700,000 SMEs closed last year in losses

700,000 SMEs closed last year in losses

26% of small and medium-sized businesses recorded a decrease in their turnover in 2023 compared to 2022, while 47% saw an increase in their revenue. Besides, 23% of these businesses ended 2023 with lossessome 700,000 small and medium-sized companies, in contrast to the 64% that closed it with profits, according to data compiled by the Barometer of Administrative Managers (gA).

During the week of February 5 to 9, the General Council of the Colleges of Administrative Managers carried out a new edition of the gA Barometer, through a survey carried out among 6,000 practicing Administrative Managers. The high number of responses guarantees the reliability of the data obtained, with a confidence level of 95% and a margin of error of ± 5%. This survey focused exclusively on information related to small and medium-sized businesses.

In the opinion of Fernando Jesús Santiago Ollero, president of the General Council of the Colleges of Administrative Managers, “we continue with more than 700,000 businesses in losses, 600,000 with serious liquidity problems, and about 700,000 businesses that have increased their debt last year, the The same number of businesses that last year invoiced less than in 2022. And although the percentage of businesses that operate outside the systemup to 12%, is still a high number and a tremendously negative figure.”

39% of companies have managed to reduce their debt level during the last year, while 26% have increased it. It is estimated that around 600,000 small businesses continue to face serious liquidity problems, which has led at least 12% of them to operate “in the shadows” of the system. On this occasion, the survey asked about the practice of not reporting all salaries paid by businesses, revealing that 5% of companies have at least one undeclared salary.

According to data from the gA Barometer, 7% of existing companies were created during the last year. Of these new constitutions, 6% (0.42% of the total companies) come from entrepreneurs who previously had a business but closed it due to the pandemic.

Another important fact revealed by the Barometer is that 13% of companies have requested European Next Generation Funds; 76% of them have received a positive response, while 6% have had their request denied. The remaining 17% are still waiting for a resolution.

56% of Administrative Managers admit to having clients who could have requested Next Generation Funds, but they did not do so due to lack of transparent information (55%, multiple responses were allowed), the perception that the procedures are too complicated (45%), or because they did not meet the required requirements (38%).

It should be noted that 64% of managers consider that 2023 was a positive year for business. Of these, 34% expect 2024 to be even better, 41% believe it will be similar, and 25% fear it will be worse. On the other hand, 36% of GAs consider 2023 to be a difficult year. Among them, 17% trust that 2024 will improve39% expect it to be similar, and 44% fear it will get worse.

“The majority of my colleagues consider that 2023 has been a good year,” Santiago continues, “but liquidity problems are persistent and the debt of many businesses is increasing, in the same percentage of businesses that have invoiced less. I sincerely believe that the resistance level of many of them has already been reached and that 2024, with the uncertainties that we are facing, may be the final straw for many of them.”

The president of the Administrative Managers believes that “we must focus on proposing solutions for that percentage of businesses that are not getting back on their feet, around 20/25%, because if they disappear, many workers will go unemployed.” “I hope that the optimism of many of my colleagues that 2024 will be better is fulfilled and thatSomeone take the reins of those who are badly injured and we can recover the majority,” concludes Fernando Santiago.


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