
Researches
The EBA is all about identifying trends and the nearing changes. Therefore, we conduct a range of surveys that explore the current condition of the business environment in Ukraine and look at it from different angles. We get regular feedback from business within 10 surveys: Investment Attractiveness Index, Customs Index, Tax Index, Court Index, Infrastructure Index, Business at War, Small Business Index, Doing business in regions, Happiness Barometer, Business Forecast. Based on the research results, we can have a bigger well-founded picture of success and failures in the business environment in Ukraine, which we share happily with government authorities, companies, media, and the public. So, let’s learn about the results and study the dynamics.
Investment Index
The research that reflects business sentiment regarding the current state of the country's investment climate and forecasts for the next 6 months.
How we calculate the Index
The investment attractiveness index is calculated as an arithmetic mean of five aspects of the investment climate. Respondents answered questions by selecting one of the suggested answers that could be analyzed using a five-point system.
To download survey results, please click on the metric you are interested in.
- Positively
- Neutral
- Negatively
- 2008, III кв.
- 2008, IV кв.
- 2009, I кв.
- 2009, II кв.
- 2009, III кв.
- 2009, IV кв.
- 2010, I кв.
- 2010, II кв.
- 2010, III кв.
- 2010, IV кв.
- 2011, I кв.
- 2011, II кв.
- 2011, III кв.
- 2011, IV кв.
- 2012, I кв.
- 2012, II кв.
- 2012, III кв.
- 2012, IV кв.
- 2013, I кв.
- 2013, II кв.
- 2013, III кв.
- 2013, IV кв.
- 2014, I кв.
- 2014, II кв.
- 2014, III кв.
- 2014, IV кв.
- 2015, I кв.
- 2015, II кв.
- 2015, III кв.
- 2015, IV кв.
- 2016, I пол.
- 2016, II пол.
- 2017, I пол.
- 2017, II пол.
- 2018, I пол.
- 2018, II пол.
- 2019, I пол.
- 2019, II пол.
- 2020, I пол.
- 2020, II пол.
- 2021, I пол.
- 2021, II пол.
- 2022, I пол.
- 2022, II пол.
- 2023
- 2024
- 2008, III кв.
- 2008, IV кв.
- 2009, I кв.
- 2009, II кв.
- 2009, III кв.
- 2009, IV кв.
- 2010, I кв.
- 2010, II кв.
- 2010, III кв.
- 2010, IV кв.
- 2011, I кв.
- 2011, II кв.
- 2011, III кв.
- 2011, IV кв.
- 2012, I кв.
- 2012, II кв.
- 2012, III кв.
- 2012, IV кв.
- 2013, I кв.
- 2013, II кв.
- 2013, III кв.
- 2013, IV кв.
- 2014, I кв.
- 2014, II кв.
- 2014, III кв.
- 2014, IV кв.
- 2015, I кв.
- 2015, II кв.
- 2015, III кв.
- 2015, IV кв.
- 2016, I пол.
- 2016, II пол.
- 2017, I пол.
- 2017, II пол.
- 2018, I пол.
- 2018, II пол.
- 2019, I пол.
- 2019, II пол.
- 2020, I пол.
- 2020, II пол.
- 2021, I пол.
- 2021, II пол.
- 2022, I пол.
- 2022, II пол.
- 2023
- 2024
Areas of Research
Spheres
- 2024
- 2023
- 2022
- 2021
- 2020, IІ пол.
- 2020, I пол.
- 2019, II пол.
- 2019, I пол.
- 2018, II пол.
- 2018, I пол.
- 2017, II пол.
- 2017, I пол.
- 2016, II пол.
- 2015, II пол.
- 2014, II пол.
- 2013, II пол.
- 2013, I пол.
- 2012, II пол.
- 2012, I пол.
- 2011, II пол.
- 2011, I пол.
- 2010, II пол.
- 2010, I пол.
Business Forecasts
Research where business shares projections about $, employee salaries, staff size, investment projects per year, TOP-3 tasks from business to government, and more.
- For 2025
- For 2024
- For 2023
- For 2022
- For 2021
- For 2020
The average dollar exchange rate that executives of member companies of the European Business Association are incorporating into their budgets for the upcoming 2025 year is 44 UAH per dollar. For comparison, in 2024, businesses projected a rate of 41 UAH/$, and in 2023 – 43 UAH/$.
These are the results of the EBA’s “Business Forecast for 2025” survey.
A little over half of the companies, specifically 53%, predict positive growth for their businesses in 2025. Last year, 58% of executives hoped for business growth. One-third of respondents, 33%, expect to maintain business performance at the same level as the previous year, and 14% forecast negative dynamics (compared to 13% last year).
The financial forecast for 2025 in UAH are almost identical to those of the previous period. The majority of executives, 72%, expect revenue growth in UAH, while only 15% anticipate a decline. A 35% growth rate is projected by 35% of directors, 11-20% growth by 23%, and more than 21% by 14% of respondents.
