First 'Recovery Status Survey' for Closed Small Business Owners

Sojinkong Launches System to Strengthen Support for Business Rebound

[Asia Economy Reporter Kim Daeseop] The Small Enterprise and Market Service (SEMAS) is set to launch a full-scale survey on the revival status of small business owners who have closed their businesses or wish to close them. The survey will target 400 closed small businesses and 600 small business owners hoping to close, with plans to complete the survey by the end of May this year. This is the first time SEMAS is conducting a revival status survey for small business owners.

According to SEMAS on the 2nd, the survey will be conducted by categorizing small business owners into those who have closed their businesses and those hoping for closure, business conversion, re-startup, or employment. For small business owners who have closed their businesses, the survey will cover aspects such as the business and number of regular employees before closure, criteria for deciding to close, reasons for closure, duration and costs of closure, debt costs at the time of closure, and demand and awareness of government support policies.

For small business owners hoping to close, the survey will investigate business characteristics, representative’s age, number of regular employees, average monthly sales, management status, degree of ongoing difficulties, management challenges, triggers for recognizing critical situations, future plans, and demand for government support policies.

This survey is part of the process to establish a system to strengthen support for the revival of small business owners. Strengthening support for small business owners’ revival is one of SEMAS’s key tasks this year. In January, SEMAS announced its top 10 key tasks for the year, revealing a one-stop revival support direction that provides consulting, financial support, and revival education as a package for small business owners who have closed or are planning to close their businesses.

SEMAS plans to encourage revival by providing 'Special Rechallenge Funds' to small business owners with low credit ratings but excellent technical skills and growth potential. The budget for the Special Rechallenge Funds this year is approximately 50 billion KRW.

Earlier, in November last year, SEMAS held an opening ceremony for the Small Business Revival Support Centers (30 locations) and has been operating them since. These centers were established to reduce difficulties such as lack of information and economic burdens experienced by small business owners during the closure process and to support their revival as a stepping stone. Each center is staffed with dedicated personnel who comprehensively support the entire process from business closure to revival for small business owners.

Domestic small business owners are facing significant difficulties due to continuous domestic demand stagnation and excessive competition caused by an increase in livelihood-type startups.

According to a 'Small Business Management Status and Policy Tasks' survey conducted by the Korea Federation of SMEs last year targeting 500 small businesses, 33.6% of the businesses seriously considered business conversion or temporary/permanent closure within the past year.

In particular, the post-closure plans of businesses considering closure were 'No plans' (36.3%), 'Employment as a worker' (20.8%), 'Retirement' (20.2%), and 'Re-startup in a different industry' (17.3%). Nevertheless, difficulties such as 'No buyer' (63.1%), 'Burden of livelihood maintenance after closure' (58.9%), and 'Difficulty recovering key money' (41.1%) (multiple responses allowed) prevented them from closing their businesses.

The Ministry of SMEs and Startups plans to invest 2.4956 trillion KRW this year in support projects such as small business revival support, market access, and policy fund loans, an increase of 411.3 billion KRW compared to last year. SEMAS is a public institution under the Ministry of SMEs and Startups.

A SEMAS official said, "We are conducting the small business revival status survey in consultation with the Ministry of SMEs and Startups," adding, "We plan to select a research service company this week."

This content was produced with the assistance of AI translation services.