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Most businesses in Budapest had no crisis plan

Approximately 93% of companies in Budapest view future business prospects as unfavorable and about 78% of them had no emergency plan at hand for a crisis like the current one, according to a survey of 1,895 companies, conducted by the Budapest Chamber of Commerce and Industry (BKIK).

Approximately 83% of the surveyed businesses were micro-enterprises, about 15% were SMEs, while larger enterprises made up 1%.

Some 65% view the business prospects for the next six months as very unfavorable, while 28% think it is only rather unfavorable. BKIK notes that larger companies gave generally less negative answers. A bit more than half of the surveyed businesses are already experiencing problems with production, supply chain, and services.

How businesses reacted to the coronavirus crisis varies greatly. About 33% introduced home office for employees, 19% sent employees on an unpaid leave, 12% sent them on a paid leave, while another 12% handles the situation according to terms defined in the employment contract.

Larger businesses were generally more capable of switching to home office. Approximately 80% of large enterprises managed to make the switch. The rate stands at 55% in the case of medium-sized companies, and 51% at small businesses.

Most companies were caught off-guard by the coronavirus outbreak. Only one-fifth of the businesses had emergency scenarios for a major crisis like the current one. A further 34% say that planning is underway, 15% are considering making a plan, while 29% are not interested in planning.

BKIK PR and Marketing director Gabriella Szányi says, "The majority of the surveyed, meaning 60%, experienced a decrease in orders, while 40% experienced a drop in guests, customers, consumers, and clients. A quarter of businesses reported a change in working conditions and a lack of personal consultation, while 22% reported a change in work processes. 21% of respondents were confronted with the fact that the business they are supplying has reduced or is expected to reduce their order backlog. "

BKIK also asked entrepreneurs what help they would consider useful in the current situation. Some 40% of firms would support the creation of a fund that would provide low-interest loans to deal with temporary liquidity disruptions in crisis situations in exchange for commitments not to reduce the headcount. This response was most common among micro and small businesses.

The chamber says that it will continue to conduct surveys on a regular basis while the emergency situation persists to provide feedback to the government, and help SMEs prepare and adapt to the rapidly changing conditions.