Meanwhile, 46% expect revenue growth in physical terms, and 43% in USD. A revenue decline in physical terms is forecasted by 21%, and 27% anticipate a decrease in USD.
Compared to previous years, companies’ investment intentions have become more restrained. The number of companies planning new large-scale investment projects in 2025 has dropped to 16%. By comparison, 26% of companies planned large projects in 2024 and 19% in 2023. However, the average cost of planned projects has increased, averaging $9 million in 2025 ($8 million in 2024 and $3 million in 2023).
The number of companies planning to invest in social initiatives has slightly decreased, from 65% in 2024 to 59% in 2025. On average, businesses plan to allocate 6% of their revenue to such projects. In 2024 and 2023, these figures were 6% and 8%, respectively.
As usual, the top three priorities for the government, according to businesses, are combating corruption, the need for judicial reform and the establishment of the rule of law, ensuring macroeconomic stability, as well as implementing tax and customs reforms.
Reference:
The “Business Forecast for 2025” survey involved 92 executives from member companies of the European Business Association. The survey was conducted from August 6 to 29, 2024. The “Business Forecast” survey has been conducted by the EBA for nine consecutive years.
More than half of the surveyed companies, namely 58%, predict positive dynamics of their business development in 2024. These are the findings of the EBA Business Forecasts for 2024survey. Last year, the number was 47%. This year’s results demonstrate a positive trend of cautious improvement in the mood and forecasts of CEOs managers of EBA member companies.
At the same time, 29% of directors expect to keep business indicators at the level of the previous year in 2024, and 13% predict negative dynamics (last year the number was 25%).
Companies are improving their financial indicators forecasts. Most managers expect revenue growth in 2024: 72% expect an increase in hryvnia, and 55% – in physical terms. Last year, the figures were 58% and 43%, respectively. In particular, 35% of the surveyed entrepreneurs expect an increase in revenues in hryvnia of up to 10%, and 25% – by 11-20%. A drop in revenues in hryvnia is predicted by 16%, and 17% in real terms.
In their budgets for 2024, company executives set the value of the currency at an average of 41 UAH/$. For comparison, in 2023, businesses budgeted 43 UAH/$, and in 2021-22 – 29 UAH/$.
Next year, 2 out of 5 CEOs plan to hire new people. Last year, this figure was half as much. At the same time, about half of the companies, namely 48%, will leave the team unchanged, and 12% plan to reduce staff.
The overwhelming majority of surveyed companies, namely 87%, will increase the salaries of their employees. Of these, 46% plan to increase salaries by up to 10%, and 41% plan to increase salaries by 10% to 20%. Only 1% of companies will reduce salaries, and 12% plan to leave them unchanged. Last year, 73% of company executives resorted to raising salaries.
Compared to last year, the number of companies planning to implement new investment projects has increased from 19% to 26%. The average cost of planned projects has also increased and amounts to about $8 million (an average of $3 million in 2023).
The number of companies planning to invest in social initiatives has also slightly increased – from 60% to 65%. On average, businesses are ready to allocate about 6% of their revenues to social projects. In 2023 and 2022, these figures were 8% and 3%, respectively.)
The business traditionally lists the fight against corruption, the need for judicial reform, the establishment of the rule of law, and ensuring macroeconomic stability as the top three priorities for the Government.
For reference:
91 CEOs of member companies of the European Business Association participated in the study “Business Forecast 2024”. The survey was conducted from August 26 to September 4, 2023. The Business Forecasts survey has been conducted by the EBA for 8 years in a row.
Nearly half of the member companies of the European Business Association are positive about their business development in 2023. These are the conclusions of the study "Business Forecast 2023" which was conducted by the EBA and Raiffeisen Bank with analytical support from Gradus Research. This year’s results demonstrate an expected deterioration in the sentiments and forecasts of top managers. For comparison, last year 83% of CEOs made positive forecasts.
28% of directors expect to maintain business indicators at the current level in 2023, and 25% expect a deterioration in the state of business (last year there were only 2%).
Most companies expect a positive financial result next year. Thus, 58% of respondents expect income growth in hryvnia, and 43% – in real terms. At the same time, 31% expect an increase in hryvnia income up to 10%. Also, 31% of directors predict a fall in hryvnia revenues and 36% – in real terms.
When planning budgets for 2023, company managers set the value of the currency at an average of UAH 43/$. We will remind you that for the past two years, forecasts for the hryvnia exchange rate remained constant at the level of UAH 29/$.
Only 1 in 5 CEOs plans to hire new employees next year. The majority, namely 53%, say they will keep the team unchanged, and the other 28% will resort to downsizing. At the same time, last year more than half of the companies planned to hire more staff.
