Restarting Ukrainian business: challenges and opportunities
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In the second year of a full-scale war, business in Ukraine is slowly recovering from the shock. At the beginning of the invasion, the task was to survive and hold on. Now – to rearrange and develop.
According to experts, it is most difficult for small businesses KSE Graduate Business School. Therefore, on a volunteer basis, they started a project of free consultations for Ukrainian businesses.
Initially launched as an initiative, this program later evolved into a grant project, the implementation of which is supported by the International Organization for Migration (IOM) with funding from the German government through the German Development Bank (KfW).
Experts are ready to share their knowledge, skills and ideas with hundreds of entrepreneurs. They teach how to develop an effective business model, master new areas of activity, work with partners, digitize certain processes, receive development grants.
Currently, the project is in the final phase of implementation, but already today we can talk about its effectiveness and give examples of positive cases. They talk about it in an interview format Oleg Zubchenok, vice president Business Process Management Association ABPMP Ukraine, graduate of the MBA program KSE and teacher of the course “Strategy and Business Processes”, and Valentine dry, head of KSE Graduate Business School, graduate MBA, expert in strategic management and entrepreneurial activity.
What is the target audience of the project?
Oleg: As a rule, representatives of small and medium-sized businesses turn to us for help. 95% are enterprises with up to 50 employees and a financial turnover of approximately UAH 100,000 per month. Although there are those who have up to 1 million hryvnias, i.e., strong middle-class businessmen.
We receive the most applications from Kyiv and the region, Lviv and Rivne regions. Other regions are approximately equally active in percentage terms. What is interesting is that 78% of those who are willing go from submitting an application and filling out a questionnaire to directly further cooperation – we consider this a high result.
What questions do businessmen often ask?
Valentine: At the beginning of the full-scale invasion, there was a wave of relocations, so we helped businesses with that. It was explained that it is necessary to take into account how to prepare, to look for new suppliers and markets.
There is a whole guide on this topic. However, now the emphasis has shifted. Enterprises need help in setting up processes, in consulting.
Oleg: First of all, entrepreneurs are concerned about sales. Someone wants to fix the affected processes, someone wants to take advantage of the opportunity to enter other markets. We show how to take into account the relationship between consumer and producer segments, demand and supply.
The next block of questions is still a business process: instructions, regulations, personnel issues. The last ones are urgent due to the fact that someone serves in the ranks of the Armed Forcesothers left.
We are figuring out how to set up the process of recruiting employees, transferring experience, and professional development. The third most popular topic is receiving grants or other financial assistance. Now there are many different programs for companies. We help you understand them, teach you how to apply correctly.
Our clients are also interested in creating a business model: new ways of generating income, working with partners, changing the vector of activity or additional directions.
Equally important is scaling, entering new markets. For example, the IT segment, which was almost unaffected, is interested in the issues of conducting negotiations and attracting customers.
By the way, scaling is also relevant for the agricultural sector. And this is not only the export of raw materials, but also the processing industry. We cooperate with a number of such companies.
Among them are producers of honey, snacks, sweets, cheeses, furniture, etc. All this is quite an interesting product for export. In addition, there are enterprises that were market oriented Russia and Belarus.
Now they need to reorient themselves, change something in the structure of their products, take into account the requirements of European Union certification, understand logistics and many other nuances.
Another segment that needs expert support is the service sector. For example, the list of our listeners includes owners of small cafes, dental clinics, dance schools, robotics.
They have their own plans for scaling: how to open branches and not lose money. It is important to understand these issues, and we help them.
How important is it to move from old processes to modern ones?
Oleg: Operational management and business processes are my specialty. During the survey, we collect information. Then we analyze it and understand exactly what kind of help the company needs. There are simple and accessible matrices, with the help of which you can get instructions tomorrow, start analyzing and changing the mechanism of your activity in order to be more competitive.
As our experience shows, for many it is enough to implement elementary digitalization – simple service systems that allow you to keep records, a customer base, etc. Small and medium-sized enterprises do not have the time and finances to implement complex lean methodologies, which are aimed at minimizing costs and resources, while at the same time increasing the efficiency and quality of processes and products. They need it quickly, simply and efficiently, so that there is less chaos and risk.
