Survey: New businesses in Romania set up by entrepreneurs over 30

Most entrepreneurs setting up a company in Romania are aged over 30 and chose the services sector, according to a recently released survey of the National Statistics Institute (INS). The survey, which looked at the establishment of new companies in 2016, found a higher preference for establishing companies over individual enterprises, in most of the development regions in the country. The average number of employees of an individual enterprise in 2016 was of 1.6, while companies employed on average 3 people. Most new enterprises (58.9%) fell into the 0 employees category, the INS survey showed. Most entrepreneurs choose to undertake their activity in one location. In 2016, over 60% of the new businesses had their registered HQ at the founder/manager’s residence, while the rest functioned out of independent locations. In the Sud-Muntenia and Sud-Vest Oltenia regions, 77.2% of the newly established business undertook their activity in one location, while the same happened for 60% of the new businesses in the Sud-Est region. Most of the businesses set up in 2016 were active in the services industry (31.2%), followed by retail (28.4%), industry activities (15.9%) and transport (11.5%). The industry area was most attractive in the Nord-Est and Sud-Muntenia regions, while construction was the preferred area for new businesses in the Centru and Vest regions. In the Nord-Est region, 35.5% of the businesses set up in 2016 were registered in the retail industry, where 22.8% of the businesses in the Nord-Vest region were also found. The survey also found that most new businesses have difficulties caused by the lack of available funds, the lack of clients, late payments, limited access to credits and limited access to well-trained workers. A lack of funds was reported by most business in the Centru (88.7%) and Sud-Est (84.9%) regions. The Sud-Vest Oltenia and Sud-Muntenia regions reported difficulties with limited access to credits, at 47.8% and 47.7% respectively. The Sud-Est, Nord-Vest, Sud-Vest and Vest regions had the highest percentages on the issue of the lack of technology: 38.2%, 36.7%, 23.6%, and 23% respectively. At the same time, the issue of limited access to well-trained employees was an increasing problem in the regions of Bucharest-Ilfov, Vest, Sud-Vest and Centru. The newly set up businesses are established by managers with a high school or university education (60.3%), aged between 30 and 39 years old (35.5%). The survey also showed that over half of the new businesses were established by men, but the percentage of new businesses established by women also went up compared to 2015 to reach 44.5% in 2016. The highest share of women founders was recorded in the Vest region, and the lowest in the Sud-Muntenia region. If up to the year 2001, the share of founders with a high school and university education stood at around 25%, this exceeded 55% in the last years, the survey found. Around two thirds of new businesses survive one year after their establishment. In 2016, the survival rate at one year was of over 65%. At the opposite end, 14.3% of new businesses stopped their activity one year after establishment, up 8% compared to 2015, while 16% of them were still inactive one year after establishment. The survey can be read in Romanian