Only 1% of companies plan to cut wages in 2023, another 26% will keep them at the current level. At the same time, 73% planned to raise wages for employees, of which 40% will raise wages at the level of 10% to 20%. For comparison, all respondents of last year’s survey planned to increase the salaries of their employees.
Compared to last year, the number of CEOs planning to implement new investment projects decreased by a third – only 19% of companies reported this. The average cost of the planned projects is about 3 million dollars. On the other hand, the number of companies planning to invest in social initiatives has increased, so these are 60% currently. On average, businesses are ready to allocate about 8% of their income to social projects. That is significantly more than the previous figure of up to 3% of the company’s income.
The CEOs also identified the TOP-3 tasks for the next year to be considered by the Government. The first two tasks have remained unchanged for several years in a row. The first is the need to carry out judicial reform and establish the rule of law, the second place is the fight against corruption. Macroeconomic stability is named by the business leaders as the third priority for the next year as it is security is the basis of the future recovery and reconstruction of Ukraine.
Partners
For reference:
104 CEOs of member companies of the European Business Association participated in the study “Business Forecast 2023”. They had to answer 10 questions of the survey during August-September 2022. The Business Forecast study has been conducted by the Association for the 7th year in a row. The study partner in 2022 is Raiffeisen Bank, the analytical partner is Gradus Research.
The results of the Business Forecast 2022, conducted by the European Business Association together with Nestlé Ukraine, show a steady increase in optimistic sentiments and forecasts of the top managers. For comparison, last year just 60% of the respondents predicted positive business results.
In 2022, the vast majority, namely 83% of the respondents, forecast growth of their business, 15% of the directors assume it will be possible to sustain their business performance at the level of 2021, and only 2% expect some deterioration in their business situation (14% last year).
The companies have significantly improved the financial forecasts for next year. Most entrepreneurs, namely 67%, forecast income growth by 10-20% – in hryvnia. This figure returned to the level of 2020 after a significant decline in the past. Thus, 36% of directors expect revenue growth of up to 10% in volume terms, and almost half (49%) expect a 10-20% growth.
The dollar exchange rate for next year is forecasted to be the same as last year. When planning budgets for 2022, company executives consider the currency rate at an average of 29 UAH/$.
All respondents to this year’s survey note their plans to increase the salaries of their employees in 2022. Most managers, namely 55%, plan to increase salaries by 5-10%. Other 30% will increase salaries by 10-20%. It should be mentioned that last year 15% of the companies were not able to increase staff salaries.
The companies are enthusiastic about the plans to create new jobs. Thus, last year 60% of companies did not plan any changes in their staff, while this year their number is only 36%. The majority, namely 58% of the top managers, plan to expand their staff. And only 6% of the companies will be forced to reduce staff.
One-third of the entrepreneurs, namely 32%, plan to implement new investment projects next year with a budget from 20 thousand to 400 million US dollars. Moreover, we are pleased to note that almost half of the respondents (49%) plan to invest in social initiatives aimed at supporting Ukrainian society next year. In some cases, the amount of investment will reach 3% of the company’s income.
The CEOs also identified the TOP-3 tasks from business to the government for next year. It’s been the second year in a row that the first need mentioned is the need for judicial reform and the rule of law, the second is the fight against corruption, and the third is the need to ensure political stability and effective management in the country. Also, this year, the directors highlighted the importance of further reforming the tax and customs sectors.
For reference:
Altogether, 95 CEOs of the EBA member companies took part in the “Business forecast 2022” study. The survey consisted of 10 questions and was conducted in September 2021. The Business Forecast has been conducted by the Association for the 6th year in a row. This year, the study was held with Nestlé Ukraine – our research partner.
Just 60% of CEOs expect positive growth dynamics for their business in 2021 according to the results of the survey “Business Forecasts 2021” conducted annually by the European Business Association among the CEOs of EBA member companies and were presented on the meeting Global Outlook: Future Driven. It is worth noting that 77% of CEOs expected their business to grow according to the previous wave of the survey for 2020.
Meanwhile, 26% of CEOs expect to maintain business performance at the level of 2020, and another 14% say that their business situation will deteriorate. In addition, only a third of entrepreneurs, namely 31% plan to implement large-scale investment projects next year. business development
About a third of entrepreneurs expect an increase in income up to 10% in UAH due to business development projects. Whereas last year the majority (62%) forecast growth at 10-20%. When planning budgets for 2021, company executives set the value of the currency at an average of 29 UAH / $.
At the same time, more than half of the CEOs, namely 54%, plan to increase the salaries of employees by 5-10%. Another 21% will increase wages up to 5%, and 9% – up to 10-20%. Only 15% of companies will not increase staff salaries and no company plans to reduce it.
At the same time, most companies will rely on a restrained HR policy next year. Thus, a 60% plan to keep the company’s staff unchanged. Only 28% of companies plan to expand their staff (last year there were 46%). 12% of businesses will have to resort to staff reductions.
