Main cause of small company difficult situation: drop of business figure by over 20%
The main reason that led to a precarious situation of small and medium companies was in 2010 the drop by 20% of the business figure in over 70% of cases.Other reasons were their own high debts or debts not received from others in time, the regional coordinator for corporate fields at Libra Bank, Madalina Nadrag said at the seminar “Regional Focus on Small Companies, Solutions for profit” organized by International Business Promotion.
In Romania, a company out of three has cash problems, compared to Germany where no more than 10% of companies have such problems. The first reaction of small companies to that situation was to reduce operational costs by 10-30% then to reduce personnel expenses.Besides cutting expenses, the situation of small companies can be improved by continuing the existing business, opening new businesses or making investments. Correlating these methods with manager skills made Libra Bank come forward to help small companies, Madalina Nadrag said.