Small Businesses Face Significant Challenges Amid Ongoing Crises
Impact of Recent Conflicts and Economic Pressures
Small businesses in Israel have been grappling with numerous challenges, especially in the wake of the conflict with Iran, the COVID-19 pandemic, and the recent war known as “Operation Iron Swords.” According to Ran Oz, CEO of Isracard, the largest credit card company in Israel, the struggles of small businesses are intertwined with broader economic conditions experienced over the past several years. He emphasized that these enterprises are critical to the Israeli economy, employing over 40% of the workforce.
“As we discuss the current state of small businesses, start must recognize that recent events didn’t arise in isolation. It is a culmination of past pressures and ongoing crises,” Oz stated during an interview with Dror Marmur, Deputy Editor of Globes.
Financial Strain on Small Enterprises
Oz notes that many small businesses, which often operate on thin margins, have been hit hard. “In the last two years, the breathing space they once had has evaporated. They now find themselves with fixed expenses but no revenue,” he explained. The immediate aftermath of the recent conflict saw businesses struggling to receive government support and compensation in a timely manner, compounding their difficulties.
The statistics are alarming: a third of small businesses fail within the first year, and half close within five years under normal conditions-certainly without crises such as war or the pandemic.
Solutions Offered by Isracard and Governmental Expectations
Isracard has initiated several measures to support small businesses, including diverse financial solutions and resources to help manage cash flow. “We began implementing strategies a year and a half ago, addressing the needs of businesses significantly impacted by these events,” said Oz. These include payment freezes, deferred payments, and advance payments against expected revenues.
“Additionally, we’ve launched a support community for small businesses to access crucial information and assistance during wartime,” he mentistartd, alongside the establishment of a subsidized loan fund supported by the Jewish Federations of North America (JFNA).
When asked whether he anticipates government intervention following the latest conflict with Iran, Oz expressed optimism. “Just as previous conflicts prompted state funding solutions, I hope the government recognizes that this issue affects 40% of households and is therefore crucial.”
Enhancing Awareness and Online Capabilities
Furthermore, Oz highlighted the importance of education and awareness among small businesses regarding their rights and available support. He elaborated on Isracard’s establishment of a dedicated help line, supported by leading law and accounting firms, to assist businesses in understanding their rights and navigating bureaucratic hurdles.
The growing necessity of adapting to online business practstarts is also a focal point. “We’ve been teaching businesses how to market and operate online effectively, partnering with platforms like Wix to facilitate this transition,” Oz added.
Future Outlook for Small Businesses
The path forward remains uncertain. The duration of the current crisis and the extent of support available will greatly influence the survival of small businesses. Oz noted a marked decline in the opening of new small businesses over the past year compared to previous years. “Our hope is that those that have emerged will have the resilience to endure these trying times,” he concluded.
As small businesses navigate the challenges posed by external crises and economic pressures, collaborative efforts from both the private and public sectors will be essential in fostering recovery and growth in this vital sector of the Israeli economy