Besides, company executives have identified the top 3 tasks from business to government for next year. They have remained unchanged for a long time, but this year the directors put the need for judicial reform and the rule of law in the first place, the combat against corruption in the second place, and then political stability and effective governance in the country.
For the reference:
Altogether, 121 CEOs of the EBA member companies took part in the “Business forecasts 2021” study. The survey consisted of 10 questions and was conducted in September 2020. The Business Forecasts survey has been conducted by the Association for the 5th year in a row.
The EBA survey shows that 77% of member companies’ CEOs expect business development during the next year. More than half of businessmen (62%) expect 10 to 20% revenue growth, in UAH terms. Almost half (45%) of CEOs forecast revenue growth rates also at 10-20%.Such results were shown by the survey “Business Forecasts 2020” and announced during the special event of the European Business Association “Global Outlook” on 23th of September 2019.
When budgeting for next year, the CEOs considered a currency rate of UAH 28 / 1$. For this year, their respective forecast was UAH 30/1$.
A large majority (90%) of managers expect to increase employee salaries in the amount of 5-20%.
At the same time, the number of CEOs wishing to expand staff levels decreased. Nearly half (47%) plan to leave the number of employees unchanged. Only 46% plan to recruit new people due to staff expansion (last year, 58% of CEOs did so).
The study also showed that large-scale investment business projects are not planned, and 67% of CEOs confirmed this.
In addition, the survey defined the top-3 tasks from business for the next year. For a long time, they remain the same – a fight against corruption, judicial reform and establishment of the rule of law, political stability, and good governance.
It is worth noting that the survey conducted in early 2019 demonstrates the same tasks for the country’s leadership, along with the introduction of land reform and a fight against the shadow economy. We hope that businesses’ voice will be heard so that the country can develop.
Additional information: 104 CEOs of EBA member companies took part in the survey “Business Forecast 2020”. The questionnaire consisted of 10 questions.
White Papers
Strategic documents that include a set of decisions and necessary changes in the relevant areas.
SME Mood Index
The European Business Association, as part of the Unlimit Ukraine project, together with OLX Ukraine and Raiffeisen Bank, has presented the results of the 2024 Small Business Sentiment Index survey. The overall index score has declined to 2.3 out of 5 (compared to 2.5 in 2023), indicating a negative trend in entrepreneurs’ sentiment.
At the same time, small businesses assess the current situation slightly better than during the peak of the COVID-19 pandemic, when the index reached a historic low of 2.2 in 2020.
In 2024, all components of the index showed a decline, including the assessment of SMEs’ current status, changes over the past six months, expectations for the next six months, and the evaluation of the economic situation. The lowest indicator was the assessment of the economic situation (1.9), while the highest was the forecast for the next six months (2.6).
Currently, 21% of entrepreneurs believe their business is doing well (compared to 19% in 2023), while 27.5% assess their situation as neutral. However, the share of those who consider their business condition poor has increased from 39% last year to 51.5%.
Over the past six months, business sentiment has followed a negative trend: 62% of entrepreneurs reported worsening conditions, 26% saw no changes, and only 12% noted improvements.
Expectations for the next six months have also become more cautious. Only 22% of entrepreneurs anticipate improvements (down from 37%), while 47% believe the situation will deteriorate (up from 35%). The proportion of those expecting no changes has risen to 31%.
Moreover, entrepreneurs mostly have a negative outlook on Ukraine’s economic situation: 54% consider it unfavourable, 41% see it as catastrophic, and only 5% view it as favourable.
SMEs’ expansion plans have somewhat slowed down. The share of entrepreneurs planning to expand has dropped from 79% to 67%. However, growth ambitions remain: 25% plan to launch new production lines, 13% aim to expand their geographic reach, and 14% intend to enter foreign markets. Additionally, 17% of businesses already export goods or services abroad, up from 14% in 2023.
Of course, the war has significantly impacted business plans. There has also been a sharp decline in the number of entrepreneurs planning to attract funding – from 80% to 62%. The main sources of financing are:
- Own funds – 47%
- Grant programmes – 21%
- Loans – 16%
- Investments – 10%
At the same time, among those seeking funding, the number of entrepreneurs relying on their own funds and loans has increased. As a result, the share of those who consider bank loans inaccessible has slightly decreased from 42% last year to 34%. Meanwhile, 22% of entrepreneurs noted an increase in lending opportunities (compared to 19%).
Businesses are actively using digital channels for sales, with 67% of surveyed entrepreneurs confirming this. These include social media and company websites. The share of those operating exclusively online has risen from 15% to 24%.
The main challenges for small businesses remain the war, low consumer purchasing power, rising prices, economic instability, attacks on the energy system, and fiscal pressure.
