CONFIDEX survey: The impact of the pandemic, felt more brutally in the case of small companies

Companies with a turnover of less than 100,000 Euro per year have felt more brutally the effects of the pandemic last year, half of the managers considering that their own companies are affected by Covid-19, and business decline is, in this case, of 20 percent in Q4/2020 compared to Q2/2020, according to CONFIDEX Q4 2020 results made public by Impetum Group. Moreover, the increase in turnover, estimated for 2021 as compared to 2020 is by around 5 times smaller in the case of small companies, as compared to major players (1 percent vs. 5 percent).

Therefore, managers of small companies perceive more acutely the impact of the crisis generated by the pandemic and have a lower average mood indicator than those in larger companies: 4.6 versus 4.9. The difference in terms of profit decline in Q4/2020 vs. Q2/2020 is enlightening in this regard: minus 22 percent for small companies and only 12 percent for large companies. Moreover, the profit is expected to continue to fall for smaller players, by 4 percent in 2021, while large companies already estimate growth for this year.

“The survey shows us that the size of a company is relevant, especially in the difficult periods of the economy. Therefore, companies with a turnover of less than EUR 100,000 per year have felt much more severely the effects of the pandemic, and the return is perceived as more distant. Moreover, most of them expect a decrease in profit this year, while major players already estimate an advance thereof, says Andrei Cionca, CEO & Co-founder of Impetum Group.

„From our point of view, this is a key moment for small companies, because they have the opportunity of taking a big step towards an entrepreneurial culture based on partnership to get through this crisis”, concluded Andrei Cionca.

Difficulties in the cash flow area are obvious, half of the managers claiming that they had problems with working capital. Under these circumstances, only 10 percent of the managers of small companies are relaxed or very relaxed in terms of how the national economy evolves, while 19 percent of them are concerned or very concerned.

Small companies are less confident than the large ones in terms of the positive effect of the vaccination campaign on the economy and on their own business. Therefore, only 66 percent of them think that it will have a positive impact on their own business, compared to 73 percent in the case of large companies.

”The more pessimistic vision of small entrepreneurs is also seen in the way they look at the impact on a larger scale, beyond their own yard. Therefore, approximately 80 percent of the managers of small companies consider that economies (global, European and national) are affected to a “large” and “very large” extent, compared to 74 percent in the case of larger companies“, Andrei Cionca, CEO & Co-founder Impetum Group, also said.

At the same time, small companies don’t have an equally solid basis for recovery in 2021, given that the main measures taken during the pandemic targeted the reduction of staff recruitment and cutting marketing and research expenses, as well as investments.