Swiss small business face common problems

Beat Schillig, head of the Institute for Entrepreneurs (IfJ) swissinfo.ch

This month hundreds of small business owners in the Greater Zurich region were asked about the difficulties of establishing their own business.

The statistically significant response (621 responses to 12,000 surveyed) showed that finding customers and access to capital are on the minds of small business owners.

The survey, conducted by a privately-owned, small business training company called the Institute for Entrepreneurs (IfJ), asked a half dozen questions with multiple choice answers via an email survey.

The most pressing problem for respondents were winning customers (39 percent said it was a big problem while only 2 percent said it was no problem)

Other main concerns were getting the word out about their company and securing finance for the first few months of business (47 percent said it was a big problem compared to 3 percent that said it was no problem).

Typical respondents owned consulting or service-oriented companies that employed six or more people.

“It is interesting to see that the biggest problems for a small business in Switzerland are no different than elsewhere,” said Beat Schillig, who currently heads up the fourteen-year-old IfJ. “That result was one of the surprises to us”, he added.

The financing referred to is the money the respondents needed to live while they found their first customers.

“They need business cards, an office, computers and so on,” said Schillig. “Even if a practice or a consultancy is not a capital intensive business, the startup money can be hard to get if you don’t have substantial savings or a rich family.”

The kinds of firms the IfJ typically deals with are non-capital intensive businesses, such as tradespersons, professional consultancies, such as lawyers, and other small, service-oriented businesses.

Not venture capital targets

These are not typically targets for venture capital investors.

“When it comes to small and medium sized businesses, only about 1 percent of all the firms founded [here] are suitable for venture capital or programs like the CTI startup,” observes Schillig. “This group represents the opinions of the other 99 percent of firm founders.”

In a section of the survey that asked specifically what Switzerland could do to improve the infrastructure for small business, respondents asked for taxation privileges and better access to capital.

One original request was for the government to put all commercial applications and authority notification forms online so that establishing a company would be largely an online process.

Respondents were encouraged to write in their own words suggestions to Eric Scheidegger, who heads up the relevant department at the Swiss Secretariat for Economic Development (SECO).

One respondent asked for the “eternal” evaluation of what makes an entrepreneurial community successful to “finally end” and for action to begin.

Yet another respondent made a pitch for the media to be somehow influenced to report more positive news.

The constant bombardment with information about how bad the economy is doing creates fear which, said the businessperson, kills motivation and “a) prevents businesses from ordering new equipment or signing new contracts and b) stops entrepreneurs from creating new companies.”

Valerie Thompson