With the creation of nearly 1 million companies, France reached a new record in 2021. And since it is the huge companies or start-ups that make the news, we often forget that most of the creations are related to VSEs/SMEs, representing over 99. % of companies in France! In this article, we have identified 32 key figures and figures
Definition of VSE/SME
In France, there are four categories of companies:
- TPE: Very Small Enterprises
- SMEs: Small and Medium Enterprises
- ETI: Intermediate Size Company
- GE: Big Enterprise
These concepts of categories, defined in the decree (N ° 2008-1354) of the application of Article 51 of the Law on the Modernization of the Economy, “make it possible to determine the category of membership of the company for purposes related to the criteria. Statistical and economic analysis”.
To determine the category in which a company is located, various parameters are used: workforce, turnover and balance sheet total. For a more clear view, below is a summary table:
| TPE | SME | iti | GE | |
|---|---|---|---|---|
| Number of Employees | < 10 | < 250 | < 5000 | > 5000 |
| business | < €2 million | < €50 million | < €1.5 billion | > €1.5 billion |
| Total assets | < €2 million | < €43 million | < €2 billion | > €2 billion |
Thus, a VSE/SME is a company with less than 250 employees and a turnover of less than EUR 50 million.
Key Statistics on VSE/SMEs
Company formation increased by 17.4% in 2021
Around 996,000 companies were created in 2021 compared to 850,000 in 2021. This is a historical record. This growth is driven by domestic service companies (+30%), financial and insurance activities (+30.6%), information and communication (+25.4%) and transportation and warehousing (+24.9%). This last category in particular includes home delivery, which has exploded with the health crisis.
99.9% is the share of VSE/SMEs in France
Unsurprisingly, the majority of companies in France are VSE/SMEs. Of these, 99.9%, majority are VSEs, of which more than 96% are micro enterprises (without employees). SMEs represent 3.8% of the number of companies in France.
49% French employees VSE/SME . work in
In the full-time equivalent, VSEs/SMEs (including micro-enterprises) represent about half the workforce in France. That is to say, one out of two people work for one/his VSE/SME.
VSEs/SMEs represent 36% of the business turnover in France
The turnover of micro enterprises (excluding taxes) represents 14.1% of the national turnover. SMEs account for 22.3%. For them, the weight of large companies and ETIs is 63.6%.
Shops represent 17.6% of legal entities in France
According to INSEE’s 2019 data, there are more than 940,000 companies operating in the business sector (including car repair) in France. Professional, scientific, technical and business support activities are the most important sectors with over 1,000,000 active legal entities (out of a total of 5.35 million).
Profile of VSE/SME Creators
35 years of age is the average age of founders of a sole proprietorship.
Since 2010, business builders have been rapidly getting younger, even though there has been a recession in recent years. In 2021, the average age of founders of a sole proprietorship is 35 years old. Another interesting piece of information, 40% of sole proprietorship producers are under the age of 30.
4 out of 10 founders of sole proprietorship are women
In 2021, 41% of sole proprietorships were formed by women. The share of women in business creation has increased significantly over the past 30 years (29% in 1987 and 33% in 2000), but this growth has slowed since 2015.
54% of creators of micro enterprises do not have diploma or CAP/BEP/BAC level studies
Looking at business creation only (excluding micro enterprises), this figure has come down to 44%. So business creators (except micro-enterprises) are more qualified than micro-enterprise creators.
In 2 out of 3 cases, the formation of the company is started by the same person
Thus, we can say that entrepreneurship is often a solitary process. 68% of businesses are set up by one person, 22% by two people and 10% by three or more people.
The main motivation to start a business is to be your own boss
According to INSEE, 57.5% of business creators are primarily set to become more independent. In second place (39.9%) comes the willingness to take on new challenges and in third place (21.1%) comes the desire to increase their income.
Financing of VSEs/SMEs
20% of business creators start with less than 1,000 euros
According to the 2018 SINE (INSEE) survey, 20% of companies are manufacturers and sole proprietorships (excluding micro) start with less than €1,000. On the other hand, 9% start with over €160,000. So there is a huge disparity.
63% of creators have no external funding source
Apart from their personal resources, 63% of creators did not use any other source of funding. A bank loan is the most popular source of external financing with 27% of creators taking a bank loan in the name of the company and 8% in their own name.
39% of business creators have benefited from at least one support system
The most frequently used aid is ACCRE (Aid for Unemployed Creators or Buyers), which benefited 33% of entrepreneurs in 2018. ACCRE is followed by ARCE (Assistance for Acquisition or Manufacturing Business), which is considered by 9% of business builders.
