The influence of selected financial factors on the survival of SMEs in V4 countries

Abstract

Small and medium-sized enterprises (SMEs) play a crucial role in the global economy. This article examines SMEs' financial management attitudes in the Visegrad Four countries, aiming to understand how these attitudes impact the firms' long-term sustainability. The empirical study, conducted in June 2022, involved 1,398 respondents, comprising owners or top managers of SMEs from V4 countries. The research explores various facets of the long-term viability of companies over the next five years. Central to the investigation is understanding how managerial comprehension of critical financial management aspects, the willingness to embrace financial risks, and effective risk management contribute to a company's enduring success. Additionally, the study assesses how a positive evaluation of a company's financial performance correlates with its overall longevity in the business landscape. Results indicate that financial management significantly influences SME stability in the medium term. Factors positively affecting SME stability include a proper understanding and management of financial risks, along with a positive assessment of the company's financial activities. Correlation analysis suggests that the perception of business continuity over a 5-year horizon moderately depends on understanding key financial management aspects, accepting financial risks as part of daily operations, and adeptly managing them. A positive vision of V4 SME management regarding their own future emerged as a crucial factor in the study. In conclusion, the article underscores the importance of effective financial management practices, risk comprehension, and positive self-assessment for SMEs to achieve sustained stability in the dynamic business landscape.