SMALL BUSINESS SENTIMENT INDEX has been conducted by the European Business Association since 2017 as part of the Unlimit Ukraine project. The survey monitors small business assessments and sentiment, identifying growth drivers that will stimulate development. The project partners in 2024 are OLX Ukraine and Raiffeisen Bank. The study was conducted from 1 to 31 December 2024, with 1,716 sole proprietors participating.
Unlimit Ukraine is a platform for the development of small and micro-businesses, created by the European Business Association. The project provides comprehensive support through educational events, consultations, participation in international cooperation programmes, business diagnostics, and discussions on relevant business issues. Small and micro-businesses with sole proprietorship status can join the project regardless of their field of activity. Currently, Unlimit Ukraine includes 9,000 SME representatives.
In 2024, almost 80% of SMEs plan to expand their business and raise funds for development - this is evidenced by the results of the 2023 Small Business Sentiment Index survey conducted by the European Business Association as part of the Unlimit Ukraine project with the support of OLX Ukraine and PrivatBank, as well as information support from the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and Diia Business.
The 2023 wave of the survey shows a slight improvement in SME sentiment, with the integral score of the Index rising to 2.5 points out of 5. This score remains negative but is higher than the 2.4 points in 2022 and 2.2 points in 2020. Among the components of the Index, assessments of the current business state and changes in the next six months showed a point increase.
Among the entrepreneurs we surveyed, 41% assess the state of affairs in their business as satisfactory. At the same time, the number of those dissatisfied with the state of affairs has decreased compared to last year – from 58% in 2022 to the current 40%. However, the share of those satisfied with the state of affairs has also decreased to 19% (24% in 2022). Thus, the overall assessment of the current state of affairs in 2023 is more likely to be neutral.
Over the year, the number of entrepreneurs planning to expand their business increased from 76% to 79%. Of these, 30% plan to open new business lines, and 14% plan to expand their geography and enter other markets. Only 14% of the companies currently export their goods or services abroad. At the same time, 21% plan to expand their team, and 28% plan to increase employee salaries.
The number of entrepreneurs who plan to raise funds to develop their businesses in 2024 has increased to 80%. For comparison, 67% had such plans last year. As before, businesses rely mostly on their resources – personal funds (40%) and, to a lesser extent, on grants (20%), loans (12%), and investments (9%). Intentions to borrow and invest have slightly increased.
Even though intentions to attract credit remain modest, there is a positive trend in assessing credit availability. Among the entrepreneurs we surveyed, the share of those who consider bank lending to be unaffordable has decreased from 59% in 2022 to the current 42%. Accordingly, the share of those who consider it affordable has increased from 10% to 19%.
We asked entrepreneurs what share of their sales is accounted for by digital channels. It turned out that digital channels are used by the majority of respondents, namely 67%, of which 15% sell exclusively online. At the same time, a third of companies, namely 30%, say that online trading brings them much more profit. At the same time, another 33% of respondents said they do not use digital channels at all.
The assessment of expectations of change among SMEs increased slightly in 2023, so the forecasts are more positive than last year. The share of those who predict an improvement (37%) exceeds the share of those who believe that their business will deteriorate (35%). Another 26% do not expect significant changes in the next six months.
The dynamics of changes over the past six months are mostly negative, as more than half, namely 53%, said that the state of affairs in their business has somewhat or significantly worsened. For 28%, the business situation has not changed, and for 19%, the situation has improved.
Traditionally, the lowest of all Index components is the assessment of the economic situation in the country. The majority of respondents assess it negatively, with 34% considering the economic situation unfavorable and 31% catastrophic. It is worth recalling that entrepreneurs’ assessments of the economic situation during the active phase of the coronavirus pandemic were even worse, with 44% of respondents reporting a catastrophic situation. At the same time, in 2023, the number of respondents who consider the economic situation to be favorable increased to 11%, compared to 8% in 2022.
The top negative factors affecting business operations include the low purchasing power of Ukrainians, war and occupation of territories, economic instability, and rising prices and costs.
SMALL BUSINESS SENTIMENT INDEX – conducted by the European Business Association since 2017 within the Unlimit Ukraine project. The purpose of the study is to monitor small business assessments and sentiment and analyze growth points that will stimulate its development. The project partners in 2023 are OLX Ukraine and PrivatBank. Information partners are the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and Diia Business. The survey was conducted from December 1 to 31, 2023. Altogether, 4569 small business owners and directors of all fields of activity joined the survey. 89% of survey participants have revenues of less than UAH 30 million per year.
Unlimit Ukraine is a small business and microbusiness development platform created based on the European Business Association. The project provides comprehensive support for small and micro businesses through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the form of ownership of the individual entrepreneur without limitation of activities. Today, Unlimit Ukraine includes 7500 SMEs.
