Ukraine’s entrepreneurs talk about their struggles amid COVID-19 shutdown

Editor’s Note: Ukraine’s businesses are struggling after the country introduced nationwide restrictions on movement and travel starting on March 12. The restrictions have been toughened since then and are set to expire no earlier than April 24, but are likely to last longer. Most businesses are closed with employees working remotely. The exceptions include supermarkets, pharmacies, banks, parcel delivery services. The borders are closed to most forms of traffic, except Ukrainians returning by foot or car. Most domestic transportation is closed or heavily restricted. Estimates range on how deep the ensuing recession will harm Ukraine. The Kyiv Post talked with entrepreneurs about their daily struggles, asking how the quarantine has affected their ventures and what they are planning to do once it’s lifted.

We want to hear your personal story of survival during this national lockdown. Please contact us at [email protected]

Artem  Veselov, owner of restaurant NudeBar and construction company Art Ua

“My restaurant is closed for 2 weeks. We are going through a period of stagnation. Without my capital and current assets working, business won’t exist for even two weeks.

“The entire staff was temporarily sent on vacation, but taxes, salaries and rents are paid — the state mechanism does not work perfectly and it’s hard to get an appropriate document to legally confirm the status of a force majeure (event). All purchased products are completely spoiled.

“We minimize all possible operating expenses. The longer the quarantine lasts, the more the economy dips, the lower the purchasing power, the fewer chances to return to its former pace quickly.

“The most difficult thing is to stay home when each of the areas of activity requires personal participation. This is all that I have and everything that makes a profit. The stronger the drawdown, the more players will leave the market. We simply have no other choice but to go forward and work harder with hope for the best.

“It would be nice (for the government) to remove most of the tax burden, reduce utility bills and so on. That’s all that we expect in this ‘peacetime,’ but this is nothing more than a fantasy in practice. I would like to say that private business is the country’s main source of income-generating GDP. Now is the best time to minimize the entire bureaucracy for entrepreneurs, use this time rationally. Now is the best time to introduce minimal tax fees and duties, which will make it more profitable for businesses to pay taxes and not look for ways to ‘optimize taxation,’ in which case the budget can fill up faster.

“Quarantine is a necessary measure. Let it be stricter but more efficient — and, as a result, shorter. A difficult economic period awaits us after it, and if they need sensible thoughts and ideas, let’s hear small- and medium-sized businesses. They always have something to say and advise.”

Mitya Yatim, co-owner of Malevich Bar, a wine bar in central of Kyiv, and cafe Smart Coffee

“Quarantine has severely affected me and my business. I have lost more than Hr 250,000 ($9,000), and these losses are increasing daily. We do not work at all. We are closed. The plan: If (Ukraine) prolongs the quarantine, I will take out loans to save the business. It’s hard, but I have no other choice.

“I obtained a 50% discount on rent per month. I will be able to hold out for a maximum of 3 months.

“The hardest part was to leave the people who work for me without a job. Also, deciding on whether to continue renting the premises or not. What I have to do is pay off my debt. My friends are helping and showing their faith and support.

“I don’t need anything from the government. If I had a message for the government, it would be: Save small businesses, come up with something, otherwise things will hit rock bottom. Small businesses will not survive and they will die.”

Ievgen Klopotenko, co-owner of “A 100 Years Back in the Future” restaurant, in Kyiv

“It has affected all processes without exceptions. We and the other restaurants cannot work as usual and receive clients. However, we are not the kind who gives up. As a matter of urgency, we developed a new special menu, three new services and launched food delivery. Food can be ordered online or by calling the restaurant number. We cooperate with nearly every delivery service and we have our own couriers too. It is rather simple to order food from us. We have proven our ability to work in such mode; nevertheless, we would really love it if the quarantine ends within the dates indicated by the authorities. These are time-limited measures to motivate that part of the personnel who continued to work and did not take their quarantine vacations.”

“People are the decisive factor in the service industry as they create everything the guest sees and feels in a restaurant. Therefore, it was the hardest decision to let the major part of the personnel take the quarantine vacation. However, there was no choice. We also negotiate the reduction in rent for the premises, and this is an arduous and equally important process.”

“I want to believe that at the end of this April we will be open again and continue working as usual. It is rather difficult to look further for a  longer period.”

“This is quite familiar to me. I am used to acting against all odds. Take, for example, my project to improve the nutrition of school canteens in Ukraine – you just have no idea of what I went through to implement it. Compliance with all sanitary standards, getting approvals from government agencies, resistance from school chefs are just a small piece of what we have been through. This is why my team and I are hardened by the difficulties, and even now, after receiving this “punch to the gut” we have not been in despair for too long. Yes, we worried for a while but then we pulled ourselves together and started acting. This is normal behavior for us.”

“I have already publicly addressed the authorities: the Cabinet of Ministers of Ukraine and the mayor of Kyiv Vitaliy Klitschko, requesting them to introduce a moratorium on rent payment for the restaurant industry during the quarantine. This is exactly what will help the business survive. However, unfortunately, we did not receive any support from the authorities. As for the authorities, I would like to remind them once again that the restaurant industry is linked with a number of other businesses. These are millions of jobs that need to be saved.”

“We urgently need to introduce a moratorium on rent payments for the service industry for the quarantine period. If the authorities regulate this issue at the national level that would be a necessary measure allowing business to survive. This is the most important thing because the industry will not be receiving profit not only during quarantine but also for some time after its lifting. Even after the quarantine is lifted, people will not immediately rush to restaurants. They will need some time to restore their financial stability and return to normal life. Exactly this time can prove crucial for the service industry.”