Business environment in the perspective of entrepreneurs of Aloja municipality

Baiba Birzgale Business consultant Aloja Municipality council [email protected]

www.aloja.lv

Aloja March 27, 2015

Aloja municipality consists of:

 Aloja town and parish  town and parish  Brīvzemnieku parish  Braslavas parish

Area: 626.59 km2 Population: 5536 (as of 01.01.2015.)

Dynamics of enterprise registration

Type 2011 2012 2013 2014 2015 TOTAL CURRENTLY Entities 22 14 12 18 8 74 478

Sole Proprietorship (SP) 3 0 0 1 0 4 18

Individual enterprise (IE) 0 0 0 0 0 0 21

Limited Liability 18 14 12 15 8 67 144 Company(LLC)

Cooperative society (SC) 0 0 0 0 0 0 9

Farm 1 0 0 2 0 3 286

Organisations 6 4 1 6 0 17 54 Congregration (new) 0 0 0 0 0 0 1 (CONGN) Congregation (CONG) 0 0 0 0 0 0 3

Society (SOC) 4 3 1 5 0 13 46

Foundation (FND) 2 1 0 1 0 4 4

Total 28 18 13 24 8 91 532

Source: Lursoft 2015,ER Company registration and liquidation dynamics in Aloja municipality

Reg. Liq. Reg. Liq. Reg. Liq. Reg. Liq. Reg. Liq.

Years Number enterprises of

Statistical data on the number of companies registered on yearly basis (in Register of Enterprises of ) Reg.- registered; Liq.-liquidated Source: Lursoft 2015, ER Enterprises in Aloja municipality

Enterprises in Aloja municipality in accordance to legal forms of entrepreneurship

Sole Proprietorship (SP) Individual enterprise (IE)

Limited Liability Company (LLC) Cooperative society (SC)

Farm

Source: Lursoft 2015,ER Most common types of activities in Aloja municipality 1. Agriculture, forestry and fishing – 313; 2. Crop production and livestock production, hunting and other related activities - 272; 3. Forestry and logging– 41; 4. Manufacturing- 20; 5. Wholesale and retail trade;car and motorcycle reparation– 16; 6. Construction - 15

Source: CSB 2015, ER Enterprises with the biggest turnover

1. LLC «ALOJA- STARKELSEN» 2. LLC «MARKO K» 3. LLC «EEMR TRANSPORT» 4. LLC «BORDERLINE» 5. LLC «TĒRAUDIŅI» 6. LLC «DRAUGU DĀRZS» 7. LLC «AVOTIŅŠ LC» 8. LLC «MKM GRUPA» 9. LLC «TRĪS NIANSES» 10. LLC «DK APSĪTES»

Source: LURSOFT 2015, ER

Entrepreneur survey results (1) ● Entrepreneurs of Aloja municipality took part in the survey in the time period from 29.12.2014. till 6.02.2015. ● Nr of respondents: 15; business executives: 13; others: 2. ● Respondents' fields of activity:  agriculture;  forestry and timber processing;  construction  transportation services;  buildings management;  tourism;  veterinary;  accounting services, etc.

Enterprises 2 2 1 1 1 1 2 1 2 2 Foundation year 1992 1994 1995 2003 2004 2005 2007 2008 2012 2014

Entrepreneur survey results(2)

Entrepreneurs of Aloja town 6

Entrepreneurs of Aloja parish3

Entrepreneurs of Staicele parish 1

Entrepreneurs of Braslava parish 2

Entrepreneurs of Brīvzemnieku parish 1

Entrepreneurs of Aloja municipality 2 Entrepreneur survey results(3)

Number of employees in the enterprise

− Number employees of

Number of enterprises Entrepreneur survey results(4)

Forms of Respondent enterprises

LLC Farms Self-employed Entrepreneur survey results(5)

Problems associated with foundation of an enterprise

No problems

Legislation

Lack of resources

Lack of information on entity foundation Lack of entrepreneurial skills

Lack of financial recourses, funding

Bureaucracy

Number of enterprises

Entrepreneur survey results(6)

Business development opportunities in municipality

Very good Good Moderate

Bad Very bad No opinion

73% of respondents assess their business development opportunities in Aloja municipality as moderate, good or very good! Entrepreneur survey results(7)

Over the past two years in the company...