Despite the war, 3 out of 4 SMEs plan to expand their business in 2023 - these are the results of the Small Business Sentiment Index 2022 conducted by the European Business Association as part of the Unlimit Ukraine project with the information support of the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and the national project Diia.Business.
The survey demonstrates further deterioration in SME sentiment. Thus, the Index fell to 2.4 points out of 5 which is the second lowest value in the history of the study. For comparison, the Index amounted to 2.6 points in 2021 and 2.2 points in 2020.
Of the entrepreneurs we surveyed, 58% are currently dissatisfied with the state of affairs in their business, a slight increase from 52% in 2021. At the same time, the share of those who are satisfied with the state of affairs has decreased – the current 24% compared to 32% last year.
Of all the Index components, the lowest score was given to the economic situation in the country. Thus, 42% of respondents consider it unfavourable, and 29% – catastrophic. These are the realities of wartime. However, it is worth noting that during the active phase of the coronavirus pandemic, these estimates were even worse – 44% of respondents rated the state of the economy as catastrophic.
For the second time in the 6 years of the survey, not only the sentiments but also the expectations among entrepreneurs have deteriorated. Currently, the share of those who forecast that the business situation will continue to deteriorate (38%) exceeds the number of those who expect the situation to improve (33%) in the next six months.
The following factors have the greatest negative impact on business valuations: active hostilities and proximity to the frontline, destruction, shelling, power and communication outages, inaccessible loans, falling consumer demand and decreased purchasing power, logistics challenges, inflation, and tax pressure.
Despite the difficulties, the majority of entrepreneurs, namely 76%, plan to expand their business in 2023. Of these, 28% plan to expand their geography, 26% plan to launch new products, 25% plan to enter foreign markets, and 21% plan to change the number of employees.
Most respondents (67%) will raise new funds to expand their business. Most entrepreneurs rely on their own finances (30%) and to a lesser extent on grants (21%) and loans (10%). Compared to 2021, the share of loans used by SMEs has tripled – 32% of companies relied on them then.
Loans are traditionally a sore point for small businesses. In 2022, entrepreneurs encountered difficulties in obtaining loans. Among the SMEs we surveyed, 59% consider bank loans to be inaccessible or difficult to access, compared to 40% in 2021.
We also asked entrepreneurs how the attacks on the energy infrastructure have affected their businesses. Only 8% of them completely stopped their operations due to the shelling, while another 20% temporarily suspended them. Most are adapting, for example, 45% of entrepreneurs change their work schedule and/or change the volume of production or services.
To prepare for such challenges, entrepreneurs have allocated additional funds to purchase generators and other uninterruptible power sources (55%), as well as telecommunications and Internet facilities (41%). At the same time, those who do not have the financial means are forced to adjust to the schedule of outages, including working night shifts.
SMALL BUSINESS ATTITUDES INDEX – conducted by the European Business Association since 2017 within the Unlimit Ukraine project. The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate their development. The survey was conducted from December 1 to 31, 2022. Altogether, 325 small business owners and directors of all fields of activity joined the survey.
Unlimit Ukraine is a small business and microbusiness development platform created on the basis of the European Business Association. The project provides comprehensive support for small and microbusiness through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the ownership of FOP without limitation of activities. Today, Unlimit Ukraine includes 4300 SMEs.
In December 2021, the European Business Association together with LIGA:ZAKON conducted another wave of small business mood surveys in Ukraine to determine how the conditions for small business have changed over the past year. Detailed results can be found in the PRESENTATION.
According to this year’s Small Business Attitudes Index, there is a significant deterioration in the sentiment of small businesses in Ukraine. This study was conducted within the Unlimit Ukraine by the European Business Association in partnership with Mind.ua. Thus, the Index fell to 2.38 points out of 5 possible, compared to 3.07 points last year, and returned to the negative plane. These results are the lowest in the history of the study of the Small Business Attitudes Index since 2017.
Compared to previous years, the number of entrepreneurs satisfied with the state of affairs in their business has almost halved – the current 24% against 42% last year. Accordingly, the number of dissatisfied has increased – from last year’s 29% to the current 58%.
Not only the sentiments but also the expectations for the better deteriorated in 2020. For the first time in four years, expectations are assessed only at 10% higher than the current state of affairs. Only 27% of respondents expect the business situation to improve over the next 6 months, compared to 59% last year. On the contrary, 52% of entrepreneurs expect deterioration.
About half of the respondents do not plan to change the company’s HR policy next year, both in terms of the number of employees and salaries. Although there are 18% who plan to increase the number of employees, and 23% – to increase salaries.
Survey participants gave the worst points to the economic situation in the country compared to other components of the Index. Thus, 80% consider the current economic situation unfavorable for doing business. The main reasons for this are the low purchasing power of the population, the impact of quarantine restrictions, the tax burden, and fiscal pressure. It is worth noting that the tax burden which traditionally tops this anti-rating, is now in third place.
