Empirical Project: Factors That Affect the Survival of Microbusinesses

In this project we analyze the factors that affect the performance of microbusinesses in Ciudad Autónoma de Buenos Aires (CABA), Argentina. For this purpose, two surveys were conducted with microbusinesses in the food and beverage sector with less than 10 workers. The first survey was conducted in October 2024 to 235 microbusinesses and then a second survey was conducted in November 2024 to 99 microbusinesses that had already been surveyed. To determine which factors affect these microbusinesses we analyze: the age of the stores, the workers, the performance (sales, inventory level, prices and employment), the challenges they face (crime, lack of credit, prices and competition), the reservation wage and their expectations according to the gender, age and education of the owner. We reach four conclusions about microbusinesses. The first one, microbusinesses have difficulties in staying open for more than 3 years. Secondly, the price impact is the biggest challenge for microbusinesses, followed by competition, lack of credit and crime and all of these challenges have a greater impact on the youngest microbusinesses. Thirdly, the inflationary effect has an important impact on sales for this type of business. Lastly, the microbusinesses that have access to credit are those that have proportionally the largest number of workers and the best sales performance.