Preparing Polish Micro-Enterprises for the Loss of Liquidity

Purpose: The main objective of the study was to identify, analyse and diagnose the level of liquidity preparedness of Polish micro-entrepreneurs and to determine the structure of liquidity buffers in terms of assets used. Design/Methodology/Approach: The study used literature analysis and critique, a diagnostic survey and statistical methods. The study was based on a questionnaire survey of a randomly selected sample of 105 micro-entrepreneurs, with the qualification of respondents being (a) sole proprietors, (b) sole proprietors providing services in a B2B relationship and (c) microcompanies employing fewer than 10 people. A CAWI survey was used. Findings: The results of the survey show that sole proprietors (SPUs) are more vulnerable to a lack of financial security than entrepreneurs with other forms of business - in fact, 25% of the surveyed SPUs have no financial security at all. The high proportion of SEMs with minimal provisions (up to PLN 10 000) suggests that they are particularly vulnerable to financial problems in a crisis. B2B entrepreneurs providing B2B services as JDGs have lower percentages of no financial security (18.75%) and minimal reserves (6.3%), suggesting they are better prepared for financial distress. Micro companies have the lowest percentage of financial insecurity (19.04%) and a low percentage of provisions of up to PLN 10,000 (9.5%), suggesting better financial management. In general, a larger company organisational structure correlates with better financial security. JDGs are the most exposed to financial risk, while micro companies seem best prepared for unforeseen events. The results suggest that different business forms have different financial management strategies. JDGs prefer liquidity and security, micro-companies stability, and B2Bs as JDGs show more diversification of investments. Practical Implications: The practical business implications mainly relate to the possibility for entrepreneurs to use the results to learn about different options for securing themselves against liquidity loss and to become aware of the need for such security. The implications can also be used by training companies providing services to entrepreneurs to expand their offerings to include training in the use of various financial instruments and assets for corporate financial security. Originality/Value: It was found that those running JDGs do not have sufficient security against liquidity loss in contrast to those running micro companies, who have more resources in this regard. Originality/Value: It was found that those running JDGs do not have sufficient security against liquidity loss in contrast to those running micro companies, who have more resources in this regard.