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Struggles of Business Owners in Ukraine Amid Colder Winters

IRPIN, Ukraine, February 17 (Reuters) – Nataliia Bilostotska has devoted her entire being to her beauty salon, which has served its community for three years in a commuter town just outside Kyiv. However, as the temperature inside her salon plunged to nearly freezing levels, she recognized it was time to temporarily close her doors.

The Reality of Cold Conditions

"Initially, the girls said, ‘It’s okay. We’ll manage to warm up,’" she reflects. "But then one of my manicure specialists called me, showing how her fingers were stiff and unyielding due to the cold in a video." This situation encapsulates the struggle of many small business owners in Ukraine, who are fighting merely to survive as they endure the coldest and darkest winter in the four-year history of war.

Impact of Airstrikes on Daily Life

The backdrop of frequent Russian airstrikes on Ukraine’s power infrastructure has resulted in extensive outages of critical services such as electricity, heating, and water. In a winter where temperatures have plummeted below minus 20 degrees Celsius (approximately -4 degrees Fahrenheit), the implications have been dire. Many cafes, restaurants, and small enterprises in Kyiv have had to shutter their operations due to the overwhelming financial pressures stemming from this bleak wartime economy. Those businesses that can stay open find themselves heavily reliant on expensive generators, which emit both harmful fumes and intolerable noise.

Rising Costs and Economic Strain

Bilostotska noted that her monthly electricity bill has astonishingly increased by almost fourfold this year, reaching 58,000 hryvnia (around $1,340), in addition to 15,000 hryvnia (approximately $350) for generator fuel and maintenance. "We are not making any profit, and we have no revenue to cover these costs. How are we supposed to sustain this?" she questioned, emphasizing that raising prices is not a viable option, as it would likely deter customers.

According to the Kyiv School of Economics, recent power outages represent the most immediate economic threat to Ukraine. Their warnings indicate that prolonged disruptions could decrease GDP by as much as 2-3%, although the adverse effects might be mitigated if businesses adapt rapidly.

Adverse Predictions for Business Growth

Consequently, Ukraine’s Central Bank has adjusted its growth predictions for this year, cutting them to 1.8% from an earlier estimate of 2% due to the gripping energy crisis.

Impact on Personal Lives

Bilostotska, a mother of two, has resorted to working part-time in an office just to manage the loan payments for her struggling business, which is currently losing up to 40,000 hryvnia ($925) each month. She inaugurated her first nail salon, part of a franchise called G-Bar that boasts numerous locations across Ukraine, in Irpin in 2023—just a year after the expulsion of Russian forces from the area. Opening her second salon in the neighboring town of Bucha occurred last year, mere months before Russian bombardments intensified, plunging cities into darkness for almost the entirety of each day.

Coping Under Harsh Conditions

When her Irpin salon’s temperature fell to 2 degrees Celsius, Bilostotska found electric heaters insufficient to keep the space warm, prompting her to close temporarily. The salon reopened in early February, just as another cold snap hit. On the first day back, clients arrived wearing thick winter coats for nail services, while employees boiled water in a kettle to wash hair amidst a chilly backdrop. One of her customers, 28-year-old lawyer Yuliia Kharchenko, was snug in a hoodie and down jacket during her appointment. "The Russians have yet to grasp that even in the dire circumstances they have imposed on us, it is still preferable to being part of Russia," she remarked, expressing resilience.

Challenges of Operating in a War Economy

Most businesses in Ukraine had already made the necessary adjustments to secure alternative energy sources after previous winters of Russian strikes, according to Nataliia Kolesnichenko, a senior economist at the Centre for Economic Strategies in Kyiv. Despite these efforts, they still face the dual burden of increased costs for generator operation and soaring electricity tariffs, driven by a supply that cannot meet the overwhelming demand.

The Ukrainian energy minister recently stated that power demand currently exceeds supply capacity by about one-third—an improvement from the acute shortages experienced during the extreme cold of January.

Future Uncertainties

Kolesnichenko highlighted that this energy crisis represents yet another obstacle for small businesses, who were already combatting labor shortages and safety concerns related to operations and supply chains. Small-scale enterprises employ nearly half of Ukraine’s workforce, and continued closures could precipitate higher unemployment rates and increased emigration.

Yevhen Klopotenko, a celebrity chef and restaurant owner, shared a cautionary message on Facebook last week, indicating that the months ahead may become increasingly challenging, hinting at potential layoffs: "Things might get even tougher."

Recent data from the National Restaurant Association of Ukraine shows that 60% of businesses regard the energy crisis as a critical threat. The ongoing conflict has already caused several million Ukrainians to flee the country since 2022, many unlikely to return.

The Weight of Ongoing Stress

Bilostotska expressed her lived experience of "permanent stress," derived from the daily battle to keep her business afloat while being constantly on edge about her children’s safety whenever Russian drones fly overhead. "The lingering question is: when will all this end, and what will remain within us after we finally manage to exhale?"

AI legalese decoder: A Ray of Hope

In this challenging environment, tools like AI legalese decoder can provide invaluable assistance to small business owners like Bilostotska. This innovative technology can help streamline understanding of contracts and legal documents, enabling business owners to make informed decisions regarding their operations, financial liabilities, and compliance with obligations during these turbulent times. By minimizing legal confusion, AI legalese decoder empowers entrepreneurs to focus on their core business activities and strategize for better economic resilience in the face of adversity.

(Currency conversion: $1 = 43.2378 hryvnias)

(Additional reporting by Yurii Kovalenko, Daria Smetanko, and Alina Smutko; Editing by Daniel Flynn and Ros Russell)

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