However, the tax sphere remains one of the top areas that need change for the better according to small businesses. Thus, 31% say about the need for progressive changes in the field of taxation, while another 9% report the need for deregulation and increased efficiency of all government branches.
Affordable loans and credits are a traditionally relevant topic for small businesses. According to the survey, every fifth entrepreneur plans to attract loans to develop their business in 2021. At the same time, the vast majority, namely 64% of respondents believe that getting a loan in Ukraine is difficult or impossible. Last year, such pessimistic views were held by slightly fewer entrepreneurs – 52%.
We also asked entrepreneurs what the main pandemic-induced consequences are for their businesses. The majority, namely 58%, noted a decrease in the number of orders, another 18% were forced to revise the business model and look for new directions, 10% optimized activities and reduced staff, and 3% were able to increase sales or open new markets. And only 14% did not notice the effect of coronavirus on their activities.
“The state program “5-7-9″ is adapted to the needs of business in working capital and refinancing, and it has made a significant contribution to ensure that Ukrainian business goes through the pandemic with minimal losses. However, most micro and small businesses will continue to need alternative financing sources other than bank loans. That’s why the SME Development Office, in close cooperation with our partners, focuses on the development of not yet common ways of financing such as factoring, modern offline and online business support infrastructure, as well as training and consulting support programs.”
SMALL BUSINESS ATTITUDES INDEX – conducted by the European Business Association since 2017 within the Unlimit Ukraine project. Project partner this year: Mind.ua. The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate their development. The survey was conducted from December 1 to 31, 2020. Altogether, 426 small business owners and directors of all fields of activity joined the survey.
Unlimit Ukraine is a small business and microbusiness development platform created on the basis of the European Business Association. The project provides comprehensive support for small and microbusiness through educational events and consultations, participation in special projects, diagnostics of business problems, and discussion of issues relevant to it. The participants of the project can be small and micro-businesses with the ownership of FOP without limitation of activities. Today, Unlimit Ukraine includes 2400 SMEs.
Mind.ua is an independent business media portal aimed at creating a quality product that is useful to the readers. Mind professes “knowledge journalism” which means telling, explaining, and providing the reader with the opportunity to make conscious choices in various spheres of life – economic, cultural, social, and entrepreneurial ones.
The results of the Small Business Attitudes Index, conducted for the third year in a row by the European Business Association within the Unlimit Ukraine project, showed an increase in optimistic views among Ukrainian entrepreneurs. Thus, the index reached 3 points out of 5 possible, compared to 2.7 points last year, and finally came out of the negative plane.
In general, it can be seen as a positive trend, compared to the results of previous years. The number of satisfied with the current state of business has increased significantly – from last year’s 31.6% to the current 42%. In addition, the number of those who are not satisfied with the current economic situation decreased – 29.2% against 38.4% last year.
The number of entrepreneurs who expect an improvement in the business situation has increased by 10% compared to last year – 58.7% against 47.4%. Almost half of the entrepreneurs plan to increase the number of employees – 40.8% plan to hire new people, and only 9.6% plan to cut. In addition, 44.6% plan to increase the salary for their workers. Over the past year, entrepreneurs’ satisfaction with their level of profits has increased dramatically – almost one and a half times. Last year, only 27% of respondents were satisfied with their income, and now there are 40.7% of them. However, it should be noted that the vast majority (59.3%) would still like to earn more.
At the same time, according to 69.1% of respondents, the economic situation is still unfavorable for doing business. Although the number of dissatisfied decreased by 3% (it was 72.2% in 2018), the number of entrepreneurs skeptical of the country’s economic environment remains quite large. Thus, the biggest obstacles to the business were the tax burden (49.6%) and the high level of corruption (46%). It should be noted that dissatisfaction with these two factors decreased compared to 2018 (56.4% and 51.9% respectively). Besides, entrepreneurs have become less concerned about inflation issues, shortage of qualified personnel and the War in the East. However, concerns about the complexity of tax administration and pressure from judicial and regulatory authorities have increased.
Due to the violation of tax regulation, 35.1% of entrepreneurs were fined in the last 3 years. Most (33.1%) were simply late in paying their taxes, and 10.8% made mistakes in reporting. However, the reason for this situation, according to respondents, is often the lack of clarity in procedures and the lack of knowledge of entrepreneurs in taxation changes. In addition, almost 10% of the respondents complained about the irregularity of the control bodies’ decisions during tax audits.
It is not surprising that, if entrepreneurs had the opportunity to change one factor affecting the country’s economy for the benefit of their businesses, most of them (29.8%) would have changed tax legislation. Priorities in this area would be to simplify tax procedures and reduce tax rates. The idea of deregulation was endorsed by 8.5% of those polled who want to simplify the conditions for doing business and developing digital technologies in the public services sector.