1.27% is the average rate for loans of less than or equal to 1 million euros
As per the OFE (Observatory of Business Financing) report from March 2021, VSEs and SMEs have wider access to cash credit. The effect of state-guaranteed loans (PGEs) led to a sharp increase in the obtaining rate. It was 90% for SMEs and 87% for VSEs in Q4 of 2020 (an average of 76% between 2012 and 2020).
18% VSE-SMEs apply for investment loans every quarter
Between 2012 and 2019, 18% of VSE-SMEs sent such a request for financing to their banks every quarter. This figure fell to 11% in 2020 following the effects of the health crisis.
Sustainability of VSE/SME
Corporations are more durable than sole proprietorships
According to INSEE, companies have a longer life span as compared to sole proprietorships. Indeed, even five years after their creation, 67% of companies are still active, while when we look at traditional individual companies (ie outside the auto-entrepreneur regime), that figure drops to 53%.
44% of VSEs in France are 5 years old or less
VSEs are often young companies. Indeed, in 2018, 44% of VSEs were 5 years or less old, 22% were 6 to 10 years old and 35% were more than 10 years old.
Turnover down 8.4% in 2020
According to the barometer of the Ordre des Experts Comptables, French VSE/SMEs registered a decline of 8.4% in their trading in 2020. The decline is more marked in the CHR sector with a decline of 38.7% for conventional due to the health crisis. catering to hotels and a 44.4% drop.
Retirement is the main reason to sell VSE/SME
According to the Association of Transferors and Buyers of Business (CRA), retirement continues to be the main reason for transfer of VSEs/SMEs with 68% of cases in 2016 so far. This is followed by re-orientation (18%) and health or life change. (14%).
27,285 companies entered receivership or liquidation proceedings in 2021
According to the Banque de France, the annual total level of business failures remained at a very low level with only 27,285 failures in 2021. This is 12.7% less than in 2020 and you would have to go back to 1986 to find such a low figure.
Digitization of VSE/SME
66% of VSEs/SMEs have a website to present their activity
According to the France Num Barometer, 66% of VSEs/SMEs have a website presenting their activity (excluding social networks), compared to 37% in the pre-crisis period.
29% VSEs/SMEs use paid references on the Internet
The number of companies using SEO has almost doubled since the health crisis. In fact, they were 15% before the crisis as against 29% in October 2021.
33% of VSEs/SMEs use professional collaboration tools
The use of collaborative tools increased by 12 points during the health crisis.
Social and environmental commitments are not a priority
The 3 priorities that VSE/SME managers value most are their financial structure (93%), their commercial growth (84%) and the economic health of their service providers and partners (83%). Social and environmental commitments come last (56%).
71% VSE/SMEs consider it necessary to increase their prices
The rise in raw material prices is considered significant by 84% of VSEs/SMEs. Of these 84%, 84% of companies announced that they would attribute this increase to their selling price.
VSE/SME and Environment
250 million for ecological transition of VSEs and SMEs
In 2020, the government introduced financial and technical assistance to encourage companies to move towards an ecological transition. This 250 million euro plan aims to encourage French VSEs and SMEs to reduce their carbon footprint.
VSEs/SMEs less aware than carbon neutrality majors
Indeed, according to a 2021 study by Mazar, achieving carbon neutrality is a priority for 46% of VSEs. For SMEs this figure reaches up to 60%. It is highest among majors and ETIs with 62%.
14**% GHG emissions** comes from French VSE/SME
According to ESEC estimates from 2018, VSE/SMEs are responsible for 12 to 14% of national CO2 emissions (taking into account Regions 2 and 3).
Only 8% of companies with fewer than 20 employees establish an energy balance or a carbon balance
The figure is rising when looking at large companies: 12% for companies with 20 to 49 employees and 18% for companies with 50 to 249 employees, according to a study by Bpifrance Le Lab.
Trends for VSE/SMEs in 2022
3/4 VSEs/SMEs are confident in the future
According to a survey conducted by Cerlce Perspctives in 2022, 79% of VSEs/SMEs are now confident in the future. 73% of them estimate that their 2022 turnover will be greater than or equal to the turnover recorded in 2019.
Social and environmental commitments are not a priority
The 3 priorities that VSE/SME managers value most are their financial structure (93%), their commercial growth (84%) and the economic health of their service providers and partners (83%). Social and environmental commitments come last (56%).
71% VSE/SMEs consider it necessary to increase their prices
The rise in raw material prices is considered significant by 84% of VSEs/SMEs. Of these 84%, 84% of companies announced that they would attribute this increase to their selling price.
questions to ask
What is the stake of VSE/SME in France?
VSE/SMEs represent 99.9% of businesses in France
What are the financing modes for VSE/SME?
Apart from their personal resources, 63% of creators did not use any other source of funding. For others, bank credit is the most commonly used source of external financing.
What is the share of businesses in French companies?
Shops represent 17.6% of businesses in France.