KSE IOM Consulting Case Study on Family Loofa from Ukraine
Entrepreneur: Volodymyr Zhdanov, the entrepreneur, and owner of Family Loofa (https://familyloofa.com/ ; https://www.facebook.com/FamilyLoofa ; https://www.instagram.com/familyloofa/ )
KSE Consultants (https://consulting.kse.ua/#mom-experts):
Volodymyr Semenikhin (strategic marketing, restructuring, anti-crisis management);
Mykhailo Lutsky (expert in fundraising, grant acquisition, and legal structuring of businesses);
Oleg Zubchenok (project and team management, design of business processes, operations management)
Business size: Micro family business called Family Loofa from Ukraine
Goals:
To expand from small family business to a network of eco-enthusiasts growing loofa and making a profit;
Options for expansion include partnership, franchise, or using own capital
Working with the KSE IOM consulting project to develop a growth strategy
Tools: Strategic Planning (light)
There is a certain breed of individuals who possess an innate ability to identify opportunities and create businesses even in the most challenging of circumstances. Many such individuals in Ukraine, having been displaced from their homes and forced to abandon their enterprises, have displayed remarkable resilience and resourcefulness in establishing new businesses in their new surroundings. Despite their setbacks, these entrepreneurs have refused to be deterred, instead choosing to assess their losses, take stock of their resources, and forge ahead. One such business that exemplifies this spirit of determination and perseverance is Family Loofa, a small business based in Ukraine.
Family Loofa is a small business based in Ukraine that was founded in 2018 by a couple who were inspired by the idea of growing loofah plants and using them to create natural washcloths and sponges. The couple, who are also involved in environmental activism, saw this as a way to contribute to the environment by creating products that are eco-friendly and sustainable. They started with just 50 seeds and grew their business to over 3 acres of land. Volodymyr and his family became record holders of the National Register of Records of Ukraine. They have the largest loofah plantation in Ukraine, which is a first for the country.
The family's passion for environmental activism and sustainability has been a driving force behind their business. They hope that by creating natural loofah products, they can encourage more Ukrainian families to adopt eco-friendly practices in their daily lives. On their website https://familyloofa.com/#produkt Volodymyr sells a manual that he wrote on how to start the loofa business in Ukraine. This Family Loofa farm, has gained significant attention in Ukrainian media, sparking interest in eco-tourism in the region.
However, due to the war in Ukraine, the family was forced to leave their business and relocate to Kyiv for safety. They reached out to the KSE IOM consulting project to help them design a growth strategy and continue to build their business despite the challenges they face. KSE consultants met with the businessman to help him identify their needs and create a plan for future success.
Introductory meeting
The first introductory meetings determine the scope of work required and identify the potential opportunities for consultations.
This was an initial introductory meeting between Volodymyr Zhdanov, and KSE Consultants Volodymyr Semenikhin and Mykhailo Lutsky, during which they discussed Vladimir’s goals and expectations from the KSE consultation.
Zhdanov described his situation, how his farm in Kherson is on the left bank (of Dnipro, the river effectively separating Ukraine into “right”, western, and “left” eastern banks of Ukraine) is currently located on the occupied territory, and he had to leave it behind and relocate to Kyiv. He was forced to relocate to Kyiv, leaving his father behind as well as his farm. Despite this, he remains hopeful that the Ukrainian Military forces will liberate the area and allow him to return. Volodymyr looks forward to not only renewing his loofah operations but also restarting his eco-tourism venture upon his return. However, for now, he is looking at the “plan B”, growing loofah closer to Kyiv, and possibly starting eco-tourism interest here as well.
Consultation 1: Financial Model.
Developing a Financial Model for Effective Loofah Farming Business Growth
During the first consultation, Oleg and Volodymyr discussed the development of a financial model specifically for loofah farming as a business. Volodymyr had shared his vision of expanding his small family business into a network of loofa-growing eco-enthusiasts who could make a decent living while promoting eco-friendly products to replace plastic ones.
