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 The business of survival

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PostSubject: The business of survival   Fri Aug 13, 2010 3:33 pm

[size=55:3dw6hhp9]Sofia echo 13 August 2010

The business of survival


At an age when some people are starting to eye that porch longingly, Iain Greive is an active and busy member of Sofia's business community. As well as being president of the English-language Rotary Club, Iain is a managing partner in two enterprises. The first is a dry-cleaning chain (Excel) with four branches in the capital.* The other is a medical wellness complex – the High Care Centre – in the suburb of Vitosha. High Care offers massages as well as epilation, nutri-care and various other innovative therapies, courtesy of a German franchise for which Iain and his business partner are licensees and national distributors.

Iain is a natural optimist and a hard worker but he is no snake oil salesman. He is refreshingly candid about the challenges involved in setting up and running a business in Bulgaria, particularly during an economic crisis. Times are tough and Iain says he and most expats he knows are finding the going hard, particularly in the so-called quality of life sector.

Rotary Club

Iain first came to Sofia in 2005 on a European project to reform the National Revenue Agency's (NRA) tax department during Bulgaria's run-up to EU accession. When that ended, he worked with KPMG – a global network of professional firms providing audit, tax and advisory services – and was a consultant to Nestle chocolate. Iain is perhaps best known to the expatriate community, however, as the president of the Rotary Club. I remember him as that amusing fellow in the kilt welcoming guests to last year's Burns Night dinner. He even flew in some Scottish bagpipers for the occasion. It should be added that Iain also recently organised a special Austrian-themed evening, something no other club would do – take note out there!

The Rotary Club has longstanding traditions worldwide going back 105 years. During the communist era, however, it was declared illegal in Bulgaria and so the club only re-opened 20 years ago. Iain's is the only English-speaking club in Bulgaria;
perhaps surprisingly, Iain says the largest group is actually Bulgarians wanting to speak English, but the club also has many Belgian, British, Austrian, Greek and American members.

The organisation seeks to forge strong fellowship and business ethics, as well as to propose new initiatives. It also aims to help the community by supporting charities and promoting international goodwill and understanding through assistance to overseas projects. It has several groups for different ages – there are three levels of Rotary membership – Iain is president of the fully fledged adult International Rotary Club for those over the age of 30. Currently, this has 35 members. Although Iain is (please note again) always keen to welcome new members, particularly foreigners, he says that size is by no means the key arbiter of success.

"
Rotary Clubs are not meant to get too big. If you get 100 members, then not everyone can become active. It gets to the point it becomes too unwieldy. About 40 members is probably the ideal size. The club should neither be too big, nor too small. In terms of members, the Rotary Club** is about attracting business people and professionals,"
he says.

Charity work is also an important part of its operations.

"
We have a long-term agreement with the For Our Children Foundation, trying to prevent mothers from abandoning babies and getting children back to their parents. If there's a possibility of a mother abandoning a baby, the hospital phones the charity and social workers are sent out to support them,"
he says. "
We have also promoted fostering – a new concept in Bulgaria."


Starting up

Iain spent 20 years in the UK as a business consultant, working for customs and excise, hence his involvement with the NRA. In 2005, when he first arrived in Sofia, he had no idea that Bulgaria was to become his permanent home."
For the first six months I was travelling between the UK and Bulgaria – I was the director of a consultancy organisation in the UK – but it became unmanageable to have clients in the UK as well, so I decided to stay here and resign from the British firm. I became an independent consultant, working for whomever I chose. Then the financial crisis struck and the European Union suspended funding to Bulgaria. That had a big effect on the consultancy and building market in Sofia."


Many financial consultants simply returned to their countries of origin. So Iain turned towards other business opportunities in Sofia. Bulgarian help in setting up a business was crucial, he says, in order to grapple with the language barrier and sundry obstacles. Hence his business partner in the four shops is Bulgarian. He concedes that the dry-cleaning business in Bulgaria, unlike in the UK where shops adorn every high street, has never exactly been a boom market.

"
You have to accept that the wealth factor isn't here and that the market is relatively small,"
he says. "
My partner was renting some dry-cleaning shops just before the crisis. The rent kept increasing and it became untenable because when you buy equipment you pay the same as in other countries. But then you charge customers a lot less. It takes longer to get a return on investment in Bulgaria. We simply can't charge the same as elsewhere for the services we deliver."


