“I never have time to think about whether it’s hard to be an entrepreneur”
Vitaly KHOMUTYNNYK, president, Kaskad Industrial-Investment Group (Makiyivka, Donetsk oblast); chairman, Council of Young Entrepreneurs of Ukraine; aged 24, winner in the category, Dynamic Development 2000:
“I began it in 1993, when I launched a private retail venture. The next stages were a food store and a clothing workshop: when I had a kiosk, I dreamed of a store, when I got a store, I set the aim of organizing a production unit. So new reference points and goals kept coming. The first steps, when you are just getting on your feet, are the most difficult. Besides, it is far more difficult to do this now than eight years ago. The explanation is that today’s market has already been divided up among heavyweight entrepreneurs, and it is really tough for a novice to make his way in it. Every sector has this kind of well established companies which have made a name for themselves.
“The legislative field is not the greatest problem now, for many entrepreneurs successfully work precisely in this field. To launch a business of your own, you must first of all have some starting capital and at least small experience in rubbing shoulders with businesspeople. To put it roughly, a young entrepreneur should first go through the cruel mill of the business world and only then open a venture of his own. If you don’t have minimal experience with the competitive struggle, you’d better take your time even if you have start-up capital. Working at a certain firm, for example, can be a good school of business. I try to take on more young people on the grounds that they will realize their potential quicker and they aspire to go further, without stopping at what they’ve achieved. Having mastered one segment of work, they are still more enthusiastic to take up another.
“When I studied business in the West, I noticed that the newly founded companies are at first given a privilege: they are exempt from paying taxes for three years and then pay only a 50% rate for another two years. Thus, in a five-year period, they are given a chance to get to a flying start, mature, and develop successfully. In this country, however, everything is the other way around: as soon as the entrepreneur has bought and not yet sold an item, he has to pay taxes. So the problem is in payment conditions, not tax rates.”
Andriy ARTAZEI, general manager, Atlanta Capital (Kyiv); aged 30; winner in the category, Marketing Strategy of the Year:
“Like many, I started with commerce. Now this is a company dealing in securities. I never have time to think whether it’s hard to be an entrepreneur. Of course, there are some problems, but they are more or less soluble. For instance, I would like to have an easier process of enterprise registration, but still I can’t say this is insurmountable. We are also interested in the fastest possible passage of the Tax Code: in that case there would be no contradictions between the normative instruments, and enterprises would be protected from, to put it mildly, the ‘mistakes’ of inspectors. What also has a negative effect on business development is the lack of civil and land codes (if land were a commodity, this would notably boost monetary relations).
“The conditions for business development will never spring up by themselves; they have to be created. Our company is member of the Ukrainian Association of the Investment Business and the First Stock Trading System, which works with the Association of Financial Market Lawyers. This means there are possibilities to lobby our interests, but they are made use of very inadequately. Yet, the Fund for Legislative Initiatives created by the Ukrainian Association of the Investment Business has recently helped to pass a law on the institutions of joint investment, but now market players have refused to finance this fund.
“Our team is on the average 30 years old, which can be easily explained. The market we are working on is rather a new one, so it has formed its specialists also quite recently, after privatization began in 1992-1993. Accordingly, most of the specialists are young people. Our stock market is still underdeveloped. What distinguishes it from the Western market is its absence of liquidity. Only several participants have it, but even this is still relative, not absolute, liquidity. The absence of liquidity is a glaring indicator of the stock market’s weakness. I don’t consider myself an example to follow: I am not a Soros or Bill Gates. But if I were to give a piece of sound advice, I would simply say: what can bring success in business is good education and active work.”