SMALL BUSINESS ATTITUDES INDEX – conducted by the European Business Association since 2018 within the Unlimit Ukraine project. Project partners this year: LIGA:ZAKON, 28Quadrate, Ministry of Digital Transformation. The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate its development. The survey was conducted from October 29 to December 18, 2019. 632 small business owners and directors of all fields of activity joined the survey.
These are the findings from the Small Business Attitudes Index, conducted for the second straight year by the European Business Association within the Unlimit Ukraine project. This year, small business representatives slightly worsened their assessment of their own development prospects and economic situation in Ukraine. According to the survey, the overall Small Business Attitudes Index dropped to 2.7 out of 5, compared to 3.2 last year.
Compared to last year, small businesses in Ukraine have found it more difficult to operate. Thus, 38.4% of respondents were dissatisfied with the current business environment, while 31.6% of entrepreneurs are quite satisfied with the situation. For comparison, last year’s positive sentiment prevailed – 45% satisfied against 26% dissatisfied. Also, according to the results of the survey, negative attitudes to the dynamics of business development over the past 6 months prevail – 44.4% against 30.1%.
Despite such sentiments, the surveyed entrepreneurs are willing to actively develop their business in 2019. More than half of respondents (53%) plan to increase funding, and 66% expect revenue growth in the first half of 2019. At the same time, almost half of businessmen (47%) expect the situation in business to improve within the next 6 months. Of these, 65% plan to hire new employees, 77% plan to raise wages, and the same number of entrepreneurs are going to increase investment in their business.
The main problems for the business have slightly changed. Last year most entrepreneurs named inflation as one of their main concerns and this year it ranks only 4th among topical problems for the business (43%). Entrepreneurs are much more concerned about the high tax burden – it was named by 56% of respondents, the high level of corruption (52%), as well as the war in the east (47%).
If entrepreneurs had the opportunity to change one thing in favor of their business, most of them would change the level of taxation. A quarter of respondents believe that this is a major problem for business. The availability of credit follows next by a large margin with 10% of respondents who want changes in this area. The state support for business and purchasing power of the population account for 9% each.
SMALL BUSINESS ATTITUDES INDEX – conducted by the European Business Association since 2018 within the Unlimit Ukraine project. Project partners this year: LIGA:ZAKON, BRDO, 28Quadrate. The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate its development. The survey was conducted from December 5 to December 31, 2018. 133 small business owners and directors of all fields of activity joined the survey.
Small business in Ukraine develops actively and is optimistic for 2018, despite the unfavorable business climate as reported by the Small Business Attitudes Index, conducted for the first time by the European Business Association together with LIGA: ZAKON within the Unlimit Ukraine project. The integral Small Business Sentiment Index is 3.2 out of 5, which is a neutral score.
At the same time, such components of the Index as the evaluation of the current state of business, the dynamics of its development over the past 6 months, the forecast of the situation for the next 6 months and the evaluation of the business climate reflected radically opposite sentiments among the entrepreneurs.
The survey demonstrated strong optimistic sentiment in the expectations of business for 2018. 76.2% of those surveyed expect that their business situation will improve in the next six months. 87% expect income growth in 2018. Entrepreneurs are showing great optimism in their business development plans this year. In particular: 54.2% plan to increase the number of employees, 57.3% – to raise the level of salaries of employees, 64.3% – intend to increase the amount of financing for their business in 2018. The study shows that small businesses are export-oriented. 27% of companies surveyed have already entered foreign markets, and 30.3% plan to enter this year. Companies are committed to developing their businesses and reinvesting their earnings into their businesses.
Limited access to credit hampers the development of small businesses. According to the survey, 82% of companies are in need of credit funds. At the same time, 65% of respondents have difficulties with obtaining credit, of which 15.5% consider that it is absolutely impossible to receive loans.
Overall, the economic situation in Ukraine is not beneficial to small business development, according to 68.2% of those surveyed. Only 3% of respondents are completely satisfied with the business climate in Ukraine. Inflation (56.3%), tax burden (42.24%), high levels of corruption (41.9%), and lack of qualified specialists (39.3%) are the main factors for negative assessment of the business climate. At the same time, only 4% believe that inflation is the main reason that hinders business development.
About 21.6% of those polled want to change the tax system. 14.7% of respondents are most concerned about the availability of credit, while 9% consider corruption to be the most unacceptable. 6.1% of the respondents would first like to change the situation with state support for the business and purchasing power of the population in favor of their enterprise.
SMALL BUSINESS ATTITUDES INDEX – first conducted by the European Business Association and LIGA: ZAKON in 2018 within the Unlimit Ukraine project. The purpose of the study is to collaborate with small and microbusinesses and to analyze growth points that will stimulate its development. The survey was conducted from October 29 to December 18, 2019. 278 small business owners and directors of all fields of activity joined the survey. About 40% of the companies surveyed were founded during the turbulent 2015 – 2017.
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