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MIL OSI Translation. Region: Russian Federation –

Source: Ministry of Economic Development (Russia) – An important disclaimer is located at the bottom of this article.

strong>According to a study by the Russian Ministry of Economic Development and Sberbank, based on the results of the 4th quarter of 2023, small businesses positively assess their financial situation and look positively to the future. Entrepreneurs aged 18-35 are the most optimistic.

“Based on the results of the study, we note the positive dynamics of SME development: entrepreneurs are resistant to turbulence in the economy and have a positive assessment of their prospects. The share of entrepreneurs who rated their financial situation as good increased from 21% in the 3rd quarter to 25%. Another 21% of respondents noted its improvement. For more than half of entrepreneurs, revenue remained stable in the past quarter. The share of those expecting the economy to worsen in the next six months has decreased significantly – from 42 to 36%. At the same time, businesses have requests for special tax regimes and participation in government orders and procurement. Meanwhile, in 2023, state-owned companies purchased goods and services worth 8 trillion rubles from SMEs. The increase in the volume of purchases from SMEs by 2022 amounted to 13.5%,” noted Deputy Minister of Economic Development of the Russian Federation Tatyana Ilyushnikova.

Entrepreneurs aged 18-35 are most positive: 40% of respondents reported an improvement in the financial situation of their business.

In the fourth quarter, the key problem for entrepreneurs remained the increase in prices of suppliers, as stated by 70% of respondents. A third of those surveyed faced problems with supplies from abroad, another third with a drop in demand, and 34% with an increase in sales costs.

Government support, financing and profit

In the last quarter of 2023, the share of entrepreneurs who believe that the state helps small businesses increased (from 26 to 30%). Among the government support measures that entrepreneurs are counting on, the demand for special tax regimes has increased.

Entrepreneurs have become less likely to take out business loans and are more likely to invest personal funds in the business. However, there were 34% of those wishing to attract additional financing. Among other types of support, assistance with finding potential investors is in demand. 2% would like to receive legal support, the same number of respondents would like assistance in developing a business plan.

When asked about attracting business financing, 34% of entrepreneurs said that they would like to take advantage of this opportunity, 65% were against it, and 1% found it difficult to answer. Of those who would like to use financing instruments, bank loans (52%), public and private grants (40%), leasing (24%), investments (20%), collective financing instruments (7%) were mentioned as sources of raising funds ), factoring (3%), loans from state microfinance organizations (2%).

Entrepreneurs mostly invest profits back into their business (76%) or spend them on personal needs (60%). Individual entrepreneurs more often spend money on personal needs and invest, but not in their business. Legal entities prefer to invest in their own business. Entrepreneurs aged 18 to 35 are more likely to place their profits in a deposit or invest. The higher the annual turnover, the more often they invest back into the business and the less often they spend on themselves.

Impact of the key rate

According to the study, over half of the respondents did not immediately feel the increase in the key rate: 42% noted that this had already changed their business. Among those who encountered difficulties, 68% spoke about the rise in the cost of loans, another quarter of respondents spoke about a decrease in effective demand, 21% spoke about an increase in purchase prices, and 18% spoke about inflation in general.

The increase in the key rate most affected businessmen from large cities and those with an annual turnover exceeding 5 million rubles (55%). At the same time, only 10% are taking any measures about this – from reducing the number of loans and optimization, to increasing the volume of work and searching for investors.

Plans and values

The value orientations of entrepreneurs differ by age group. Thus, entrepreneurs under the age of 35 value financial well-being, self-realization and career; those aged 36-45 often talk about careers, but less often about health and communication with friends. For entrepreneurs from 46 to 55 years old, family is especially important, and from the age of 56, businessmen value more what is not related to work – loved ones and health.

Note; This information is raw content directly from the source of the information. This is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and or sentence structure not be perfect.

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