Start-ups predict rather low turnover for the year

The results of the SEB Baltic Business Outlook survey revealed that two-thirds of Estonian enterprises in business for less than three years predict their annual turnover for 2017 to be up to EUR 50,000.

According to the survey, 67 per cent of start-ups estimate their annual turnover for this year to be up to EUR 50,000. Younger enterprises, which have been in business for up a year, include more of those whose forecasted turnover for 2017 is lower, i.e. up to EUR 10,000. Turnover of at least EUR 100,000 is expected the most by start-ups operating in the trade and processing industry - 59 per cent and 54 per cent, respectively.

“We should not allow ourselves to be misled by turnovers that seem small in the Estonian business landscape - as these are enterprises that have already overcome their first difficulties and are thinking about further development - if we take a look at their higher than average recruitment plans,” Ainar Leppänen, Member of the Management Board and Head of Retail Banking and Technology at SEB Pank said.

Leppänen added that the newly opened e-learning programme e-Academy at http://eakadeemia.seb.ee contributes to the quicker growth of start-ups and small enterprises. This is the biggest Baltic project by SEB, targeted at young companies.

One-third of young enterprises are hiring more employees

Fifty-nine per cent of starting enterprises do not foresee any change in the number of employees in 2017. Thirty-nine per cent of respondents estimate an increase in the number of employees and two per cent a decrease. When comparing small and medium-sized enterprises that have been operating for more than three years, 80 per cent of them do not plan any changes in the number of staff, while their recruitment plans are also more modest compared to starting companies. Among starting enterprises, 59 per cent of construction industry companies plan to increase their number of employees, followed by the processing industry with 50 per cent.

The survey also revealed that Estonian starting enterprises are not planning on hiring employees from foreign countries, as only 10 per cent of respondents intend to do so. Companies are mainly looking to add foreign specialists (56 per cent), unskilled workers (30 per cent) and managers (27 per cent) to their work collectives.

Thirty-four per cent of young companies consider exporting

Two-thirds (66 per cent) of start-ups plan to focus on the domestic market this year, whereas companies focussing on foreign markets (eight per cent) have higher expectations regarding turnover. The most popular export markets were Finland, Latvia, Lithuania, USA, Croatia, Germany, Denmark, Great Britain, and Russia.

More than one-half of start-ups, that is 56 per cent, plan innovation of products or services, 30 per cent intend to invest in the development of employees and 23 per cent do not plan any innovations for this year. Enterprises from the information and communication sector plan to invest more in the business model innovation compared to other industries.

For the fifth consecutive year, the SEB Grupp conducted a survey in the Baltic countries, mapping the expectations of small and medium-sized enterprises (SMEs) for the 2017 financial year. Start-ups that have been in business for less than three years were mapped for the first time this year. A total of 1099 start-ups participated in the Baltic Business Outlook survey in Estonia, with 53% operating in Harju County. Most popular sector throughout Estonia was the trading sector.

Read the survey here: http://www.seb.ee/sites/default/files/web/files/uudised/BBO_2017.pdf

For more information:

Evelin Allas
Communications Manager
Marketing and Communications Division
SEB

Phone +372 665 5649
Mobile +372 511 1718
Address Tornimäe 2, 15010 Tallinn
E-mail evelin.allas@seb.ee
www.seb.ee

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