An Anatomy of Bulgarian Business

Aging Bulgarian Business leaders

Young entrepreneurs in Bulgaria represent only 5% of all businessmen in the country, according to recent research.

The study conducted by the market research agency NOEMA, shows that businessmen of 60+ represent 15% of the total.  

33% of SME's are family run businesses. These family businesses are mostly run and managed (70%) by their creators representing 90% of all business in Bulgaria.

The study focused on the macro-economic environment for business in Bulgaria and their current state of competitiveness, the influence of the economic crisis and how/if they are recovering.  It also investigated the amount of innovation carried out by such firms.

There are 325,000 micro businesses in Bulgaria, followed by 23,000 small business, with medium businesses representing 4,444. There are only 774 large firms representing only 2% of the total.

Business is mostly concentrated in Southern Bulgaria with a strong difference compared to the North. Experts from NOEMA cite the poor infrastructure in many Northern regions.

The crisis has hit the manufacturing sector most with a large number being forced to shut down since 2008. 

Unemployment rose most in SME's, which provide 75% of all jobs in the country.

The financial indicators have worsened slightly with revenues and turnovers going down by several percentage points, leading businesses to cut costs and investment in new technology and equipment.

In 2011 SME's relied largely on exports of raw material, machines and equipment to the rest of the EU.

Experts raise concern at the aging population of leading Bulgarian entrepreneurs, with most over 46.  Banks are seen as loathe to lend making access to credit a key issue for SME's in Bulgaria.  This in turn affects competitivity, with reduced investment in innovations highlighting a need for alternative sources of financing.  In 2011, according to the study, 62% of SME's used funds from their owners or friends and relatives to plug the gap left by the banks.

Another problem for SME's is the protection of intellectual property.  Only 7% having registered patents; 13% a registered brand and less than 20% with enough funds to invest in the aforementioned.

Article courtesy www.novinite.com 

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