Empowering Small and Medium Businesses in Ukraine: Lessons for North America
The war in Ukraine, started by the Russian assault, has disrupted supply chains, markets, and business operations, creating significant challenges for small and medium-sized enterprises (SMEs) across the country. In response, the Kyiv School of Economics (KSE) has launched a program called RE:empower, RE:locate, RE:start, aimed at providing free consultations and support to Ukrainian SMEs affected by the war. As an MBA student at KSE, I have joined the program to observe and start participating in analysis of the current small business’s dire situations and was impressed by the program’s impact on the entrepreneurship.
The RE:empower, RE:locate, RE:start program was started by KSE alumni in the summer of 2022 as a volunteer project. Now it has grown into a funded initiative that aims to provide at least 100 Ukrainian entrepreneurs with individualized online or phone consultations on how to adapt their businesses to the changing conditions. The initiative is supported by the International Organization for Migration and financed by the German government through the German Development Bank (KfW). Additionally, another program offers advice on export and finding new markets for at least 200 businesses through the Ukrainian Chamber of Commerce and Industry.
The program's approach to empowering SMEs is notable for several reasons. First, it offers customized consulting solutions tailored to the specific needs of each business. Through one-on-one consultations, experts help business owners identify opportunities and challenges, prioritize actions, and establish partnerships. Second, the program takes a holistic approach to business development by supporting all aspects of the business, including supply chain management, marketing, and financing. Third, the program fosters community engagement by encouraging entrepreneurs to connect with one another and share experiences.
The RE:empower, RE:locate, RE:start program offers valuable lessons for SMEs in North America. The program's success demonstrates the importance of agility and adaptability in the face of unexpected challenges. As the COVID-19 pandemic has shown, global events can have a profound impact on businesses of all sizes. By taking a proactive approach and seeking out support, SMEs can navigate uncertain times and emerge stronger on the other side.
This KSE consulting initiative highlights the importance of collaboration and building a community in business development. SMEs in North America can learn from this approach and seek out partnerships with other businesses, industry associations, and government agencies to support their growth and resilience.
Finally, the program underscores the critical role of education and training in SME development. By equipping business owners with the skills and knowledge they need to adapt to changing conditions, the program helps to build a more sustainable and competitive SME sector in Ukraine. North American SMEs can also benefit from investing in their employees' education and training to stay ahead of the curve.
The COVID-19 pandemic has had a devastating impact on small businesses worldwide, and Ukrainian SMEs have been no exception. On top of that, many of them have also had to deal with the destruction caused by the war. However, the KSE consulting initiative is here to provide support and assistance to these businesses. Through consultation and guidance, KSE aims to help Ukrainian SMEs overcome the challenges they face and thrive in the post-pandemic and during-war landscape. The program provides a beacon of hope for small business owners, reassuring them that they are not alone in their struggles and that help is available.
Here are a few success stories of this initiative.
Taras Parandiya, the founder of the company "Smoked Meat from Taras." In June 2020, Forbes Ukraine awarded the company the "Audience Choice" title among small producers in Ukraine. With the start of the COVID-19 pandemic, the business had to relocate to Rivne Oblast and sought consultation from the KSE volunteer consulting program. Taras explains that they relocated because they needed specific equipment, autoclaves, which they did not have in their Kyiv production facility. They also faced uncertainty regarding the supply of raw materials and the recruitment of personnel at that time.
The company also sought to revamp its sales department and pricing proposals, adapt marketing, launch new products and expand exports. The most significant challenge was finding working capital, as their accounts receivable were frozen, and they needed funds to launch their new product.
KSE consultation played a vital role in helping him revamp his marketing strategy and successfully launch a new product amidst the uncertainties caused by the relocation. His participation in the KSE consulting program was key to overcoming the challenges he faced and achieving his business goals.
2. Another successful consulting case was the one of the head of Ukraine Without Waste project, Yevgeniya Aratovska, and her team. They participated in the program to seek advice on communication about their product, scaling, and business collaboration with international partners.
The team wanted to rent an office space for their meetings but was unable to afford it. They also faced the challenge of scaling their business to other safer cities in Ukraine and even to other countries. The team's experience with KSE GBS's experts was positive, and they found external consultations beneficial to gaining a fresh perspective on their business.
One of the most breakthrough pieces of advice they received from the experts was to apply for a grant and build a recycling plant. The team found this surprising as they had only ever considered themselves a waste collection station, but this advice helped them set bigger goals for themselves.
Aratovska's advice to Ukrainian entrepreneurs today is to keep moving forward and not stand still. She believes that Ukrainian businesses have a lot of potential, and they should not be afraid to seek external help and advice to achieve their goals.
3. Creative Depo is a Ukrainian brand that creates merchandise with a slogan that translates to "I Am Ukrainian," which aims to make people feel like superheroes in real life. The founders of the brand, Yuriy Zhaivoronok and Denis Levchenko, recently won the "RE:start" project. During consultations with KSE GBS experts, Creative Depo went through a process of rethinking and restructuring their business. Creative Depo found it very helpful and essential to get feedback from experts who were knowledgeable in business theory and had experience helping various businesses grow. They sought assistance with prioritizing their development plans, identifying gaps, and creating a structure to manage their current activities.
As a result of the KSE consultation, Creative Depo decided to focus on developing their business in Ukraine first, shifting from a B2B to a B2C format. They started selling directly to consumers via Instagram, leveraging their existing content and 150 followers, half of whom were their friends, and the other half were advertising agencies with whom they had worked. Unexpectedly, they found great success in the Ukrainian market, with orders that were too numerous to fulfill promptly, leaving them no time to focus on the European market.
KSE GBS helped Creative Depo restructure their business, prioritize its development plans, and shift to a more profitable market segment. Their success in the Ukrainian market has given them new opportunities to expand their brand and develop new products.
4. Kirill Bodul and Roman Panchenko are co-founders of EatMeat and EatMarket, two companies that provide high-quality meat products to restaurants and meat processing plants, as well as operate a network of specialized stores in the Kyiv and Zhytomyr regions of Ukraine. The founders faced challenges during the conflict in the region, with many of their stores destroyed or looted. However, they were able to quickly rebuild and restore their operations.
The founders sought consultation to stabilize their logistics operations, as the conflict disrupted their supply chain and forced them to operate on a more ad-hoc basis. They also aimed to scale up their business from a regional to a national level, which was a significant challenge. Through consultations with KSE experts, they were able to develop strategies to address these challenges and grow their business.
Overall, the consultation process proved helpful for the founders in identifying areas for improvement and finding solutions to complex business challenges. They were able to apply the insights and recommendations they received to stabilize their operations, improve logistics, and expand their business.
As more Ukrainian small businesses show interest and apply for consultation, the RE:empower, RE:locate, RE:start program became an inspiring example of how business schools, civil society organizations, and government agencies can work together to support SMEs in times of crisis. As SMEs in North America face their own challenges, they can look to the program's approach for inspiration and guidance. By learning from this initiative, all businesses can enhance their agility, collaboration, and resilience, and contribute to building more sustainable and inclusive economies.
Link to the program landing page on KSE website: https://consulting.kse.ua/
The consultations with other businesses are on-going and as more outcomes become available, I will share the case overviews.
