Study suggests new Latvian businesses do rather well

More than half of new entrepreneurs report that their income level has increased after starting the business, according to a survey carried out by the finance institution Altum, Latvian Radio reported March 11.

The study was carried out in late 2023 in collaboration with the research agency Norstat. 200 representatives of Latvian companies were surveyed, who started their business in the last 3 to 5 years. A similar study was also conducted five and seven years ago.

Income levels after starting their own business rose 59% of those surveyed, but overall satisfaction with life for more than two-thirds, a relatively high figure.

It is the desire to work independently, not under anyone's authority, that 73% of those surveyed have indicated the greatest motivation for starting their own business, and the significance of this argument has increased, because in previous polls fewer people mentioned this factor as the main motivation. The desire to improve one's financial situation is the second most frequently mentioned motivation factor to start one's own business.

Compared to the time before starting their own business, nearly two-thirds of respondents have observed an increase in personal income – about one in five new entrepreneurs have seen it increase significantly, while for 38 percent it rose slightly.

At the same time, two-thirds say that the level of stress experienced everyday has also increased, and this is more often highlighted by those entrepreneurs whose core business takes place in the capital city.

The study also surveyed the businesses regarding the three most difficult things to start a business in Latvia.

Most indicated uncertainty about the future and whether the business idea will succeed, attraction of funding, and lack of personal income as challenging.

Reinis Bērziņš, chairman of the board of Altum, said the study's data was “surprisingly good” because entrepreneurs have been able to be flexible and understand what the modern situation is to start a business.

“It should be mentioned that overall uncertainty about the future is about 40%, but the challenges related to funding are two – one is the availability of funding in general and the other – finding a personal part of funding,” Bērziņš commented.

Meanwhile, the study Turība Business Index carried out at the end of last year by the University of Business “Turiba” indicates that entrepreneurs' opinion on the business environment in Latvia deteriorated last year.

The value of this index has slipped from negative 16.3 points to 21.5 points during the year, which means 61% of entrepreneurs expressed a negative assessment of the business environment in Latvia, while 39% of entrepreneurs recognized it as good or very good. 

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