Remained stable o Increased

umber

Decreased

N of

employees

Remained stable h Increased

Turnover Decreased

Remained stable h Increased

Profit

Decreased

Number of enterprises

47% of enterprises have incresed their profits

Entrepreneur survey results(8)

In the next 3 years the entrepreneurs plan to...

No opinion

No of of es

the Nr

Reduce Reduce Yes employe

No opinion

No

es

Yes

employe

Increase Increase the Nr of of the Nr

No opinion

ns No

Narrow entities

operatio Yes

down thedown

No opinion

No at

s

level Yes

current

entities

Maintain operation

No opinion

No

ons

operati Expand Expand

entity’s Yes

Number of enterprises

66% of entereneurs plan to increase the Nr of employees; 80% do not plan to narrow down the entity’s operations; 66% plan to expand the entity’s opeartions Entrepreneur survey results(9)

●47% of entrepreneurs plan to buy land or building in Aloja municipality in the following 3 years period; ●33% of entrepreneurs plan to lease land or building in Aloja municipality in the following 3 years period;

It is very important to set up the investment object database!

Entrepreneur survey results (10)

● Very actual obstacles that hinder the development of enterprises:  high taxes for 54% of enterprises;  large number of controlling institutions for 47% of enterprises;  lack of qualified labour for 47% of enterprises. ● Actual obstacles that hinder the development of enterprises:  inaccessibility of banking services in the municipality for 47% of enterprises;  lack of current assets for 46% of enterprises;  difficulty to get a loan/attract other financial resources for 40% of enterprises;  Low demand for goods and services produced for 34% of enterprises. Entrepreneur survey results(11)

Main obstacles that hinder the development of enterprises in Aloja municipality :

bad lack of qualified infrastructure,

labour mainly roads

small insufficient number of exchange of population, lack of information low between local premises and purchasing government and land power no common entrepreneurs strategy for the business support in the municipality Entrepreneur survey results (12)

The main factors required for the enterprise’s growth

Equal competition

Modernization

Increase in the customer number

Tax incentives

Availability of financial resources

Motivated and qualified labour

Availability of land and buildings Entrepreneur survey results(12)

Activities that definitely need to be carried out in Aloja municipality

Engage entrepreneurs in territory improvement activities

Organise specialist consultations for entrepreneurs

Organise grant competition for new entrepreneurs

Organise entrepreneur days, business awards ceremonies

Organise seminars, discussions for new entrepreneurs

Facilitate the information flow from the municipality

Provide information on fundraising activities

Entrepreneurs Entrepreneur survey results(13) Recommendations for Aloja monicipality council Establish a business Promote incubator language Ensure the learning availability Involve local of legal producers in advice Create an tourism advertising campaign, a routes Encourage video about the residents to region, activities that entrepreneurs can create new Promote local working-places Organize companies, seminars, their production in discussions, webpage and study visits elsewhere Entrepreneur survey results(14)

Entrepreneurs need Financial consultant consultations in:

Tax consultant

Lawyer

Marketing consultant

Engineering specialists

Project Manager

Consultations on EU fund attraction

Entrepreneur survey results(15)

Economic specialization in Aloja municipality consists of

Timber Agriculture processing

Food production Entrepreneur survey results (16)

ES funding Entrepreneurs need seminars, lectures on.. Business support institutions and programs

Taxes

Business plan and marketing strategy development

Sales promotion

Marketing and branding

Human resource management Entrepreneur survey results (17)

Entrepreneurs as fundraising tools most commonly use...

ES structural funds 67%

Commercial long-term loans 40% Subsidies 27%

Private investors 27%

Leasing company services 27%

Commercial short-term loans 13% Entrepreneur survey results (18)

Infrastructure that is required for the development of enterprises, but is not available

Everything is available

Land offers

Access-roads and communications

Industrial areas

Telecommunication and IT

Power supply

Solid waste management

Water supply, sewerage

Infrastructure Building, premises supply

Motorways

Enterprises

Thanks to entrepreneurs for responsiveness!

Baiba Birzgale Business consultant Alojas Municipality council Phone: 0037125749131 [email protected]