REUTERS
Some 38% of entrepreneurs will need at least a year to get back to pre-quarantined levels.
A third of entrepreneurs in Ukraine engaged in small-sized businesses (33%) have reported 50%-75% losses of revenues amid the nationwide COVID-19 lockdown, according to a survey by the European Business Association (EBA) among participants in the Unlimit Ukraine project uniting micro- and small- entrepreneurs.
Enterprises also report a significant increase in accounts receivable. Another 44% incurred up to 50% revenue losses, while 7% of respondents are considering the option of shutting down their businesses. Only 14% experienced no changes in daily operation, even increasing revenues, according to the relevant press release.
Some 38% of entrepreneurs will need one year to get back to pre-quarantine levels, 25% of respondents say they need two years or more, while 19% need around six months. Only 3% noted that their businesses keep developing unhindered.
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"Such measures of government support as reducing the tax burden on the payroll fund, providing a cheaper loan resource, while lifting penalties for tax violations until year-end may help companies recover," the report said.
It is noted that most companies, namely 48%, managed to keep staff wages unchanged, whereas 29% were forced to reduce wages, while another 19% had to place their employees on unpaid leaves.
Some 59% of enterprises were able to keep their staff unchanged. Another 33% of companies faced staff reductions, but 6% are even now looking for new employees.
In total, businesses are ready to get back to work: 54% of companies will resume their offline activities in May-April. At the same time, 60% of entrepreneurs consider the possibility of a full or partial transition to remote work, which reduces office rental costs in addition to flexibility in operations.
"If we compare similar polls conducted by the Association among representatives of large- and small-sized businesses, we see that the margin of safety of entrepreneurs' small-scale businesses, unfortunately, turned out to be rather limited. The economic consequences of the [COVID-19} pandemic first affected the financial results of companies, which are much worse than those of large-scale businesses are. Also, small-sized businesses have much fewer opportunities to retain employees and pay pre-quarantine salaries," the EBA press service quoted Manager of EBA Unlimit Ukraine Olena Ero as saying.
According to Ero, small-sized businesses are more flexible. If large companies consider only a partial transition to an online mode of work, small- and medium-sized businesses are ready for total digitalization, if their activities allow doing this. Ero says the flexibility and creativity are those competitive advantages of small-sized businesses that they will probably use to overcome the consequences of the crisis.
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As UNIAN reported earlier, according to a survey by the EBA, almost 60% of Ukrainian companies will need up to one year to recover and achieve a pre-quarantine level of revenue.