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Contact person: Natalia Partach
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E-mail: Natalia.Partach@ua.ey.com
European entrepreneurs see the recession as an opportunity for growth
LONDON, KYIV, 27 February 2009 – A survey of nearly 200 leading entrepreneurs across Europe has revealed that despite the recession they remain relatively optimistic about business opportunities.
The study carried out this week by Ernst & Young has some distinct contrasts with the major European corporates surveyed as part of the research, Opportunities in Adversity, released by the leading professional services firm last Monday.
Julie Teigland, EMEIA Head of Strategic Growth Markets at Ernst & Young explains, “Entrepreneurs see growth and future opportunities as more important than battening down the hatches and protecting their existing business. In the course of the study, several entrepreneurs have commented that “the minute your business is not focused on growth, you are already losing the battle and winding down”. These entrepreneurs know exactly what they are taking about.
Many of the former Entrepreneur of the Year finalists that we talked to this week have had numerous businesses - some that have failed, some times even more than once. In each case they have picked themselves up and started all over again.”
More optimistic
Over 80% of the entrepreneurs believed that there are opportunities to be exploited in the next 12 months. Only 16% are focused on survival compared to over 30% of the European corporates we asked the same question.
When asked about their areas of focus in the next 12 months, 48% are planning to expand into new geographical markets (compared to just 20% of their corporate cousins) and 47% plan to diversify their business or develop new product lines (compared to just 19% of corporates). Two thirds have increased their focus on new market opportunities.
As Julie comments, “Whilst focusing on their current performance is still important to Entrepreneurs, it is embedded in their business DNA to constantly look for new opportunities and new markets. This might mean a new sector, a fresh idea or a different geography. Or all three.”
Cash not an issue for some but talking to stakeholders becoming more important
A significant number of entrepreneurs compared to their bigger European corporate brothers said that availability of cash was not an issue for them (36% compared to 26%). However a substantive proportion (41%) said that they were obtaining access to short term finance facilities. In addition many are taking steps to maintain liquidity. 38% of entrepreneurs compared to 29% of European corporates are actively communicating with lenders, analysts and rating agencies.
Julie adds, “Those entrepreneurs which can capitalize upon the momentum of these turbulent times, using it to make the required business improvements, with the respective focus on efficiency and performance, will emerge stronger than ever. The statistics show that entrepreneurial businesses are likelier to do just that.”
Not immune to the credit crunch but still investing in their business
The areas where entrepreneurs were planning reduced investment closely follows those of the major corporates, but twice as many entrepreneurs (37% compared to 15%) indicated there had been no decline in investment in their company, and indeed, over half indicated areas where they planned to increase investment including: marketing; staff training, IT infrastructure, doing more business on line; recruiting sales and prospecting staff, research and development, geographic expansion, innovation and product development as well as additional offices and new facilities.
Julie concludes, “Investment will be key to moving our economies – in almost all areas of the world. It will also be key to ensuring that businesses stay ahead of their competitors and the market. This may explain why several of the strongest businesses today were grown in turbulent times: entrepreneurs know best how to capitalize on opportunities.”
ends
Entrepreneurs and the credit crunch
Ernst & Young surveyed nearly 200 Entrepreneur Of The Year 2008 finalists from UK, France, Russia, Ukraine and other countries across Europe in February 2009.
The Economist Intelligence Unit on behalf of Ernst & Young surveyed in January 2009, 337 board members of international corporates, over half of which had turnover of $10billion plus, on how the downturn had impacted on their strategic objectives and the way they do business. Details of the survey can be found at www.opportunities-in-adversity.com
About Ernst & Young’s Entrepreneur Of The Year
Ernst & Young’s Entrepreneur Of The Year is the world’s most prestigious business award for entrepreneurs. The award makes a difference through the unique way it encourages entrepreneurial activity among those with potential and recognises the contribution of people who inspire others with their vision, leadership and achievement.
As the first and only truly global award of its kind, Ernst & Young Entrepreneur Of The Year celebrates those who are building and leading successful, growing and dynamic businesses, recognising them through regional, national and global awards programmes in more than 135 cities in 50 countries.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve potential.
In Ukraine Ernst & Young established its practice in 1991. Ernst & Young Ukraine now employs more than 570 professionals providing a full range of services to a number of multinational corporations and Ukrainian enterprises. For more information, please visit ey.com/ukraine.
