The First Steps of Ukrainian Entrepreneurs in 2024

By Viktor Andrukhiv, Co-founder of Fibermix and Savex Minerals

The mood of the business community for 2024 needs to be more stable and stable. While entrepreneurs were largely optimistic in the fall of 2023, according to the latest NBU survey, business sentiment regarding commercial activity has deteriorated.

Does this mean that businesses have given up? I think it signifies that entrepreneurs will discover new tools to confront challenges during turbulent times.

Business expectations plummeted notably due to ongoing hostilities and enemy shelling, uncertainty regarding international aid, costs due to border blockades, a shortage of skilled personnel, and a decline in demand for goods.

From personal experience, I know that the end of 2023 was challenging for entrepreneurs. One of our companies is unstable, and forecasts for the second quarter 2024 aren’t particularly optimistic. However, like many other businessmen, we have no choice but to “keep going”

To weather the storm, entrepreneurs should pay attention to the following steps.

Diversification of Money Is a Key

In times of uncertainty, protecting your funds from currency swings and inflation spikes becomes crucial. It’s smart to spread your investments across different assets: some prefer stocks, others prefer gold. For us, cryptocurrency has caught our eye lately.

Cryptocurrency seems like a solid option, given the potential threat of military actions disrupting physical cash. It’s intangible, which could be advantageous in uncertain times. But remember, choosing a reliable currency is paramount; chasing obscure altcoins isn’t wise, even if they show short-term gains. Dealing with cryptocurrency requires expertise. If you focus solely on safeguarding and diversifying your funds, consider stable options like USDT, which is pegged to the dollar. We stash our cash in euros and dollars, with hryvnias for day-to-day transactions, and some funds are parked in corporate accounts.

Our current portfolio breakdown looks like this:

  • 25% cryptocurrency
  • 25% cash in euros and dollars
  • 50% hryvnias in corporate accounts.

However, it’s essential to adjust your portfolio to adapt to new circumstances. We’re open to increasing our cryptocurrency holdings or exploring other liquid assets.

Diversification isn’t just about profits; it’s also about finding new ways to attract funds. Ukrainian entrepreneurs use  hryvnia loans for business activities. Interest rates are low, and given inflation, they’re practically negligible for businesses. This extra funding can help cover expenses, while profits can be reinvested in assets safeguarding your money.

Venturing into Foreign Markets Could Be a Game-Changer

As for expanding internationally, the Ukrainian market is limited, with many projects on hold. This year, we’re eyeing expansion into new countries and exploring various avenues. Ukrainian businesses aiming for international growth should tap into the expat community from Ukraine and connect with companies that have already made the move.

Entering foreign markets requires preparation, especially in terms of scaling up production. That’s why we invested in new equipment last year and are actively gearing up for the next phase.

Making More Reserves

If a client company exceeds the work schedule and places an unplanned order, it must be prepared by stockpiling goods in advance. For example, we keep a reserve of 100 tons of products. Not being ready to supply additional products to the client can result in financial losses and the loss of the client itself.

The same applies to raw materials. It’s crucial to protect yourself as much as possible from potential losses due to price fluctuations. When the corridor in the Red Sea closed due to Houthi attacks, the price of polymer, which is necessary for our production, increased by 15%. However, we managed to soften this blow because, at the end of last year, our company purchased about 60 tons of raw materials at old prices. This allowed us to raise the cost of finished products for customers gradually.

The formula for success varies for each business and is unique. However, amid constant struggle in military conditions, it has a similar basis. We, as entrepreneurs, continue to resist all factors trying to break us, from shelling to inflation. By adapting, the business becomes stronger. Therefore, with dignity, we will overcome the challenges of 2024.