SMEs’ financial situation weakened early in the year

The financial situation of SMEs weakened early in the year, the latest Yrittäjägallup shows.

The smallest companies are under the greatest pressure. Sole traders and businesses employing fewer than five people report significantly weaker conditions than other SMEs.

“The start of the year has been difficult for many business owners, as uncertainty continues and there have been no clear signs of an economic turnaround,” says Mikael Pentikäinen, the CEO of Suomen Yrittäjät, the Finnish SME association.

In February, 44% of SMEs rated their situation as good, compared with 46% in December. Meanwhile, 21% now describe their situation as poor – the weakest figure since spring 2022.

Companies employing at least ten people report a stronger situation than sole traders and micro-businesses. Women business owners report weaker a financial situation than men. Differences between sectors and regions are fairly small.

“The business community is divided. Some are doing poorly, others quite well. Many of the smallest companies are under pressure.

“The difficulties facing the smallest companies must be recognised and measures taken to ease their situation. From this perspective, reform of the Entrepreneur’s Pension Act is important. Many business owners are struggling to cope with their current pension contributions,” Pentikäinen says.

A total of 1,185 SME representatives responded to the Yrittäjägallup survey, 45% of whom were sole traders.

Outlook improving

Although the current situation is challenging, confidence in the future has strengthened. Thirty-five per cent of SME respondents expect conditions to improve over the next year. This compares to 32% in December.

The strongest confidence in improvement is in professional services, industry and among younger business owners. Woman business owners also report slightly more positive expectations than men.

“It is encouraging that many believe the situation will improve during this year, particularly women business owners,” Pentikäinen says.

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