Iain almost invested in a professional carpet-cleaning operation but, again, such a service seems to pass most Bulgarians by. "
Bulgarians tend to clean their carpets in the car wash. In fact, car washes do more business cleaning carpets than cars,"
says Iain with a laugh.

Iain admits that his medical wellness business is currently fairly quiet.

"
The quality of life sector is really about survival right now – there's no point lying about that – and we have to reduce costs. One of the problems of cutting costs is that the first thing to go is training and marketing, although you get away with it in the short-term,"
he says.

Overcoming obstacles

A common complaint of expats trying to set up a business anywhere overseas is bureaucracy. Bulgaria, it seems, is no exception.

"
You have a procedure of permissions, and before you open your shop you must have all your permissions. We were lucky in that we took over the premises of a dry-cleaning business that was already in place, but the process can take months,"
he says.

Iain bought one of the dry-cleaning shops outright in cash, the others through bank loans.

"
It has not been easy and you have to be very careful. I'd never have a dry-cleaning business in a shopping mall, for example, because you can't buy it. But, on the other hand, interest rates in Bulgaria are very high. I took out a loan in the UK to invest in a shop here. Interest rates are six per cent in the UK, but more like 11 per cent here. I don't know why they are so high."


Another problem is wages. "
I'd like to be able to pay people more but there's a balance that has to be struck,"
he says.

Iain tries to involve his staff in decision-making, leaving day-to-day running to Bulgarians.

Mistakes and shortcomings

The crisis has taken its toll in other ways. Iain admits he misjudged the potential for customers in one respect.

"
Vitosha in 2005 was an up-and-coming area with many flats under construction. It seemed likely there would soon be a large community there. When you scout for locations, you have to ask yourself two questions. Are these apartments all sold? Yes, they were. And then, are they occupied? The answer to the second question turned out to be no. They were bought by investors who then attempted to sell them on. Many are actually empty;
they may be sold, but they are not occupied. It's useful to drive through an area at night to see occupancy levels. Basically, an area I thought would be thriving by now is not."


Iain thinks that the best barometer of elusive "
green shoots"
of recovery in Bulgaria would be an improvement in business in the health sector. Spending on "
non-essential"
services is, after all, a good indicator that people have money in their pocket.

After five years in Bulgaria, Iain is well placed to observe local working practices. He says that the usual complaints – lack of entrepreneurial thinking, resistance to change and outdated working practices – do have a certain basis.

He believes that Bulgaria desperately needs leadership in several areas.

"
There's a huge difference between management and leadership. A manager executes what has been planned. The definition of leadership, on the other hand, is to do what has not been planned or programmed. Leadership and change are synonymous but there is little understanding of this in Bulgaria,"
he says.

Do some Bulgarians wait to be told what to do?

"
Yes, they follow procedures and process because that's what they are expected to do, but they don't challenge it. They don't say 'hang on a minute – is this going to lead to anything?' We need a concept of shared leadership whereby everybody in an organisation can demonstrate some leadership. Of course, international companies like Coca-Cola, Heineken and Nestle are different because they recruit well-educated young Bulgarians and then develop them according to their own practices."


Despite certain reservation and problems posed by the financial crisis, Iain greatly enjoys living in Sofia. Like other expats he comments on the safety of the capital, the absence of anti-social behaviour and the relative cheapness of eating out.

"
I live in Bulgaria through choice. And I really like Sofia – the centre's not too big, you can walk almost anywhere. I generally feel very positive here. You can have a good life here,"
he says.

Apart from his business ventures and his commitments to the Rotary Club, Iain enjoys swimming, walking and running, particularly with the Hash House Harriers – unlike the Rotary Club this is an informal gathering of expats. With fingers in so many pies, it seems unlikely that Iain will be resting on a porch any time soon.

*Excel dry cleaners are based in Vitosha, Ovcha Koupel, Lozenets and Lyulin.

[size=85:3dw6hhp9]** Sofia's Rotary Club meets every Wednesday evening in the Arte Hotel. After the summer recess, the next meeting is on September 1. For further information, contact Iain Greive on 0899363458.

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