Since the beginning of the full-scale russian invasion, business in Ukraine has been tested in the form of shelling, relocation of employees, power outages and a decrease in the flow of solvent customers. Given the economic situation in the country, entrepreneurs have been forced to adapt to the labor market, revise their development plans and form new concepts of work within the framework of martial law. Many companies have stopped their activities, moved from the occupied territories to the Center and West of Ukraine, and some citizens have opened businesses in Europe.
According to the official survey by Diya.Business, 45.5% of enterprises plan to increase turnover and increase capacity in 2023 compared to 2022. The first year of the full-scale russian invasion negatively affected the work of Ukrainian companies, but after the adaptation period, owners expect to return to pre-war indicators. Many organizations are opening even in wartime conditions, attracting foreign investment and offering job vacancies for local residents.
What challenges did Ukrainian business face in 2023?
Ukrainian business in the conditions of war has undergone dramatic changes, as not everyone has been able to adapt to the challenges of the new reality in the country. In February-March 2022, 75.3% of companies stopped their work, and in January 2023 this figure was only 8%. The main obstacle to the successful development of the business, its owners consider the insufficient number of solvent clients and the inability to predict the situation on the domestic market of Ukraine. About 40% of entrepreneurs surveyed by the Innovation Development Center indicated the lack of sufficient capital as a factor in the decline in the company's performance.
Business in Ukraine during the war is deprived of support in the form of access to credit at reduced rates, grant programs and tax breaks for new business ideas. Problems with logistics at customs points significantly affect the efficiency of work. About 17.6% of business owners in Ukraine in 2023 note difficulties with booking conscripts: at any moment, entrepreneurs may be left without qualified personnel, which will affect the work of the company. 6–8% of respondents confirmed abuse of power by officials, corruption in the process of issuing permits and licenses, as well as unfounded inspections of the company's activities.
How to operate a business in wartime
Business in Ukraine today operates in conditions of absolute readiness for the most difficult scenario of events. Relocation from combat zones, loss of customers, suppliers and periodic power outages require thoughtful actions and decisions from company owners. Some employees have switched to remote work. Many citizens have moved and resigned, which has created a shortage of qualified personnel and the need to find new employees. The crisis with the power outage forced company owners to look for alternative sources of energy and access to the Internet.
Since the situation in the country is quite unpredictable, entrepreneurs need to develop their own action plan, have sufficient stocks of goods and materials necessary for the further functioning of the business in case of problems with suppliers or logistics. It is worth considering the possibility of investments, participation in government grants, and also accumulate a sum of money as insurance in case of difficult and unexpected circumstances. It is impossible to predict the development of events, but experienced entrepreneurs advise preparing in advance for different scenarios of development of events. In war conditions, according to the owners of large companies, the business that adapts to the situation in time will be able to survive.
It is possible to protect a company from a slump in sales through diversification - expanding the geography of sales and increasing the range of services or products produced. In this way, the company will be able to offer a greater choice to its consumers and stimulate sales growth. Ukrainian businesses should pay attention to the possibility of exporting their own products and entering European markets.
Business support
To support Ukrainians who are engaged in entrepreneurial activities or are just starting their own business, the government has introduced a number of initiatives and projects. For companies that plan to sell their products abroad, a державний каталог експортерів. Потрапити в нього може будь-яка українська компанія, котра має англомовний веб-сайт, відмінну репутацію та не веде торгівельних відносин з Росією чи Білоруссю. Участь в програмі відкриває для підприємства можливість продавати свої товари та послуги за межі країни, масштабувати виробництво та розвивати бізнес.. Участь в програмі відкриває для підприємства можливість продавати свої товари та послуги за межі країни, масштабувати виробництво та розвивати бізнес.
The state initiative for the employment of internally displaced persons provides for compensation to the employer in the amount of 6,700 hryvnias for the first two months of work. To do this, the employee must be officially recognized as a person displaced within the country after the war, and his salary must exceed the minimum in the country (6,700 hryvnias as of 2023).
