New businesses take a chance in Greece


Small and medium enterprises brave the risks during the economic crisis and show results.

By Andy Dabilis for Southeast European Times in Athens -- 09/12/13


Ioannis Nyktaris invested 550,000 euros in an all-natural ice cream store in Athens. [Andy Dabilis/SETimes]

As Prime Minister Antonis Samaras shuttles the globe in search of big investments to help pull Greece out of its economic crisis, small businesses are reviving hope for an economic upswing.

Ioannis Nyktaris, 39, said he put 550,000 euros into opening an all-natural ice cream store, Fatto a Mano -- Italian for handmade -- in Athens, and said the investment is already paying off.

Open only three months, Nyktaris' ice cream is luring so many customers he has already received five offers to franchise the operation throughout Greece.

"I paid too much money in the middle of a crisis to do this because I believe in it, 100 percent, in my bones," Nyktaris told SETimes.

Nyktaris said to survive in a crisis one has to offer consumers something new and of high quality. At 17 euros a kilo, his ice cream is not inexpensive, but people are willing to pay for it.

"Here it is a philosophy of business. The crisis created an opportunity. People love this product and business is good," he said.

Taking a chance seems to have caught on.

Directly across the street from Nyktaris' ice cream parlour is a recently opened hairdressing salon with a constant stream of customers.

"Some people believe this can be a chance to do something for themselves instead of working for a bank or something like that," Anna Zilakou, communications director at Endeavor Greece, told SETimes.

More than 42,000 new businesses launched last year, according to a study by Endeavor Greece.

The small and medium enterprises make up 97 percent of the businesses in Greece, and employ about 2 million workers, or more than 82 percent of the workforce.

EU's enterprise and industry office reported that there are nearly twice as many small and medium enterprises per 1,000 people in Greece than the rest of region.

"The role of the Greek micro companies is unique in the European context," the office reported, which makes them even more important for Greece to rebound.

Nykataris said, however, too many first-time business owners are afraid to try something different and instead settle for more traditional endeavours, like opening restaurants, cafes and bars. The latter comprised a quarter of all businesses.

Next come apparel, shoe stores, accounting and consulting services, followed by construction companies.

Analysts said obtaining credit has been an issue because banks -- facing loan defaults of up to 42 percent and in need of state recapitalisation -- are reluctant to lend money even if they have capital.

"There is necessary entrepreneurship when waged employment is suffering," Angelos Tsakanikas, director of the Foundation for Economic and Industrial Research in Athens.

Tsakanikas said entrepreneurs usually use their own savings as initial capital and find it is a safer option then facing bank deposit uncertainties or currency risks.

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But Greeks seem reluctant to be entrepreneurs. Only about 4,000 of the new enterprises last year, a tenth of the total, were in production.

Other than firms set up in industry, food processing and tourism services, about 1,185 information and communication companies were opened.

"These, together with enterprises involved in tourism, food production and processing, and high-tech development such as nanotechnology and biotechnology, are just the areas that need development in order to help Greece out of the crisis," Endeavor said.

What kind of small business would you open? Share your opinion in the comments space.

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