various interest groups. Like those focused on market opportunities, they believe that their companies' situation will improve, however unlike them, they try to prepare for crisis ahead of time.
The current phase of the crisis can be felt much more than the previous one (2009-2010) and there is a widespread belief that it is equally or even more dangerous. Production firms are the least fearful, while trading firms are the most. For the majority of firms surveyed, the crisis is a real phenomenon; only 2% believe it does not exist. The survey shows that the bigger the business the more likely it is to take corrective measures: every second one plans to take measures already before the onset of a crisis or reacts immediately when a crisis hits.
How do we know that we are in a crisis? According to surveyed business owners who considered the crisis to be a real phenomenon, it manifests itself most often in a fall in turnover and customer numbers. This was experienced particularly by businesses dealing with trade, to a lesser extent by those whose activities are based on production, and least of all, by companies providing services.
What measures are companies taking to combat the crisis? According to the survey, they are focusing above all on limiting general costs (61%), including telecommunications services, and changing local conditions. 26% of measures are connected with workers, however only 13% of them involve layoffs. Nearly half the businesses taking anti-crisis measures implement them primarily in the area of product changes. This is reflected in the introduction of new services or products, as well as price reductions. To a lesser extent, the changes involve marketing and company processes.
Interesting facts:
- 84% of companies believe that the crisis is real,
- 66% of respondents declare moreover that it has an impact on the functioning of their firms; out of these, 46% have seen a fall in turnover (and profits) and in customer numbers (27%),
- the majority of microentreprises (67%) believe that the current crisis wave is similar to the previous one or even worse,
- segmentation of entreprises: focused on market opportunities 27%, focused on survival 26%, focused on maintaining their current position 22%, focused on relationships 17%,
- companies seeking to strengthen their current position are more focused on increasing turnover and profits (83% vs 77%), expanding market shares (73% vs 64%) and launching new products/services (53% vs 34%),
- the impact of the crisis is seen mainly in negative terms (fall in turnover and customer numbers),
- there is a widespread belief that the current crisis wave is as dangerous as (23%) or more dangerous than the previous one (37%).
The survey "Ways of dealing with the crisis in micro - entreprises" was conducted in April 2013 by The Citi Handlowy Leopold Kronenberg Foundation at Citi Handlowy with the cooperation of the Microfinance Centre and TNS Polska using the CAPI technique with a representative sample of 300 respondents.