However, Volodymyr was vague on the strategy and needed help with developing a financial model to estimate how much capital he would need to expand the business. Oleg, with his experience in business structures and processes, led the process of putting the financial model together. They discussed various ways of expansion, including partnerships and franchises, and evaluated the pros and cons of each option.
They also explored the various factors that must be considered when modeling a potential business, including the cost of land, seeds, labor, equipment, and marketing expenses.
They estimated the expected yield, the selling price per loofah, and the market demand. These estimates will be used to create a projected income statement when discussing cooperation with potential investors or business partners.
The projected income statement showed the expected revenue, cost of goods sold, and operating expenses. This information helped identify the potential profitability of the loofah farming business, which can be used to promote the venture as a profitable and sustainable business in Ukraine. This will be useful for potential loofah farmers who are considering entering the market.
At the end of the consultation, Volodymyr left excited to put the ideas into practice. With the financial model in hand, he had a better idea of how to finance the expansion of his eco-loofa business. The first consultation laid a solid foundation for the upcoming sessions and helped Volodymyr see the potential of his business in a new light.
Consultation 2: Mission Statement and Vision
During the second consultation, Volodymyr discussed with Oleg the challenges he faced in finding enough land to grow his loofah plants in his new location (Kyiv region). However, he had posted an announcement on Facebook seeking partners and received a response from The National University of Life and Environmental Sciences of Ukraine (NUBiP), a leading institution of higher education in Ukraine that focuses on agricultural and environmental sciences. Founded in 1898, the university has a long-standing tradition of providing quality education in the field of agriculture and is recognized both nationally and internationally for its research and academic programs. NUBiP is committed to promoting sustainable agriculture practices and has several initiatives aimed at reducing the environmental impact of agriculture. The university also works closely with the government, industry, and other organizations to develop policies and strategies for sustainable agriculture and environmental management. (https://nubip.edu.ua/).
NUBiP offered him a smaller plot of land to use. Oleg suggested that they design this plot of land as a "showroom" to be used as a social media case study and to showcase the growth process from beginning to harvest. Although Volodymyr was not confident in using social media, Oleg encouraged him to look into it and set a plan on what needs to be recorded and publicized to help promote his business.
They then moved on to discuss the values and mission statement of the business, as well as plans for the next three years. In a country facing an active war, such long-term planning may seem overly optimistic, but Volodymyr is an optimist and Oleg is a business-savvy consultant. They both understood the importance of detailed planning and mitigating contingencies, much like mission planning in battle, as described in the book "Extreme Ownership: How U.S. Navy Seals Lead and Win" by Jocko Willink and Leif Babin. By anticipating potential challenges and having contingency plans in place, Volodymyr’s business could remain agile and adapt to changing circumstances but never seized control. Oleg encouraged Volodymyr to take a proactive approach to business growth, to avoid being caught off guard by unexpected surprises that could hinder his progress.
Together, they put contingency plans in place and discussed various scenarios to ensure that Volodymyr’s business would succeed in the long run. They also planned the steps, spread through the next 3 years. Volodymyr left the consultation feeling energized and confident in his ability to start his operation on the new land and promote eco-friendly practices in Ukraine.
As the second consultation has been wrapped up, we are excited to see the progress that Volodymyr and his eco-loofa business have made with KSE Consulting guidance. With a solid financial model, a clear vision and mission statement, and contingency plans in place, we are confident that Vladimir's business is on the right track for growth and success. We are also eager to continue our work with Volodymyr in the third consultation, where we will discuss the implementation of the growth strategy and further plans for the future. We have no doubt that with the right guidance and hard work, Volodymyr’s business will thrive and contribute to the growth of eco-friendly and sustainable practices in Ukraine. At the present time, Volodymyr was offered more land, found by KSE Consultants, and it seems his vision is set to be coming to life, yet again.
