The economic slowdown will last at least one more year – 3/4 of one-person businesses predict this, and the worse a given entrepreneur assesses his current financial situation, the more pessimistic his forecasts are, according to the NFG survey. As a result, 77.6% of micro-business owners have made or intend to make changes such as cost-cutting and greater verification of contractors, among others.
“The most popular of these is reducing company costs. This is indicated by 41% of entrepreneurs participating in our survey, but one in eight, for example, has found a solution in the form of buying on installments. 14% of micro businesses want to invest in advertising and marketing to attract new customers. It is worth knowing that promotional services, as well as licenses, programs or training can also be financed by installments. This will allow the company to continue growing without having to abandon key investments,” said NFG expert Emanuel Nowak.
The “Business Spending Barometer” survey shows that only less than 25% of sole proprietorships (JDGs) predict that the slowdown will end within one year. Three-quarters of entrepreneurs predict it will last much longer: 35.6% indicate it will last up to two years, while another 40% indicate more than two or even three years. More pessimistic are entrepreneurs who already have a poor assessment of their own financial situation (66% of them believe the slowdown will last more than 2-3 years), as well as those in manufacturing (almost 80% of indications) and those operating for more than 5 years in the market (77% of indications).
According to NFG, the ongoing economic downturn is causing JDGs to look for various solutions to stay afloat. 77.6% of respondents say they have already taken or will soon take such measures. The most popular of these is reducing company costs. This is indicated by 41% of entrepreneurs taking part in the survey, and one in eight, for example, has found a solution in the form of buying on installments. 14% of micro businesses want to invest in advertising and marketing to attract new customers. Entrepreneurs also point to: increasing the pool of company savings (15%), reducing debt in the company (14%) or verifying the financial condition of contractors before entering into cooperation (16%).
When asked what action they will take first when corporate purchases become too expensive and exceed the companies’ financial capacity, owners of sole proprietorships indicate first and foremost passing the costs on to their customers by raising the prices of the products offered (43%). One in three companies will focus on reducing operating costs, and one in four will forego some corporate expenses. One in five microenterprises does not yet have plans to deal with the situation of rising prices for company purchases. Microfirms that already have a bad assessment of their financial situation are 3 times more likely to consider suspending their business or closing down when prices for products and services become too high, it was reported.
The nationwide survey “Business Spending Barometer” was conducted on behalf of the factoring company NFG by IMAS International, in March/April 2023, on a group of 508 owners of sole proprietorships.
Source: NFG and ISBnews
