Pandemic’s Impact on Business Surpass Worst Expectations of 24% Of Russian Entrepreneurs

The effects of the pandemic surpassed the worst expectations of 24% of Russian entrepreneurs, according to a survey by the Otkritie Bank. The survey was conducted among 400 businessmen from March 26 to April 1, 2021, TASS writes.

The poll showed that, for almost 25% of entrepreneurs, the crisis has surpassed the worst expectations they had after the introduction of quarantine. While two-thirds of entrepreneurs realized that they were facing a crisis, 60% believe that by the end of 2021 their business will grow or remain stable.

The position of every third company (34%) has not changed during the year of the pandemic. Almost half of the respondents (51%) reported a decline in their business, but they confidently stated that they would continue to work. Meanwhile, 9% of entrepreneurs reported that their business had even grown over the past year. However, 5% intend to close their business due to a strong decline, while 1% of respondents managed to close their old business and open a new one during the pandemic.

Two-thirds of companies posted financial results below pre-crisis levels. However, 23% of respondents have already restored them to the pre-pandemic level. 12% of those surveyed said that the financial performance of their companies is higher than before the crisis. Thus, evauation of business results for the year that has passed since the beginning of the pandemic shows that one third of companies managed to at least recover their financial performance.

The survey revealed that 73% of entrepreneurs expected the crisis when the pandemic began, and for 23% it came unexpectedly. 52% of those surveyed said that the scale of the crisis was generally in line with their expectations. For 24%, the crisis surpassed their worst expectations. At the same time, every fourth entrepreneur said that the crisis was easier than expected.

According to the survey, 19% of respondents expressed hope that by the end of 2021 their business will show growth, 41% believe that their business will remain stable in 2021. But at the same time, one in three expects a decline in their business this year, while the rest are planning to close the company and stop doing business or open a new one.

“The results of our research show that over the past year a third of companies partially or completely switched to new activities and another third think about it. A quick reaction to external changes is a strength of small businesses, which allows them to quickly adjust to new conditions, even in the most unexpected circumstances,” Elena Kolesnikova, senior vice president, deputy head of the small and medium business unit at the Otkrytie bank, said.