The world's biggest sporting event kicks off this Thursday (June 12) in São Paulo, Brazil. The 20th edition of the tournament is already Fifa's most controversial, marked by delays, accidents and cost over-runs (read more here).
With almost three million tickets already snatched up, the tournament could be a boon for businesses - especially small ones.
A number of Brazilian entrepreneurs have already prepared products aimed at World Cup fans – everything from themed cupcakes and massage gel, to launching websites to sell fan wear. Research by Brazilian small business agency Sebrae revealed 929 business opportunities for entrepreneurs in the 12 host cities.
The agency also estimates that small and micro enterprises will generate sales of R$500m from the hosting of the event – in both the preparations and during the event itself.
But will the tournament really be a boost to small firms?
South Africa - not such a hit
Firstly, overall the tournament isn't likely to do much for the ebbing Brazilian economy. In March rating agency Moody’s estimated that the games would generate only an extra 0.4% in gross domestic product (GDP) for Brazil over the next 10 years.
After all, despite 3.1 million spectators having attended the last games (see right), the economic impact wasn't substantial for the 2010 hosts South Africa. It cost $7.3-billion or about six percent of South Africa’s budget at the time. Added to this the government estimated at the time that the tournament would boost the economy by just 0.4% - with most of the growth from the government’s spending on improving infrastructure for the event.
Just like in Brazil at present, many South Africans back in 2010 did take up the opportunity to start a business specifically to benefit from the mega event.
This is shown by the South Africa’s 2010 Global Entrepreneurship Monitor (Gem) report which revealed that the percentage of adult South Africans involved in starting up a new firm jumped from 3.6% in 2009 to 5.1% in 2010, while the rate of new businesses from 2.5 to 3.9%. The 2010 Gem data was collected in May and June of that year.
But a survey for the Western Cape government on the impact of the World Cup on small businesses found that most small firms in the province (including those around the host city of Cape Town) benefited little.
Of the 561 small and micro enterprises interviewed for the survey, nine were established specifically for the World Cup. Just 64 firms hired additional workers specifically for the World Cup, creating 364 jobs in total. Three sectors gained from this event - accommodation, tourism and restaurant and catering.
The survey's authors however noted that some of the businesses' reduced expectations following the event may have been due to the period after the event typically being the quiet winter period.
But they added that for some businesses the expectations diminished since they did not benefit even though they had prepared and invested in their business for the World Cup. Some of them experienced loss and for some their turnover did not change.
But another survey conducted for the Gauteng Tourism Authority found that the majority (40 percent) of residents in the province who undertook some World Cup-related investments made a profit that exceeded their initial expectations, with only four percent incurring some loss on their investments.
Half of the ventures that residents embarked on involved the sale of alcoholic and other beverages while the sale of World Cup related merchandise was the second most common venture at 30 percent.
But a great many failed too. That survey added that taking into account that 50 percent of the business ventures had been started specifically for the World Cup event, that it was not surprising that 37 percent of the ventures had since folded now that the event is over.
The survey pointed out that the biggest losers of the World Cup were small businesses which were dealt a huge blow due to intellectual property restrictions placed on World Cup related products and merchandise. Another barrier for World Cup financial success for SMEs was the lack of affordability of using the Fifa-appointed company that co-ordinated accommodation, MATCH Services.
Business owners in Brazil cautious
Despite all this, there appears to be plenty of help from Sebrae for small businesses preparing for the World Cup, through the agency's Sebrae 2014 programme, which aims to assist business owners to develop ideas for the World Cup – by helping them to put together business plans and by testing the competitiveness of their idea.
Still, many aren't bothering to get ready, with a report in May by SPC Brasil, a credit protection company, and Brazil’s National Confederation of Shopkeepers (CNDL) revealing that 63% of business owners are not preparing for the World Cup.
In the report – in which 600 business owners in seven of the 12 host cities were surveyed – 42% of those small businesses surveyed said there was no necessity to prepare. However 56% said they expected to see an increase in sales during the month-long soccer tournament.
But another study in March conducted by Datafolha on behalf of São Paulo small business association Simpi, revealed that just 47% of those business owners believed that the World Cup would be a positive economic boost. Of these specific business owners, just a third believe it will benefit their business directly.
And the winners are...
In the end the real winners will be Fifa (with its President Sepp Blatter and secretary-general Jerome Valcke, right). In 2010 the soccer organisation netted a revenue of close to $1.3 billion. This year Fifa predicts revenue of almost four times bigger - $4 billion - with most of it expected to come from selling television and marketing rights.
With the recent allegations of dirty deals around the Qatar bid and anger over what many believe to be a World Cup in which the Brazilian government and big business have colluded to benefit from back hands, the mood of many business owners is one of fury when the event is mentioned.
In the end Brazilians will likely retreat to one of the country's many luncheonettes as many are accustomed to after work, to enjoy an ice-cold beer. The banter is likely to settle on one of the many soccer games at play or another topic of conversation - Fifa. One can be sure there be won't be many nice words to be said.
Stephen Timm writes on small business. He is in São Paulo and plans to retreat to the safety of a local bar to watch the games.
Stephen Timm is a