The founder of the Lioncom event agency Anton Sadykov, in a column for MC Today, talks about the 11-year history of the company, their starting mistakes, several changes of concept, crisis, the war in the East, moving to Kyiv, and finding their niche.
Now Lioncom is a specialized event agency that organizes 32 store openings per week in different parts of Ukraine.
Opening a business
The idea to open my own business came to me at the age of 20. By that time, I had already managed to work a little in several companies of the Dnieper. But along with positive experience, I also encountered glaring injustice.
I worked 100% but the employer delayed the payment of wages for six months.
I decided to create my own company. Starting a business with an orphaned office in an old battered building cost me 15 thousand UAH.
Initially, the agency was involved in organizing the work of promotional staff throughout the country. Our first customer was Procter & Gamble.
We found “promos” – people who handed out leaflets to passers-by, walked with flags near retail outlets, or scattered brochures in mailboxes. At that time, a small team worked at Lioncom, but with the number of projects, it gradually grew.
We won a tender for 2 million UAH, but worked with a client for a week
In 2008, we won the tender with Sandora. Frankly, in one of the points, I had to cheat. The company considered only agencies that worked in Kyiv, so in the line “address” I indicated the Kyiv place of registration.
And we won. The work began and we managed to conduct several promotional activities.
The client liked our approach to the organization of staff and the distribution of leaflets, everyone was happy. But the happiness did not last long. After some time, they stopped working with us because of the unpaid invoice for 180 UAH.
Due to an absurd accident, this sheet of paper fell at the accountant’s desk, and she missed the payment for authorization of promoters at one of the outlets.
As a result, the Sandora delivery vehicle was not allowed to be unloaded. We were accused of being an unreliable contractor. The corporation refused to work with us. The story of our cooperation ended on this, although a week before that we had won a tender for 2 million UAH.
Trying to create a full cycle agency
The company was soon re-qualified as a full-cycle agency. I planned to expand the range of services in order to sell more and, accordingly, earn more.
For example, we offered a service for placing ads in newspapers. But that period is also difficult to call successful. There were mistakes with every eighth publication.
We were engaged in the placement of block ads in the print media for ATB under the opening of new vacancies throughout Ukraine. There were about 300 such newspapers. And with each of them, it was necessary to agree on the layout, color, size, and payment. All information had to be sent on time, with advance payment.
But in reality, everything looked a little different. There was often a lot of confusion which lead to wrong ads, formats, and lack of payments. In addition, for a separate placement for each publication, we prepared guarantee letters and issued invoices for prepayment. We spent a ton of paper on a daily basis. I realized that this could not continue.
We studied all the routine processes. Two weeks at Microsoft Access helped reduce errors from 12% to 1%, and paper from six packages per month to one.
Now all employees received tasks electronically. The program had an automatic check of the color and size of the layout. For example, a layout from a designer was sent to a specific newspaper strictly according to the parameters that were agreed upon.
Around the same time, PrivatBank launched a function for importing payments. Now we uploaded a file with payments to all contractors.
Since the deferral of payments with different newspapers was different, it became much easier in the electronic form to not forget anything and promptly make last-minute payments. We started making most payments at the last moment, reducing the burden on the company’s cash pillow.
Surviving the crisis
In 2009, the economic crisis in the country came, the dollar grew, the company’s turnover fell. We have lost ATB as a customer. Newspaper advertising became irrelevant and it was necessary to look for other sources of income.
Our tasting campaigns began to turn out well — free samples of products in stores with Yubileiny, Yatran, Favorit and others.
During the crisis period, people actively switched from pure meat to sausages, and the market grew rapidly. I even wanted to make the main emphasis on this, and develop this area as a key one. There were so many products that all of our employees at home were simply chock full of different types of sausages.
We no longer knew where to put it, we insistently asked customers to reduce volumes and not to allocate more than 15 kg for one tasting point, which was already more than enough. But they had their own norms: 30 kg, and then distribute it as you want.
In 2010, my wife, Marina Sadykova, came into the business, and two years later we did another reboot. Marina and I found an area of activity that would be of interest to both of us – events.
Previously, we did not even look in this direction, as we thought that the events were limited to weddings, anniversaries, or New Year corporate parties. Lioncom began to organize grand openings and it turned out well and we became the first agency in Ukraine that specializes exclusively in grand openings.
Nobody developed this direction of events before us. It was a modest additional service from advertising agencies or event agencies, the main activities of which were conferences and corporate events.
It all started like this. In May 2012, they called us from ATB, where a tender was held earlier for the organization of grand openings, in which we … lost.
The monologue on the other line was: “Anton, your agency took third place in the tender, but the first two refused to work with us. Four days later, your company should organize an opening in Kharkiv. ”
On Sunday at eight in the morning, we were in Kharkiv and organized a grand opening. By our today’s standards and internal requirements, everything went wrong, although the customer liked it.
We objectively looked like beginners. But we developed and gained experience. By the end of the year, 122 ATB stores were opened in 15 regions of the country. And if after the first project we barely reached profitability of up to 7%, by the end of the year, by optimizing resources and labor, this figure increased six times.
At that time, the cost of opening one store was approximately $1,700. So, from the opening of the first point, our earnings amounted to $120, and from the 118th – already $500.
I carried out the optimization quite simply. When you are the owner, you must understand in detail each process in order to understand what and whom to entrust.
Initially, four people were required to be present at the opening. But I figured that if all the things (gift fund, designs, speakers, ribbons and other details) were put into a car in an organized manner, then you do not need to spend a lot of time on parsing and installation.
