The vast majority of new established enterprises in Kosovo are micro firms employing less than 10 employees. During 2020, 9,805 new enterprises were registered. The graph below represents the number of new registered firms according to the size during 2020.

The majority of the firms (98.8%) were micro enterprises (employing less than 10 employees). Small enterprises (10-49 employees) consist of 1.1%. Whereas, there were only 8 medium-sized enterprises (50-249 employees) and 3 large enterprises (+250 employees) established in 2020, or in total 0.1%.

For many years now, an immense number of studies have evidenced that small and growing businesses are crucial for economic development and prosperity of a country. Even in Kosovo, small businesses are the engine of the economy where most of the workforce is employed. New small businesses typically rely on personal financing sources of the founder, loans from banks, and gifts or loans from friends and family members. Small companies often focus on a niche market with only a few employees and are able to survive by selling a single product or service locally in a very specific market. When customers know the owner and employees, they’re more likely to support the business.

Moreover, they are more able to adapt to market conditions change since they are in constant contact with the customers and can notice changes in preferences. Moreover, small businesses are more willing to take risk compared to large companies. They can test new products with minimal investment without risking to incur in extreme loss.

However, MSMEs in emerging markets, like Kosovo, face some peculiar challenges. Therefore, below we summarize the main points for an MSME in such context:

• Niche market: Small businesses survive not by competing directly with large corporations, but by focusing on market niches that larger firms ignore. In other words, MSMEs should not risk, at least in their initial phase, to enter different markets simultaneously as this can result in missed opportunities to capture an engaged audience. Having said that, MSMEs should carefully evaluate their brand’s place within the market and target a specific clientele. MSMEs can easily become a strong brand for niche markets despite the existence of larger competitors.
• Social media advertising: In emerging markets like Kosovo, it is crucial for small firms to find new channels to sell their products. Kosovo Statistics Agency in 2021 revealed that 1% of households in Kosovo have internet access , higher than EU average (92%). In this sense, the internet provides innumerous alternative channels for founders to grow their sales. Among others, small business owners can benefit by simply opening social media accounts for their businesses where they can promote their products/services and interact with clients. They should monitor closely all their major social media channels and respond to potential clients in a timely manner. Each small company must have a strategy towards digital channels for becoming a strong brand and marketing value. Social media as a marketing habitat and online trade as a sales environment are at MSMEs disposal for a small company having a solid strategy on them.
• Flexibility: MSMEs should learn how to be flexible, especially after the turbulent of period of Covid-19 and war in Ukraine. Moreover, given the bureaucracies in emerging economies, founders should be very pragmatic to ‘get things done’ and be efficient. Flexibility is very important for small business owners since it allows them to be a better listener to their customer base, more adaptable to change, and always ready to anticipate what’s next. Specifically, small businesses should pay close attention to technology and clients feedback as this will keep them ahead of the game.
• Partnerships: Another way to improve small business performance is by fostering partnerships with others small business and increase clients base. Ideally, a partnership should benefit both businesses significantly by combining resources, wisdom or skills in joint projects. For example, an MSMEs could work with a partner to develop a new product, or could host an event that promotes both brands. It is worth to mention potential partnerships with the universities, government and larger companies. Even though it is not easy in Kosovo having such kind of cooperation, it is better to keep in mind that when there is difficulty, there is the opportunity.