of Tiziana Marongiu | Chief Business Development Officer, Credimi
The recovery risks being severely undermined. If in 2021 Italian GDP increased by 6.6% (in any case insufficient to make up for the 9% drop in 2020), the forecast for 2022, already revised by Bankitalia to 4% from 4.4% in July, could be greatly reduced(S&P Global Ratings a few days ago revised its forecast to 3.3%; ISTAT published an initial assessment of the effects of the energy price shock on GDP in 2022, which would see a reduction of 0.7%). Although business confidence rose in February after the sharp fall in January, the new international environment makes Italy's economic outlook uncertain. And it is above all the effects on global supply chains that make us fear a new setback.
Once again, it is the micro-enterprises, the beating heart of our economy, that are paying the price. Those more than 4.5 million businesses with a turnover of less than EUR 10 million, which have little bargaining power with suppliers, difficulties in passing on cost increases to customers and, in general, structures that are too fragile to withstand the blows that continue to hit them months after the start of this crisis. Not least because headwinds continue to blow in the second half of the year: difficulties in the supply of metals and semiconductors and the outbreak of war in Ukraine, which makes the situation even more complex in terms of energy costs, and not only that. From that part of the near East we import the gas on which energy-intensive businesses depend, but also cereals (30% from Russia). Last but not least, inflation forecasts at 3.8% for 2022 and the conclusion of the temporary support framework in June, in a situation where employment is still not full and the economy is struggling. While many micro-enterprises have so far reacted to the crisis, thanks in part to the rapid disbursement of government-guaranteed loans by fintech (we at Credimi alone have received 48,000 applications), the situation now requires these enterprises to start using other tools to react.
In short, there are elements of serious risk, but above all there is still a great deal of uncertainty, which is the paralysing element of any business activity, blocking industrial plans and above all investments that need visibility to be undertaken. And once again we are faced with what risks being a great opportunity wasted: the NRP, beyond the government proclamations that 'all the 2021 objectives have been met' is still a plan made up of declarations of intent and great aspirations, but in practice SMEs need to know how and when they can take advantage of any concessions.
While waiting for clarity, however, there are a few steps - with the potential to bring huge results - that every small business owner can take independently and proactively to increase their resilience. Let's take a look at the top four moves within the reach of SMEs.
Innovate
That means not only and not so much making new products, but adopting an efficient organisational and operational model, taking skills from outside, for example, that can fill the inevitable gaps in any small organisation. Or, rethink the production process, automating parts of it or changing procurement policies. Diversifying suppliers to cope with blockages and shrinking supply chains and avoid production delays is vital.
Among the ways to innovate is to turn to digital services to integrate them into the customer offering: services such as ScalaPay or Klarna can be allies in expanding the customer base of B2C companies.
Internationalising
It almost sounds like a leitmotif, but how do you go about conquering the world if you have fewer than 10 employees and a small turnover? The truth is that the world is much more accessible, even for an SME, thanks to digitalisation. It's more an issue of cultural resistance: small companies often don't have a clear idea of what e-commerce is, which is the real gateway to diversifying the customer base. Opening an e-commerce business requires time and investment (for product sampling, marketing campaigns, organising logistics or even just studying a strategy with Amazon), but it is highly profitable in the medium term. Not to mention the various facilities available, from digital vouchers to Simest subsidised financing from the resources of the PNRR, which has been boosted.
Growing up
Yes, this is also a catchphrase. But even in this case, the dimension of growth can be very concrete: M&A for SMEs is perceived in a scarcely positive way if not in phases of generational change. But in order to grow, one can think of small operations to open capital, minibonds - which can also be issued on crowdfunding platforms - and listing on Euronext Global (the former Aim), which provides a simplified procedure and a tax credit on listing costs. These are important steps, not only to raise capital for development, but also and above all because in order to do so, each company must open up to third parties and adopt an approach of absolute transparency, which also means being able to read its own accounts.
Planning
This is a good thing, because it allows the company to present itself to potential investors in the best possible light, but also to build an armour against any new shocks (which could occur again, as we have seen). It is not enough to stop at the first line of the balance sheet, that of turnover, but you have to look at KPIs such as working capital, the balance between payment times to suppliers and collection times, between financial resources, in terms of costs and type. Because in an upsurge of a crisis that contains geopolitical and macroeconomic elements, finding financial resources and doing it at the last moment can become a gamble (provided you can manage it).
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