Businessman Florin Andronescu, investor in businesses such as clinic network Sanador, credit broker Kiwi Finance and private insurance broker Sanas, believes Romanian entrepreneurs need to review their entire business strategies and philosophies in order to overcome the crisis.
"The biggest mistake an entrepreneur can make right now, is not taking into consideration the recession outlook, believing things will not be too bad and continuing with the same plans. Entrepreneurs could find themselves in the situation of closing their businesses or selling for a small price," Andronescu told ZF in an interview.
He believes there has always been a worst-case scenario in business, but Romanian managers and businessmen have not taken this into account so far.
In the case of Sanador, he says the worst-case scenario would be a market reduction. Sanador, the main business the entrepreneur invests in, ended 2007 with turnover worth 7m euros, 10% above initial estimates and the target for 2008 has been set at 13.5m euros. "At Sanador, we'll hit the target for this year. For 2009, we haven't drafted a budget. We had a generic increase, but we'll have to have a closer look," said Andronescu.
"As for investment plans, they will have to be adjusted as the financial market is suffering in terms of costs and available liquidity," added Andronescu.
As regards the other two businesses in which he holds stock, Andronescu stated that they are not "especially hurt", maybe just Kiwi Finance on the mortgage side. However, Andronescu is not worried about the international situation and says things will follow a new direction after a two-year interval. "This is not the end of the world. After the correction takes place, we'll see increases again. I have no reason to be worried, because I'm sure a major correction was needed (...),"Andronescu explained.
There's always a level beyond which there can be no more declines, the businessman believes, and in the case of a company valuation, this is represented by the level at which the value equals the level of operating income (1x EBITDA).
According to Andronescu, the whole international situation has been caused by companies' rush for profit; a profit that cannot always reach expected levels.
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