How to do small business in the depopulated and non-industrial regions?

Covering all the tax and energy costs for a small business is the equivalent of a person who has never worked out but has to do the splits in the air. In Bulgaria, there are different business pictures according to the region, as there are regions that are quite industrially developed and they predispose to the development of small businesses, because there are large enterprises that can work with small ones. But there are regions where there is no industry, businesses are closed, depopulation is happening – it is suicide to do a small business there, commented Maria Tsacheva, owner of the bakery “Provence” in the village of Chavdar, in the program “Business Start” with host Roselina Petkova.

Before opening a business in small towns, first you are an observer, researching and analyzing what supply is missing, but more effort is required to find a larger volume of customers, since the population and the flow of people are smaller, said Tsacheva. She added that in many aspects, businesses in small towns are more limited, and in a big city you have the opportunity to change the function more quickly, from offering goods to services.

The guest explained that every branch in the last 10 years suffers from a shortage of skilled and unskilled labor, and in small settlements the number of skilled workers is very small. She explained that remuneration is the leading motivator to be used in recruitment, as she herself attracts labour.

“Every single employee you want to hire, the first thing they are interested in is the remuneration. When starting a small business, the level of pay must satisfy the employees, who, if they have the alternative of going to a large enterprise, must have the corresponding motivation ; for them to want to work for you; Accordingly, you should also apply, for example: a company car, cover the fuel, so that you can relieve this person and at the end of the day, when he considers his expenses, he says: Yes, I am better at the small business than the big one; you have to be attractive in some way.”

Tsacheva supports raising the minimum wage, but explained that small and micro businesses are the most sensitive to any kind of changes, including a change in the MOH. As the consequences are borne by the small businesses, not the big ones. The guest’s business must adapt by raising prices and looking for another product to compensate for the outflow of consumers after this price increase.

Regarding challenges facing small businesses related to energy costs, the guest said.

“There was a moment; when there was this dramatic increase in current, then the bills were really too much to pay, which, accordingly, such a small business can directly bankrupt it. At the moment, we manage with energy costs, we have no alternative source of energy; but compared to , which we consume and the income, we have some balance that I don’t know how long we will be able to hold, because this for small businesses – all the expenses that come from taxes and energy – all this to cover and finally be able to you survive it’s like a person who has never trained but has to do splits in the air.”

The guest explained that it is prohibitive for her business to make investments in new technologies due to lack of funds. She added that she had planned to apply for European funds or those at the local level that support small and medium-sized businesses, but complicated administrative procedures delayed and in some cases refused businesses.

Regarding the EU adopted non-financial reporting or ESG reporting of small and large companies as from 2024 it comes into force for large companies and from 2025 for small ones, the guest said that big business can withstand such regulations, but small may go bankrupt. And this type of regulation, the guest believes, should be tailored to the size of the business, the employees employed and the profits.

“In Bulgaria, we have different business pictures according to the region, accordingly there are regions that are quite industrially developed and they predispose small businesses to develop as well, because there are large enterprises that can work with small ones. People are encouraged to be entrepreneurs in these populated areas, because they are meant to serve big business, but there are regions where there is no industry, businesses are closed, depopulation is happening, so it is suicide to do small business there. Most of the time, small business steps on the environment – of what surrounds him, what the terrain offers”.

The guest said that about 70% of start-up companies in our country fail in the first year for various reasons, and the state should implement measures at least within the first year.

See the entire comment in the video of Bloomberg TV Bulgaria