The impact so far of the Coronavirus pandemic (COVID-19) on the country’s fast growing entrepreneurship is concerning, according to new research by Endeavor Greece on sales and employment trends, the readiness of Greek businesses and their ability to adapt to the new situation. A sample of 100 fast-growing small and medium–sized enterprises (SMEs) with a turnover of up to €80 million participated in the survey, which was completed on Monday, March 16th. In 2019 they achieved high growth rates that reach up to 100%.
Research has shown that within just a few days of the spread of Coronavirus (COVID-19) in our country, 60% of businesses have already begun to record a slight to very large drop in sales, which is expected to affect their revenues for the entire year, a burden that could reach 50% of their revenues. At the same time, their profitability is under strong pressure as a result of the loss of sales channels (restaurants being a prime example), while the supply chain also faces serious problems. 70% of these companies are already facing a shortage of basic raw materials that they obtain from abroad, imports that are crucial for their smooth operation.
In terms of employment, results show that almost a third of companies expect to be forced to reduce their workforce by 25%, while 5% of companies expect their staff to be reduced by half. However, it is worth mentioning that 65% of respondents are currently not planning to limit their human resources.
Regarding the duration of the current crisis’ impact on the market, the forecasts of entrepreneurs diverge, as 4/10 entrepreneurs believe that the crisis will end within the next two months and that a rapid recovery will follow. At the same time, 4/10 believe that volatility will continue for a longer period, that may last until the end of 2020.
The data that emerges on the preparedness of Greek businesses to respond to the crisis is very interesting as well. 60% of the participating companies state that they had no business continuity plan when the pandemic started, while 1/3 companies did not have the necessary infrastructure to support remote working. 6/10 entrepreneurs state they were slightly to not at all prepared for the crisis.
However, Greek companies display impressive adaptability and fast reflexes. Half of them adapted their operating model or even their product itself in less than two weeks. Regarding the automation of their operations, 7/10 entrepreneurs say that they have automated their operations to a satisfactory degree, while 2/10 state that their degree of automation is excellent.
The pandemic significantly redefines the long-term priorities of Greek companies. Workplace digitization, crisis management communication and business continuity have suddenly come to the forefront. At the same time, digital reform, automation and social responsibility continue to play an important role among the priorities of entrepreneurs.
Finally, the participating companies stated that the areas where they expect to face the greatest challenges are supply chain, liquidity, sales and exports, whereas their first and greatest needs focus on financial assistance and relief measures from the state. At the same time, more than 40% of entrepreneurs said that synergies with other Greek companies and the establishment of business networks for their support is their next urgent need.
To sum up, the crisis caused by the rapid spread of Coronavirus (COVID-19) will slow down the growth rates of Greek companies that will be asked to review their priorities in the coming period. Businesses will need both capital and state support, as well as strategic alliances, in order for them to be able to maintain the high growth rates that they achieved last year (2019). Lastly, although the optimism of entrepreneurs is modest, fast-growing companies show a strong disposition for meaningful transformation and an emphasis on sustainability and partnerships.
On the occasion of the current study, Panagiotis Karampinis, Managing Director of Endeavor Greece, stated: “The survey reflects the assessments and expectations of a particularly dynamic segment of the Greek entrepreneurial scene and our common goal is to not let Greek businesses get damaged irreparably by a temporary crisis. It is important to understand what kind of support our country’s small and medium-sized enterprises (SMEs) will seek in order to retain or to quickly restart growth. What is encouraging is that Greek entrepreneurs show impressive adaptability. They have revised their priorities and they are now strongly focusing on digital transformation, automation, and partnerships, something that will have beneficial and lasting effects on the country’s entrepreneurship. For this exact reason, we are optimistic that Greek entrepreneurship will come out even stronger at the end of this crisis”.