Small Businesses Grow with Nation’s Capital

ASTANA – Astana is a growing city and small business are growing with it.

Zhomart Zhantasov, 42, has seen his printing business expand from a four-person team in 2006 to a team of 50 employees working in two shifts. Baspa Optima’s printers work almost non-stop, the owner says, making a variety of products associated with offset printing, including glossy magazines. Asan Barzu, 31, who founded his software development company, Metaphor, in Almaty two years ago, has seen his staff grow to some 20 people in Astana.

A lot of hope has been placed on people like Barzu, Zhantasov and their teams: the Kazakh government hopes small businesses like theirs will make up 40 percent of the nation’s economy by 2020. So far, 840 billion tenge ($5.5 billion) in subsidies to support small businesses has been allocated through the Business Road Map 2020, a plan to boost domestic business that is part of the State Programme of Accelerated Industrial-Innovative Development (SPAIID). In the three years since the start of the road map’s implementation, the number of new private businesses has steadily increased.

Entrepreneurial minds are finding a lot of niches to step into in Kazakhstan’s capital. Head of the Business and Industry Administration of Astana Malika Bekturova announced in June that 165,000 people in the capital area, or 40 percent of the economically active population, work in small and medium businesses and their work represents 50 percent of the gross regional product.

Zhantasov found his niche when he had a need for high quality printing and couldn’t find anything that would fit the bill. “We spent a lot of time, often unsuccessfully, in search of proposals that would meet our needs for price and quality in our city. The nearest one was at least 1,000 kilometres from Astana, which was not very convenient. We thought many people faced this problem,” Zhantasov said.

Baspa Optima has thrived so far. Zhantasov said production is developing steadily and that the team is purchasing new technology, solving new problems and adding to their team. The key to their success, he said, is price, quality and timing. “If you are able to meet these needs of your customer, then you are destined to succeed. But how you meet these needs – that’s where the secrets are. The main one is having an interest in your job.”

Barzu, who is originally from Karaganda, studied in Almaty and first founded Metaphor there. “But most of the orders, most of the potential clients were calling us from Astana. So we had to fly up here for discussions many, many times and we understood that it would be better to position here,” he said.

Barzu decided to give going into business for himself a shot because, he said, “It looked interesting.” He also wanted the freedom to do things his way. “(In your own company) you develop, you implement your solutions as you think is right. When you work for someone else, how to implement the software is very strictly stated. (In your own business) you have more freedom, and we work as a group. It’s not only me, but my friends, and we keep our ideas, our technology, our knowledge together and decide how to go further.”

Both business owners found the process of setting up shop to be simple. “On the issue of business registration, entrepreneurs then and now shouldn’t ever have any problems, in my opinion,” said Zhantasov. “At this point, the procedure has even been simplified by registering through e-government sites.” There are six major steps to opening a business in Kazakhstan, starting with paying the registration fee at the Ministry of Justice, registering legal and tax entities at the public registration centre, getting documents notarised, opening official bank accounts and finally registering for mandatory employee insurance. Through an initial registering process, many of these steps can now be done online.

“I think it was pretty simple,” agreed Barzu. “You go and register your company. It takes no time. And there are many forms of assistance from the government for small businesses in tax payment, in declarations and so on, in paperwork.” He says he anticipates having to spend more time on paperwork and hire more administrative specialists as his business grows, but to start out he didn’t need lawyers or accountants. “There are no obstacles from government or other parties. All you need is to always do a lot of work and try to make good software.”

Setting up might be easy, but simply registering as a company doesn’t guarantee success. The Business Road Map 2020 provides support and guidance for entrepreneurs, but can’t remove all the risk inherent in starting a small business. “(Opening a business) is not always easy, no matter the country,” Zhantasov said. He cautioned eager entrepreneurs to do thorough market research and to build slowly, basing growth on what they know. Barzu has the challenge of operating in a particularly risky field: he said that 70 percent of new IT projects fail, and that having good specialists and a good product is crucial to survival.

Things are going well for Metaphor so far. The company grew slowly and didn’t need any of the financial assistance on offer. “We were moving step by step; first, we were working on small projects, then a bit bigger, a bit bigger.” As for the future, he’s still taking things one step at a time. “What we imagined before is now changing day by day… Our plan is changing, we see where the market is moving and which solutions have more potential and what the market needs. So if two or three years ago we were thinking we’d go in one direction, now we see that web technologies and mobile development is what is actually more in demand.” In the long term, he says he wants to create “one-box,” total solutions for the public. In the meantime, they are gaining experience, learning and making their way toward their ultimate goal, while responding to the shifting needs of their users and trends in the market. “We’re always trying to find good specialists and we’re always enhancing our products.”

To other potential entrepreneurs, Barzu said to go for it. “I think to start an IT business, the important thing is the product you’re going to develop. You should be sure that you can do a good product. That’s the number one thing. If you can make a high-quality product which works well, the other things about creating a business aren’t a problem.”