The new strategy of Romanian entrepreneurs: “Cash is King”. This can help them purchase some competitors, the authors of a study say

The forecasts related to profit of Romanian entrepreneurs are considerably more pessimistic compared to the second half of last year, as well as those regarding the number of employees.

The strategy “Cash is King” is again in great value – Romanian entrepreneurs are more aware that they must be prepared to cope with any periods of financial uncertainty by accumulating cash reserves.

In addition, this can offer them even more openness towards accessing certain opportunities, such as purchasing market competitors, shows the results of the Confidex study.

“There are many companies now that focus on having a cash reserve,” admits Adrian Hălmăgean, Avis.

“I learned that if you want to develop, you have to invest, as we did. We had, at the time we made the acidophilic factory, we had a turnover of 4 million euros and I made an investment of seven. Because in the business it is not just about winning immediately. As long as you invest in your product, and no more, These, you will be a winner at some point.

Production costs and prices of products or services have increased in the last year, and Romanian entrepreneurs say this trend will continue.

The biggest difficulties that local business entrepreneurs and managers feel are navigating through an uncertain political economy and situation.

They admit that the only viable solution is to “go ahead” and even in the context of maintaining a more prudent attitude.

The tendency of diversification at the level of products, services, markets, as well as the integration of technology into their own businesses as measures to maintain and even increase the business results, continues.

Over half of the entrepreneurs have noticed an increase in production and operation costs (71%), as well as the sale prices of the products or services offered (55%). However, 43% of companies report a decrease in profit.

For the next period, managers focus on aspects that support the stability and development of business, especially on improving the relationship with customers (29%) and increased sales (47%).

The hardships that Romanian entrepreneurs face

• “We are prepared for two scenarios, with or without war. And if it is the worst scenario, regardless of the crisis, there is a way to survive … and in our business we can generate a state of well-being that can make us remain relevant.” – Damian Alexandru, AMD Nobel Pharmaceutical.
• “I am more concerned about my direct business problems than Romania's macroeconomics. I have nothing to do with macroeconomics. I am looking for solutions to what I can solve. If the macroeconomic context is changed, the context of my business is changed. I adapt. I see what to do.”-Annemarie Fabian, Solo.
• “There are many uncoated niches, categories that are completely missing, which are not addressed at all. There are multiple development opportunities. But we do not have an administration that will take anticyclic measures. And we do not understand a very simple principle: the higher revenues come only from investments or quality increase.” – Adrian Cocan, Milkfarm.
• “When it comes to the national economy, I am neither very worried nor very relaxed. But I see it, say, in the right direction. I think there are many opportunities that we should see. Although those who lead us … I guess the war in Ukraine will end and I think it will be a good opportunity,”
• “What the policy does-whether or not the taxes increase, the VAT, whether the war extends or ends-is not under our control. We must focus on what we can control and keep what we have, maybe add something.” – Veronica Preoteasa, Vedra SRL.