The government program provides the opportunity to apply for grants for businesses from scratch or existing enterprises. For example, the "Own Business" program is designed for a small company with the creation of one or more jobs. The entrepreneur will receive up to 250 thousand hryvnias for the purchase of equipment, purchase of materials, payment for rent, advertising and other expenses. Companies engaged in the processing of raw materials, the production of furniture, clothing, accessories and other finished goods can apply for a grant of up to 8 million hryvnias, provided that 25 jobs are created.
New businesses in the field of digital technologies and innovations are eligible to apply for a grant of up to UAH 3.5 million. The grant is intended for salary payments, marketing, advertising, new research. The program is under development and aims to increase IT exports and create at least 3 jobs.
Ukrainian business development strategies
For many entrepreneurs, martial law has become a kind of impetus to review the development strategy and scale up business. Many companies that worked in the East have opened branches in the Center in the West of Ukraine, and some even in the EU. Entrepreneurs who have gone abroad use Ukrainian franchises, introducing the European market to quality goods and services. An integral part of the work of a modern entrepreneur in Ukraine has become the analysis of risks and opportunities, the choice of strategic directions of development and the accumulation of capital as a financial reserve.
Businessmen have adapted their goods and services to the reality of martial law, curfew and mobilization. Most companies are participating in fundraising campaigns for the Armed Forces of Ukraine and are actively using their position in advertising and marketing. According to data from Diya.Business, the turnover of Ukrainian enterprises in 2023 is predicted to increase by 10.3%. In particular, the largest jump is expected in the fields of healthcare, social insurance, education and the processing industry.
What business to open in Ukraine in 2023
Despite the realities of life in the country, many citizens who have lost their jobs or are planning their own business are interested in the question of how to open a business in wartime. The most relevant niches for entrepreneurial activity in Ukraine can be considered in the areas of digital technologies, education, food and construction industries. Let's consider several promising business ideas for the Ukrainian market:
- Language learning school.
The need to learn English, both for adults and children, has been felt by citizens with temporary protection status in Europe and North America. A business operating in a foreign market needs employees with knowledge of languages, which guarantees a stable flow of clients. The advantage of opening a school is the ability to organize classes online and work from anywhere in the world without significant investments in the development of your own business. - Digital marketing agency.
A company's own website or social media page is a powerful tool that attracts target audience customers, advertises the company's services and products, and maintains a good reputation. Creating an agency that provides digital content marketing services, SEO, web design, development, and consulting is one of the current business options with a promising future. - Photo studio.
In 2023, the era of high-quality digital content, which directly affects the cost of goods and services, dictates its conditions on the market and creates a free niche for Ukrainian entrepreneurs. A room with several options for decorated locations will allow you to earn money from renting a studio. If you have a photographer in the team and appropriate equipment, you can take orders for subject photography for online stores, catalogs and offline businesses. - Fast food restaurant.
Despite the variety of restaurants in large cities of Ukraine, the demand for quality food will never fall. To stand out from the competition, it is worth offering original recipes, organizing lunch delivery to offices or calculating calories for each dish for supporters of healthy eating. The success of such a business also depends on a competent marketing strategy, advertising and the quality of the products offered.
Social responsibility of business during war
As of 2023, 89.7% of operating enterprises are involved in volunteering and assistance to the Armed Forces of Ukraine and the Territorial Administration, which demonstrates a high level of social responsibility of Ukrainian business owners. Companies support their employees, help with relocation to safe regions of Ukraine or European countries. Most enterprises participate in humanitarian projects, periodically close requests for weapons and ammunition for the military, support initiatives for internally displaced persons and wounded soldiers of the Armed Forces of Ukraine. The main task of business in 2023 is to create new jobs for Ukrainian citizens, support the economy and pay accrued taxes on time. Even under martial law, entrepreneurs fill the budget, develop their own business, ensure their feasible contribution to the country's GDP and demonstrate resilience to today's realities.
