More entrepreneurs open their own business after unemployment

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The share of entrepreneurs who opened micro and small industries after becoming unemployed grew 20% in the last four years, according to an indicator prepared by Simpi-SP (Union of Micro and Small Industry of the State of São Paulo) in conjunction with Datafolha.

According to the survey, in 2022, more than half of entrepreneurs in São Paulo (54%) were not working when opening their own business, while 42% of respondents said they had left a job to undertake.

After completing five months out of the hospitality market, Fernanda Maschio decided, in March 2020, to change her professional trajectory and started selling handmade frozen pasta to order. “As it was right at the beginning of the pandemic and people were indoors, it ended up working very well. After two months, I already had to buy three new freezers and, in September, I rented a property to be able to expand the entire production line and bought machinery”, he says.

From there, Maschio greatly expanded the range of customers and started selling pasta to restaurants, markets and hotels.

Today the factory, located in the north of São Paulo, has seven employees and the biggest difficulty is accessing credit. “When you’re starting it’s very difficult to get credit. At first I ended up asking for a loan from people close to me. Today I’m using bank financing. But it’s challenging to have cash flow, pay for machinery and supplies”, he explains.

The problem faced by Maschio is quite common among entrepreneurs. According to the survey, credit (15%), followed by bureaucracy (14%) and resources to invest (13%) are the most frequent obstacles when opening a business among entrepreneurs interviewed in São Paulo.

“With the rise in interest rates, linked to inflation, there is a restriction in the financial system. And getting credit in banks becomes more difficult and this issue will still be an agenda for entrepreneurs for a while”, says Joseph Couri, president from Simpi-SP. “We are living in a critical moment, with the issue of the pandemic and the war in Ukraine. There were many financial and production chains hits. What you can see is that many people opened their own business because they had no other option”, he says.

The survey also points out that the assessment that the financial situation has improved after starting a business has risen this year compared to 2018. For 74% of respondents, the current situation is better than before starting a business. Four years ago, 58% of entrepreneurs were satisfied.

The survey also shows that almost half of the entrepreneurs (49%) work six or seven days a week. And that, this year, they are working longer hours — 59% of entrepreneurs said they work more than 9 hours a day. In 2014, the percentage was 55%.

The survey was carried out between the 7th and 27th of July and heard 243 businessmen in São Paulo.

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