More than 2 million companies closed in 2023 in Brazil | Economy

The Brazilian entrepreneurial potential is enormous – and this is confirmed by the Global Entrepreneurship Monitor (GEM), from Sebrae (Brazilian Support Service for Micro and Small Businesses) in partnership with Anegepe (National Association of Studies in Entrepreneurship and Small Business Management).

According to the report released in April this year, in 2023 alone, the country added 90 million entrepreneurs or potential entrepreneurs. However, in parallel with these data, a less promising scenario is developing: the high number of closed companies.

In Brazil, around 2.1 million companies were closed last year, which gives an average of four businesses closed every minute in the country. The data is from the Federal Government Business Map. This number represents an increase of 25.7% compared to 2022.

According to GEM’s findings, Brazil occupies the second position among the countries with the greatest entrepreneurial potential, second only to India. However, the number of companies that do not sustain themselves and close their activities is a worrying factor.

For Bruno Darolt, CEO and founder of BD Consultoria, this data is a reflection of several factors. “As much as Brazil stands out as the second country with the most potential for entrepreneurs in the world, we still come across many ‘adventurers’ creating businesses and not sustaining their growth.”

Darolt also cites political and economic issues that can affect even more structured businesses, leading them to close due to lack of control over the macro environment.

Factors that can cause a business to close

Also according to data from Mapa de Empresas, the following economic activities closed 2023 with a number of closures exceeding 70% in relation to the number of open companies:

Retail trade of clothing and accessories;
Snack bars, tea houses, juice bars and similar;
Retail trade of general merchandise, with a predominance of food products.

For Darolt, the big “villains” are the lack of training, planning and management. “It is notable that entrepreneurs, when opening their business, often get stuck in the operational routine and forget the most important thing: the strategic management of the business”.

The CEO also highlights the role of training in the scenario of constant changes in the business world. “Training yourself is essential to be able to follow all this development, especially if the entrepreneur works in the digital world”

“In relation to management, it is essential that the entrepreneur is able to implement technologies that can provide data to support him in decision-making moments”, concludes Darolt.