Sberbank finds out where main long-living small and medium-sized business work in Russia

Jun 18, 2019
  • 64% of SMEs that actively worked in January 2016 still work now.
  • Every month 56,000 new active businesses appear in Russia, and 28,000 shut down.
  • The possibility that an enterprise will continue to operate is especially high after the first year of its existence.
  • SMEs that are in the Far East function longer than others.
  • The main long-living SMEs are in the healthcare and mining industries.
  • The most active businessperson in Russia has registered 167 active SMEs.

18 June 2019, Moscow — Sberbank has analysed how long small and medium-sized businesses in Russia function. According to analysts of the SberData project (Sberbank’s initiative on processing and analysing big data) more than 70% of companies in the country live for three full years and more. In the world, on average about half of small enterprises function for five years, and one third — from five to ten years . However, Russia has an enormous disproportion of indicators, depending on the region of registration and area of activity.

The main long-living small and medium-sized businesses that are able to function for more than three years are situated in Moscow and Saint Petersburg, as well as in Kamchatka and Chukotka. At the same time, the expected periods of business existence is the maximum in the Far East (about 37 months out of 40 months). The analysts believe that in this case, the European part of the country is backward due to the fact that many entrepreneurs reregister their businesses to avoid planned checks. Due to the special characteristics of legislation, new companies face fewer checks.

The most stable were the companies that function in healthcare (94 out of 100 companies continue to function on the market for more than three years). The highest in the rating are the areas that demand significant capital investments: the metallurgy, mining and energy industries.

Businesses in the ground transport area were less stable over a period of 36 months. In the first six months 8.7% of companies close, and only 58.4% of companies function for at least three years — 12 pp lower than the average indicator in all areas.

11.5% of companies that are registered in the construction area close in the first six months. A similar situation is noted in the non-banking financial segment, advertising, and certain areas of retail.

However, after closing a legal entity, Russians continue to do business. Almost 20% of citizens who once opened their own business have registered more than one legal entity. 16% of active entrepreneurs are shareholders in more than one enterprise, and 1% have five or more companies. According to SberData, the record in terms of one person’s participation is 167 legal entities; all of them still function now.