And with the installation on the location, I can quickly cope alone. In the future, I went to most of the projects all by myself and it worked out very well.
Now, due to the practice at the ATB openings, we gained experience and started working with other supermarkets: ECO-Market, Brusnichka, and others.
Russian aggression and the closure of business in the Donbass
Our next stage began with Russian aggression. The Dnieper became a front-line city. The atmosphere of hostilities was constantly in the air. Airplanes often flew over the city, ambulance sirens were heard that drove the wounded, and there were often trains with a load of 200.
This greatly affected the general mood and kept us in constant tension. An “alarming suitcase” was assembled from the staff, we were preparing for a quick evacuation. The market of Eastern Ukraine, where at that time we won the leadership in the segment of events for retail, was closed.
If earlier we worked in the Donetsk, Lugansk, Kharkiv regions, in part of Central Ukraine and the Crimea, now our main customers have stopped developing their stores not only in the ATO zone but also in the neighboring regions.
The declining market was concentrated in Kyiv, which previously occupied us only 5%. Marina and I made a very difficult decision and moved the main office to the capital.
Reluctance to take risks eliminated part of the team, and out of 19 people, four of us remained. We rented a small office in the shopping center Komod and shared one apartment.
A little later, Marina and I were left alone, and for two other colleagues, we rented a separate house. But soon we ran out of money. There were no new projects, conflicts often occurred in the office due to uncertainty about tomorrow. From January to July 2015, we were surviving. But we did it.
Business relocation to Kyiv
Since the second half of 2015, the economy has gone up. Retailers continued to develop outlets and order openings. In 2015, we completed with the mark “160 projects” and a small plus, and already in 2016, we organized 316 events.
In Kyiv, it worked even easier for us than in our native Dnieper. There everyone needed a product at the lowest price, while in Kyiv they valued high-quality goods with the owner’s face.
With the growing number of projects, we shared responsibilities with Marina. My wife took on the most difficult part – project management, and I got to work with the team, strategy, and process optimization. My motivation was simple – for the minimum number of staff to organize the best conditions in the market and increase the efficiency of each employee.
How we threw $5 thousand on Bitrix24
In 2017, we bought a “box” of CRM Bitrix24 and paid $5,000 to refine the functionality. As a result, we received a cropped under-Excel, in which we did not subsequently make any estimates.
The standard functionality and capabilities of the CRM “box” were very suitable for us in terms of simplification and optimization of processes, and the solution itself was much cheaper than analogues. It remained to combine our internal development with the acquisition.
But everything turned out to be not so simple when the partners of Bitrix took up the project. Instead of using the full potential of the system, they began to wind up their code, which simply poorly repeated our system and did not work.
The partner of Bitrix refined all the formulas and solved problems for us, but did not achieve anything after 8 months. Therefore, we continued to use our normal Excel and cleared CRM of all “improvements”.
W took up the improvements on our own and set up business processes, tasks, and other basic functions to fit the needs. This tactic turned out to be more advantageous than engaging third-party developers.
With the full implementation of CRM, the time spent by employees searching for contractors was halved. We transferred all data on contractors to the electronic program.
Now in the card of the company with which we already had a positive experience of cooperation, it is easy to find the necessary data or the cost of the service for the operational calculation of the estimate.
One project manager can have about 30 positions. With the help of the system, it became much easier to close them and not to miss the payment deadlines, check the cost of the details from the contractor for which they worked the previous time.
Also, for the convenience and optimization of working time, Binotel telephony was installed in the Lioncom office. Now any contact from the database can be dialed with one touch.
Successful start in Kyiv and our numbers for today
This year we have already closed 815 projects. Over the entire period of our activity, we have not yet refused a single client.
The main goal of the company is to increase the efficiency of each employee by optimizing processes. One project manager at Lioncom prepares an average of 153 projects per year.
Every month I invest about $4 thousand in the development of the company. This includes promotion in social networks and Google AdWords, support for computer programs and telephony, and the purchase of licensed software. The company paid for itself almost immediately. I did not set high standards; instead, I was always guided only by gradual natural growth.
Our regular customers now include Burn, Foxtrot, Citrus, Watsons, New Balance, MD-Fashion, LC Waikiki, Carlo Pazolini, Golden Age, supermarkets Billa, Ceetrus, and many others.
Five principles that we believe in
Here are five principles that helped us to survive first and then succeed.
- Managers work 24/7. Work does not end when we go outside the office. First of all, the result is important. Therefore, we are always mobile and at any time of the day are able to solve the most difficult question or answer a client’s request.
- There are no impossible tasks. The face of the company is always on the first place, therefore, in the case of force majeure, the fire is extinguished by common forces. For example, at one of the last projects in Odessa, we were very disappointed with a costume for the animator. The hero was in the image of Thor, and his hammer vaguely resembled a hammer for chops. The customer was unhappy. And we had catastrophically little time and there was no way to resolve the issue quickly since the office was in Kyiv. Fortunately, the PR department was quickly connected, and within 40 minutes a huge hammer was delivered to us.
- We want our employees to grow. The company covers 50% of the training that managers choose to improve their skills and personal growth. If a person “has not grown” in a year, then we say goodbye to them.
- We have a transparent internal settlement system. We honestly and openly demonstrate all work processes and open key indicators to employees who are then more easily involved in common goals.
- In order to maintain our reputation with contractors, we pay for their work from our own money, without waiting for the client to finally settle accounts with us. After all, if we experience difficulties in settling with clients, this should not affect contractors.
Based on mc.today