What is the key to the survival of the first year of activity

  • By David Molnar
  • November 5, 2017
  • Comments Off

Only 66% of small businesses will see their first birthday. However, it is even worse later. One of the most frequently mentioned reasons for business failure is the lack of investment in development.

Microentrepreneurs account for over 96% of all companies registered in Poland. However, running a business is not an easy matter. The main reason for the collapse of most companies is the lack of investment in development. Despite the willingness of entrepreneurs, they are often unable to do so, mainly due to the lack of sufficient funds. External financing could be a solution, but almost 1 in 3 entrepreneurs will receive a negative decision.

Refusal of external financing

One of the most frequently mentioned reasons why entrepreneurs receive a negative decision is lack of creditworthiness. This is the response of 14% of micro-entrepreneurs. In second place, too short a time of running a business is mentioned (10%). Alternatively, funds from public programmes can be used. Check out our current recruitments!

What is the entrepreneur’s use of the obtained funds for?

Once the entrepreneur obtains additional funds, he or she will most often transfer them for the purchase of business equipment (68%). Every fourth company intends to develop its activity by means of a loan, credit or other form of financing. Most often, this is manifested by broadening the scope of the company’s services (43%), leasing the company’s real estate (21%) or marketing activities (9%). However, what is also interesting, as many as 14% of entrepreneurs would use the obtained funds to repay their liabilities.

What is the key to the survival of the first year of activity
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