Businesses with 1-4 employees keep the economy “alive”

Businesses with 1-4 employees keep the economy “alive”

They employ 4 people at most. Mainly relatives and friends. But if they are added up, they make up for 33.2% of the total number of people employed in active businesses in the country. Here, we’re referring to those businesses which employ only 1-4 people, but which in fact are an added value for the Albanian economy in general, because they not only offer employment opportunities, but they also generate revenues.

Their annual turnover is significant. Referring to the Institute of Statistics, businesses that employ 1-4 people, make up for 89.3% of all businesses in the country and they realize 14.3% of the total number of sales. These figures are higher if we consider the fact that for the same period covered by INSTAT in this study, businesses with more than 50 employees only make up for 1% of active businesses. This is explained by the tax facilities that benefits a small business that employs one to four people and which individually declares a low level of turnover.

But in total, these small businesses have the highest level of turnover. Such businesses include coffee shops, pizza restaurants, betting points, etc. All of these businesses do not require a high level of initial investment, but they generate a secure turnover, however small that is. This is the reason why businesses that employ 1-4 people dominate. Meanwhile, companies which employ 10-49 people mostly belong to the trade sector, because they require more employees to deliver certain functions. In the meantime, according to INSTAT, hospitality and food services sector has the largest number of companies that employ 1-4 people.

COMPARISON

 Out of a total of 104.534 businesses,

93.376 employ 1-4 people

Out of 104.534 businesses active in the country during 2015, 93.376 of them employed 1-4 people. This is a significant level compared to 1.031 businesses that employ more than 50 people or 4300 businesses that employ 10-49 people. According to official figures, the number of businesses that employ 5-9 people is also small, not exceeding 6000. This shows that people are very cautious when opening a business in Albania, especially in relation to the employment aspect, preferring to risk less and employing fewer people.

Number of service companies grows

 The number of private enterprises in Albania is growing. This is indicated by the latest figures of the Institute of Statistics, according to which, in 2015, the number of active businesses in our country grew by 22.7%. In this aspect, businesses offering services come first, taking credit for the growth of this figure, occupying 20.8% of the level of growth. In terms of the number of businesses, the highest number belongs to the trading sector, namely 43.1%, followed by hotels and restaurants with 17.8%. Meanwhile, the extractive industry saw the smallest number of active companies on a national level in 2015 with only 626 companies, which occupied only 0.6% if the total number of companies. The trade sector also has the highest level of net sales, namely 48.3% of the total and the highest level of employment, 25.7% of the total in 2015.

The bigger a business is, the bigger the investment

The bigger a business is, the bigger is the investment that it must make to continue its operations. This is indicated by the figures and according to them, the sector that has made the most investments, up to 63% of investments, is the one that involves companies that employ more than 50 people. Namely, the sector with the highest level of investments is the energy and water sector with 60 billion ALL during 2015, occupying 28.6% of the total number of investments.  Meanwhile, businesses dealing in services, which employ 1-4 people, have made only 38.3% of the total level of investments. This explains the fact that it is the favorite business for Albanians. Meanwhile, investment in the sector of construction has dropped by 8.8%.