Valentine: Small business owners are people who do everything in their company. They must be understood at every process: production, personnel, logistics, commercial.
If they task us to teach them, we must do it. Show how certain operating systems can work. This greatly simplifies their work, increases efficiency, and increases profits.
What are the current trends in technological innovation? What exactly helps small businesses improve their operations?
Oleg: Basically, this is everything related to customer experience management and interaction with customers. Various chatbots are the most common. Many businesses, especially small ones, trade through social networks.
And in most cases, this process is not automated. They are forced to spend a lot of resources on communicating with customers instead of doing production.
This is a question of certain algorithms, descriptions that would inform the client 24/7 about payment, prices, assortment, delivery. It is necessary to digitize the menu, price list, price list, etc. Most entrepreneurs are still unaware of the existence of project and order management systems.
For many, the question of how to register on the Marketplace is important. We organized several meetings with partners like OLX and other companies, who came and talked about the prospects of cooperation.
Small and medium-sized companies do not have the funds for their online store or the creation of their own website. Therefore, it is a good option for them to digitize the sales process.
We also have companies in the project that need accounting automation. We also help in this direction master
Do small entrepreneurs have enough knowledge to digitize and automate their business?
Oleg: You always need to learn and improve. That is why our project was created in KSE Graduate Business School. Of course, theory needs to be supported by practice. IN in consulting programs, we try to give practical homework between consultations, so that people can figure it out themselves, clarify certain points.
From my own experience, I can say that this form of work and mentoring in practical matters is only beneficial for our listeners.
Valentine: We have knowledge, skills, qualifications, a certain base – all this we can share. Small businesses are probably having a harder time than anyone else right now. This is a kind of our social responsibility – to support those we can, using the knowledge we have.
Business people always go ahead, are not afraid of risks, make bold decisions, create products from scratch. But at the same time, at certain moments they may give up because they did not introduce or update the operating system in time, there is not enough time for administration.
We can help here due to the fact that we know many models, have certain experience, knowledge and enter into interaction with those who are ready to perceive information.
What are the results of the project, is there a profit from the consultations?
Oleg: We want to see progress, so we communicate during three consultations, ask about the state of affairs. Usually, work with a client lasts several months. Two weeks between the first two consultations.
Then we give a certain time to implement the acquired knowledge. About a month and a half. I assure you that we immediately notice the changes, even if the businessman himself has not yet felt them.
The first steps may be insignificant: concluded a profitable deal, increased clientele, entered a new market. However, all this is a real success and the best motivation for me and my colleagues to work further.
Valentine: Of course, we keep in touch with our program participants. We feel responsible for those who went through the full cycle with us.
At the same time, if they need something, our experts are always ready to provide bonus advice.
What are the most interesting cases?
Oleg: The most common areas in which we helped to resolve the situation are personnel, standards, and processes. Due to certain agreements, I cannot name the companies, but only their field of activity.
These are several law firms that have been outsourced; scaling of the school of robotics from Poltava (opens a branch in Kyiv). There was also a Kharkiv enterprise for the manufacture of snacks, which was relocated to Transcarpathia due to the war, and is currently negotiating cooperation with large Ukrainian manufacturers.
There is a cool paint manufacturer that works for export. We put the processes in order with them and discussed the export strategy. And there are many such examples.
What is the future of entrepreneurship in Ukraine?
Valentine:
Everyone who earns, works, creates jobs and pays taxes in these conditions is doing a lot for the country! But at the same time, the world does not stand still.
New products, approaches and solutions are emerging, and for our entrepreneurs this is a double challenge. In addition to the fact that they have to experience the horrors of war and respond to our internal circumstances, they also have to accept the challenges of the external environment, for which they must also be prepared.
It should be understood that our society is integrated into the world economy, and this must be taken into account. If new technologies appear, they cannot be ignored.
Let’s take the same artificial intelligence and its influence on various spheres of human life and activity. The advantages of its use, the knowledge that must be mastered in order to integrate it into your own business – this is one of the examples.
We need to be ready for European integration. For business, this is not only great opportunities, but also new challenges associated with it. That’s why we’re reorganizing right now in order to be competitive on the European market.
From our side, we will be happy to provide consultations for enterprises of any level. You can learn more about projects for small and medium-sized businesses at KSE Business School website.
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