As many as 21 per cent of the Polish microenterprises plan to expand their operations within the next two years. This means that in 2016 every third (36 per cent) microenterprise will be operating in more than one market, as revealed by the latest survey ordered by the Citi Handlowy Kronenberg Foundation. Among the companies that have already ventured domestic or foreign expansion, as many as 94 per cent consider this a positive step, and 96 per cent plan to enter more markets.
Most surveyed companies plan to expand the scope of their activity within Poland, but 36 per cent intend to start operating abroad as well. In Poland, most entrepreneurs are willing to expand to the Mazovian (16 per cent), Silesian (13 per cent) and Greater Poland Voivodeships (11 per cent). The most popular foreign market is Germany - 34 per cent (of companies that want to try their luck abroad) are planning to do business there.
According to the data of the Central Statistical Office, Germany is still the most popular export destination in Poland, so it comes as no surprise that this market is chosen by most microentrepreneurs, too. Most certainly, the economic and regulatory stability in Germany also support such a choice, says Tomasz Daniun, Retail Segment Manager at Citi Handlowy. The most popular destinations of the domestic expansion are the voivodeships with a low unemployment rate and large competition. This provides an opportunity for growth, but it also requires from the entrepreneurs a good insight into the market, getting prepared for new investments, a strictly defined action strategy and an innovative approach to the recipients of goods and services.
What factors play a decisive role in choosing a given place as the new area of activity? The reasons differ depending on whether the companies decide to develop within Poland or abroad. In the case of enterprises focusing on the Polish market, the key factor turns out to be location (38 per cent), while the potential market for the goods or services comes only second (19 per cent). Interestingly, the least considered factor are the existing business relations (3 per cent). In the case of companies planning to expand abroad, the most important factor is the potential demand for their services (31 per cent), development opportunities (17 per cent) and the existing business relations (14 per cent), with location being the least important (6 per cent).
Microentrepreneurs who plan foreign expansion choose their destination based on the possibility of growth for their company, says Tomasz Daniun. Of course, the decision to expand to another country always involves higher risk, but it also helps increase the chances of success. Importantly, 94 per cent, i.e. almost all companies that have already decided to expand their operations, do not regret this decision, and 96 per cent of them plan to enter new - local and foreign - markets within the next two years.
Microcompanies which intend to expand their scope of activity contemplate developing in other spheres of activity as well. As many as 71 per cent of them plan to introduce new services or products into their offer within the next two years, compared to 42 per cent among those companies which do not plan expansion. A similar trend is visible in revenue growth forecasts - every second (55 per cent) development-oriented company expects an increase in revenue within the next two years. This optimism is shared by only 18 per cent of those companies which do not plan to expand their area of operation.
Survey: Expansion of Microenterprises
About the survey:
The survey was conducted at the behest of the Citi Handlowy Kronenberg Foundation using the CATI technique, in April and May 2014. The survey was conducted on a random, representative sample of microenterprises in Poland (n=1456), including microcompanies which have undertaken expansion or plan to do so.
