The impact of the 2-month lockdown on businesses and the day after for Greek entrepreneurship reflects a new survey conducted by Endeavor Greece on May 25-27th. The sample was 100 small and medium-sized enterprises (SMEs) from 15 different industries that achieved high growth rates in 2019. The survey captures the impact of the COVID-19 crisis in the performance, strategic planning and operations of businesses between March 15th- May 15th, as well as the degree of optimism both for the industry and the economy.
The survey focuses on the financial impact of the pandemic on businesses and it reflects the changes on business planning and the new reality.
According to the survey, half of the companies have paused partially or even completely their trading in the past two months, while 13% of them have completely stopped trading. Moreover, 57% of businesses recorded a drop in their annual revenues, with 17% of them recording a drop of 60-100%. However, 24% of participants recorded growth during that period.
In terms of employment, results show that over half of the participants have suspended either part or even all of their workforce. At the moment, only 10% of the companies have proceeded in layoffs and pay cuts, but the percentage is expected to increase significantly, as 30% of business owners state that they will proceed to salary and personnel reduction that may reach up to 20% by the end of 2020.
The data that emerges on the entrepreneurial support schemes that Greek businesses have been using to cope with the crisis is also very interesting.
Specifically, 51% of businesses stated that they have suspended a significant part of their workforce, while 35% of them have gotten a 40% reduction on their office rent. At the same time, 46% of the respondents have suspended their tax payments, while 55% have adopted measures of expanded financial relief. Finally, 20% of businesses have not used any support scheme yet.
The survey also reflects that 6/10 businesses face liquidity problems, as their cash runway allows them to continue operating for less than 6 months, while half of them (3/10) stated that they have zero cash runway. Only 15% of the respondents have secured liquidity for more than one year.
The pandemic redefines significantly the strategic planning of Greek businesses. Specifically, 53% of the participants operate based on the scenario that the recession will continue through 2020, 10% until the end 2021 and 3% until 2022. Only 34% of the respondents operate on the belief that they will be returning to their growth trajectory even during the summer of 2020.
Regarding the time needed for their industry to recover, 27% of the participants believe that it will return to the 2019 growth rate by the end of 2020, 46% estimate that the recovery will take place during 2021, while 17% does not expect to return to normal before 2022.
The survey also reflects that 7/10 entrepreneurs are satisfied with the automation level of their operations. In the same context, more than 60% of the respondents consider continuing or starting to offer the alternative of remote work even after the end of the crisis. Regarding the reduction of their operating costs, only 2/10 plan to renegotiate their rent or reduce their office costs.
Finally, the participants stated that the fields in which they will need assistance in rebooting by order of priority will be: strategy and business plan, understanding the shift in consumer behavior, human resources management, digital transformation, cost reduction, sustainability of the supply chain and the business continuity plan.