4 out of 10 Small Business Owners Say "Business Difficulties Due to Commercial Area Decline and Intensified Competition"

Decrease in Sales Revenue and Operating Profit per Business Compared to Previous Year

[Asia Economy Reporter Kim Heeyoon] In a government survey conducted last year targeting small business owners, 4 out of 10 reported difficulties in management due to commercial district decline and intensified competition.

This was confirmed in the provisional results of the '2019 Small Business Owner Survey' announced on the 28th by the Ministry of SMEs and Startups and Statistics Korea.

The management difficulties reported by small business owners with multiple responses were commercial district decline (45.1%), intensified competition (42.2%), raw material costs (26.6%), and rent (18.3%) in that order.

The number of businesses was 2.77 million, an increase of 1.1% (30,000) compared to the previous year. Wholesale and retail trade accounted for 32.1% (890,000), accommodation and food services 23.8% (660,000), and manufacturing 13.0% (360,000) in order.

The number of employees was 6.44 million, an increase of 1.9% (120,000) compared to the previous year, with wholesale and retail trade at 29% (1.87 million), accommodation and food services at 24.1% (1.55 million), and manufacturing at 18.3% (1.18 million) in order.

Regarding business type, individual proprietors accounted for 90%, and corporate businesses 10%. By age, those in their 50s were the largest group (34.2%), followed by those in their 40s (26.7%), 60 and older (23.8%), 30s (12.8%), and 20s and younger (2.5%).

The average preparation period for starting a business per establishment was 10.2 months (an increase of 0.7 months), and the startup cost was 102 million KRW (a decrease of 1 million KRW), of which the self-funded amount was 75 million KRW (73.5%).

Annual sales remained at the previous year's level of 235 million KRW (19.58 million KRW per month), operating profit was 33 million KRW (a 3% decrease, 2.75 million KRW per month), the proportion of businesses holding debt was 51.9% (an increase of 3.5%), and the debt amount was 17.1 million KRW (a 5.2% decrease).

A Ministry of SMEs and Startups official stated, "Once the final results are released in February next year, we plan to use in-depth analysis to strengthen support systems tailored to the life cycle of small business owners and to establish customized policies." He added, "When designing the survey items for small business owners to be conducted next year, we plan to actively reflect the impact of this year's COVID-19 situation, accelerating digitalization, and the trend toward contactless and online business."

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