Over a Half of SMB Companies Invest into Their Business This Year

The number of businessmen, who believe their business conditions to improve next year increased by three times



In April 2019 MAGRAM Market Research completed Wave XIX of OPORA RSBI — a quarterly research of SMB attitudes, organized jointly by Promsvyazbank and OPORA RUSSIA..

The survey covered owners and top managers of 2,300 small and medium companies fr om 23 Russian regions..

In addition to the standard questions of each wave in QI 2019 businessmen were asked about investments into their own business: if they plan any investments, what motivates them and what money they are ready to invest..

According to the research, in spite of some growth in the number of businessmen, who believe, that their business conditions worsened in the previous quarter (43% vs. 39% in QIV 2018), the overall optimism level increased. Thus the number of those, who believe their business conditions to improve next year increased by three times (fr om 11% to 27%).

This conclusion is also proved by the fact, that more than a half of businessmen (51%) have already invested or plan to invest into their business development this year.

It is also interesting to have a look at the split by business size. Medium business specifically demonstrates their high business activity. Nearly 75% of the surveyed «medium» companies are somehow investing or planning to invest. And 47% have already started doing that. At the same time the situation in micro business is less optimistic: only 20% have started investing. The total of investments (incl. investment plans and those, who have already invested this year) in micro business makes 48% vs. 49%, i.e. the companies that do not plan any investments.

The businessmen are in the first place planning to invest into the tools that impact sales directly: equipment and transport purchase and/or renovations (50%), search for new partners (36%), advertising and marketing (28%).

The factors of lagged effect (e.g. automation or employee training) are a bit less «popular».

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As for investment sources, the majority of companies are planning to invest some part of their income into business (51%), business owners’ personal money (35%), money from current assets (27%) or bank loans taken on behalf of the company (26%). 8% plan to use private investments and the same % plan to take personal loans. Only 5% of the participants intend to use government subsidies and grants.

The key drivers to invest are as follows: they want to save their business, keep their status in the market (57%) and strengthen their positions (45%).

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Those data correlate with the previous quarter results, i.e., the key strategies of small business are economy and stability (34% of all respondents).