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From IT to private cemeteries. What micro-investments are profitable in Ukraine

Photo: unsplash / Mathieu Stern

Photo: unsplash / Mathieu Stern

The share of small business in the GDP of developed countries is about 60%, in Ukraine it is still no more than 13%. However, it is small business that is especially important for the country and a sustainable economy.

Today a lot of Ukrainians are self-employed. They run not only traditional businesses, but also raise snails, open dog salons and sell antiques. There are a lot of options to make a profit, and therefore The Page has examined what areas of business today are profitable to make micro-investments in our country.

According to the State Statistics Service of Ukraine (Ukrainian abbreviation—Ukrstat), 99% of legal entities and individual entrepreneurs registered in Ukraine belong to small and medium business entities. In the SME sector (medium, small, and micro enterprises), more than 6.9 million people carry on commercial activities, or about 82% of all employed. The sector accounts for 65% of the turnover of goods, jobs, and services.

According to Art. 55 of the Commercial Code of Ukraine, microbusiness in our country is considered to be an enterprise with an annual income of up to 2 million euros and up to 10 employees.

Such entrepreneurs are represented in all sectors of the economy, except for the extraction of oil and gas, metal ores, and salt, as well as some types of processing industries (such as the production of nuclear materials or military equipment). For example, microenterprises today have a large share in wholesale and retail trade, agriculture, transport services, etc.

Micro-investment structure in 2020 (Ukrstat data):

  • agriculture, forestry, and fisheries—12%;
  • wholesale and retail trade—8%;
  • transport and storage facilities—2%;
  • information and telecommunications—2%;
  • industry—1%.

What kind of business do microentrepreneurs run in Ukraine?

The pandemic and quarantines have made e-commerce and courier delivery very popular. After all, people stay at home longer, switch to distance working and have grown accustomed to comfortable door-to-door shipping. Moreover, even large logistics operators who ignored this area are now interested in it.

«Traditionally, an attractive area for micro-investing is the IT industry. It adds 25%—30% annually, and this trend has not changed since 2017. In terms of the export volume of IT services, we confidently rank first in Europe. The industry has also felt the impact of the coronavirus crisis—a lot of work processes have switched to online, and new digital technologies are being introduced. Hence the prospect for the investors. Attention should also be paid to agriculture, also because this summer the land market started working (and the number of transactions has already exceeded 20,000). Actually, all industries producing goods that are always needed by mankind are interesting for micro-investing: pharmaceutical production, extraction, etc.»

Viktor Shevchenko

Viktor Shevchenko

Chairperson of the Export and Investment Support Committee of the Kyiv Chamber of Commerce and Industry, Co-owner of the group of logistics companies ZAMMLER

Chairperson of the Export and Investment Support Committee of the Kyiv Chamber of Commerce and Industry, Co-owner of the group of logistics companies ZAMMLER

In today's world, there are many options for micro-investing: for example, micro-investing applications. Therefore, even inexperienced users invest in securities of major companies. The start here is from $500. There is also the so-called crowdinvesting—a person supports a startup that he or she considers promising and can buy its shares.

Nobody has abolished traditional investment methods either. If the budget allows, you can pay attention to franchises. For example, you can become the owner of a fitness club for $8,000 and of a coffee shop for $6,000. A great advantage of the franchise is that its buyer can work under a major brand, adopting its corporate identity and all the recommendations.

Note that the resources of 100,000 euros will not be sufficient to start a business in cultivating agricultural crops, where a piece of modern equipment costs up to 300,000 euros. But this amount is quite enough to start a business in vegetable growing on an area of up to 100 hectares.

According to Dmitrij Sofyna, CEO at Winstars Technology LLC, micro-investing should start with a budget of $50,000 to $100,000. He believes that promising areas for this in Ukraine are the following:

  • real estate. This area is still a good investment, given that its price is constantly growing. But only commercial real estate and office premises can be considered profitable;
  • land for growing agricultural organic products with subsequent leasing to farmers. There is a growing need in the world to provide the population with food, therefore the need for new land plots will increase;
  • medical institutions with a modern approach to healthcare;
  • educational institutions of the premium segment. High-quality education is always expensive, and the need for it among children will increase;
  • technological simple solutions based on artificial intelligence (medicine, agricultural sector, service sector, business forecasting, etc.) or basic simple mass market programs.

Illia Vyshevetskyi, an attorney at the law firm Investment Service Ukraine, on the contrary, believes that investing in real estate is quite risky in the unpredictable real estate market of Ukraine. "Perhaps insurance of such investments will serve as a security? Yes, this is a good, or maybe the best option for those who invest, but not in construction. Now in the realities of the construction industry, only a small part of insurance companies provide such an insurance service and they work only with a limited number of developers. This stems from the fact that insurance companies are well aware of all potential financial risks for them," the expert points out.

List of micro-businesses in Ukraine

  1. IT services.
  2. PC and laptop maintenance.
  3. Mini food establishments (coffee and ice cream).
  4. Street food in the form of a van (food truck).
  5. Renting wedding and evening dresses.
  6. Microbrewery.
  7. Providing education.
  8. Baking custom-made sweets.
  9. Cheese making.
  10. Helium balloons for festive events.
  11. Cleaning service.
  12. Beauty salon.
  13. Eco-cosmetics production.
  14. Franchise business.
  15. Green tourism.
  16. Car repair.
  17. Bicycle rental.
  18. Tailoring services.
  19. Beekeeping.
  20. Beauty salon for dogs (grooming salon).
  21. Service "husband for an hour".
  22. Aquarium and terrarium maintenance.
  23. Growing herbs for salads.
  24. Raising grape snails for restaurants.
  25. Photo and video equipment rental.
  26. Antique trade.
  27. Car rental.
  28. Guided tours.
  29. Website development, making content for them, and promotion (digital outsourcing).
  30. Pottery.
  31. Diet food.
  32. Handmade goods manufacturing.
  33. Pancake kiosk.
  34. Skin care shop.
  35. Adult paraphernalia store.
  36. Furniture padding.
  37. Lawn laying and landscaping.
  38. Hostel.
  39. Courier service.
  40. Second hand.

What business areas will be promising in Ukraine?

The experts consider the following as interesting for micro-investing: IT-industry, due to the concentration of qualified and talented personnel in Ukraine; processing of agricultural products and export of finished goods. For example, you can make Ukrainian pasta from durum wheat that is no worse than Italian one.

Experts also advise to pay attention to production aimed at energy saving. Ukraine is part of the global economy, therefore the demand for such technologies, means of production, and materials will be constant.

Viktor Shevchenko advises taking a closer look at waste recycling—this business area has long been mastered in the United States and Europe, and isolated examples appear in our country. At the same time, Ukraine is regularly included in the top 10 of the world ranking in terms of accumulated waste. But we recycle a maximum of 8%.

According to the expert, another promising investment is projects of private crematoria and cemeteries, because there is an urgent need for this. So far, there are only three crematoria in Ukraine—in Kyiv, Odesa, and Kharkiv.

But whichever option you choose, always pay attention to the financial model, calculate the return on investment and risks and do not expect super-fast profits.


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