Business for People
Batumi– a port city on Georgia’s Black Sea coast, is all about summer break and leisure for many Georgians. But for the city residents, summer is the busiest season. No exception is Tika Vetriakova, 29, who runs a small but rapidly growing company Clean World Adjara and provides professional cleaning services to a number of hotels, restaurants and government offices. Blue uniforms of Tika’s cleaners can be spotted at almost all social and public events in Batumi. One of her major clients this summer was Batumi Summer Set, a 3-day electronic music festival.
“It was not an easy start”, says Tika Vetriakova. “Four years ago when I came to business nobody believed that I could succeed with no experience and limited resources. I had to knock on every door to get an order, and quite often I myself had to pick a duster and broom as we did not have enough people.”
- Clean World Adjara has grown from 5 people in 2010 to 190 in 2013, and has become one of the most successful cleaning services in the region.
- 30 local enterprises have been enrolled during last 5 years in the Batumi Incubator.
- 600 long and short term jobs have been created over the last 5 years, a significant result for the Ajara job market.
Struggling through a challenging start-up, Tika discovered that she could receive professional help to run her business. Clean World was among the first companies enrolled with the Batumi Business Incubator which provided Tika and her team with favourable conditions for office space and the assistance in business operation.
The company has grown from 5 people in 2010 to 190 in 2013, and has become one of the most successful cleaning services in Ajara.
“Office rent and services cost us 25 per cent of what we would have to pay in a real business environment. Besides, we learned how to do financial analysis, manage human resources and better market our business,” Tika says. Her company successfully graduated from incubator in a year since the enrolment.
Business has been booming in Batumi for the past several years. Some of the renowned hotel brands have started large infrastructural projects, attracting more and more visitors every year and boosting commercial property prices, often unattainable for the small-scale start-ups.
Unemployment rates in Ajara are among the highest in Georgia – 16.5% vs. 15.0% nationwide (Source: GEOSTAT). Small and medium local businesses are the key for creating jobs and reducing poverty. But they can hardly survive without help in this growing and competitive environment.
The UNDP research of business environment in Ajara shows that 90 percent of the start-up companies close shortly after official registration and that the initial non-refundable expenses (rent, bills and office arrangements) and the lack of business skills are the main hindering obstacle of business development.
“Costs were a real burden for our young company,” says Joni Sabashvili, director of FreshTour, a successful graduate of the Batumi Business Incubator. “I was lucky to get to the incubator as I could direct all my attention to business development. Our company has become a credible touristic enterprise, one out of three in Batumi which gets most of the clients.“
The Batumi Business Incubator offers business support at the most vulnerable cycle – early stage development.
Established in 2009 by UNDP with financial assistance of the governments of Romania, Finland and the Adjara Autonomous Republic, the incubator provides a package of services to help start-up companies survive and grow.
30 local enterprises have been incubated during last 5 years. 11 businesses have graduated and continue their activities outside the incubator. Over 80 percent of the incubated companies settle in business, a high figure, according to the National Business Incubation Association.
“Incubator gives the opportunity to focus more on business, enhance credibility of your company, establish business connections and networks, and learn more about management, finance and marketing. It is a business knowledge centre,“ says Davit Kalandadze, director of the refurbishment company, SanGroup, one out of 10 current tenants of Batumi Incubator.
What Makes Business Tick
“Information is even more valuable for young businesses that low-price rent. We offer them training sessions tailored upon their needs: accountancy, taxes, legal issues, and international trade. Even people who visit Batumi for their holidays attend our sessions. The qualified consultation is always valuable, so they do not want to miss the given opportunity,” says Kakha Shavadze, the Batumi Incubator director.
More than 1500 entrepreneurs attended the consultation and training sessions in the last 15 months. Over 70 companies regularly use training and consulting services provided at the Batumi Incubator.
To meet the mounting demand, BBI management decided to go digital and offers the visitors of their new website video trainings and online business consultation. The website also provides information to job seekers and employers – job announcement service and a database of trained business professionals.
“The Incubator is growing into a number-one service provider that can accelerate business development in Ajara. Along with the assistance to early-stage companies, it’s a source of knowledge, best practices and up-and-coming innovation for local businesses,” says Lasha Komakhidze, UNDP project manager.
At the moment, the government of the Autonomous Adjara is the main net contributor of the incubator, along with UNDP which finances the innovative side of the project. The figures show that for the annual public subsidy provided, BBI graduates and present tenants generate 5 times more in total tax revenue alone.
Over the 5 year period, the companies have created 600 long term and short term workplaces, a significant result for the Ajara job market.
“Behind our assistance stand real companies that create real opportunities,” says Kakha Shavadze.
Business achievements and self-confidence are the measure of success for Tika Vetriakova, Joni Sabashvili and many other young entrepreneurs in Ajara. As they grow beyond the incubator classroom, they see the potential of their region and their part in its future.