Volodymyr Slobodonyak and Ilona Gudkova are the co-founders and –owners of “Social Company”, a Social Entrepreneurship (SE) in Chervonohrad, (Lviv Olbast). They gave UCAN an interview following their presentation at an ISC-UCAN Business Breakfast on volunteerism Nov 27, 2007.

“Social Company” makes custom-order gifts and souvenirs with monograms and images printed on key chains, T-shirts, watches, etc. It also operates a small printing house that produces business cards, calendars as well as other items made-to-order. It is the city’s first company founded solely for the purpose of re-directing profits in support of children and young adults with special needs.

The interview below highlights what happens when a business is started by two people from different walks of life: a businessman and a CSO leader. The union, a social entrepreneurship, is one which seems counterintuitive since it competes with the same business one of the co-owners runs. It also describes the advantage and ease with which partnerships are forged in small towns where “everybody knows everybody”.

Ilona Gudkova speaks about the virtues of running a social purpose business to support her civil society organization

Small businessman Volodymyr Slobodnyak initated the establishment of Chervonohrad's first social purpose business

UCAN: When and under what kind of circumstances was “Social Company” established and under whose initiative?
VS: About a year ago I attended a lecture in Kyiv devoted to Social Entrepreneurship. There, different examples were given of the types of SE endeavors practiced throughout Europe. I immediately approached Ilona [upon returning to Chervonohrad] with the idea of starting a company whose profits could be used to support her CSO.
IG: We decided this was the best route since current legislation limits how CSOs could generate revenue and still maintain its non-profit status. I knew nothing about running a business. So we came to the tax authorities and stated our case for starting the company instead of waiting for them to come to us for any given reason. In the end we registered it as a private enterprise last year.

UCAN: So you knew each other before?
VS: Sure, my company Alfa, which also does copy design, runs a small print house to make advertisements, always gave any leftover materials and scraps to Strumochok so the kids could make arts and crafts but the idea of “Social Company” was to use the money from profits to organize events and activities involving the children, plus to donate money to the CSO whenever possible.

UCAN: Aren’t you, after all, competitors in the same business field?
VS: Actually, “Social Company” makes low-end items, and my company Alpha outsources to it, which is a blessing in disguise. It lets us concentrate on more high-end products allowing for my employees to hone their skills and become better professionals. Though we’re in the printing advertising business, we’re in two different [market] segments. Besides, I’m the co-owner of the other company.

UCAN: You mentioned activities and events for children that „Social Company” sponsors, what kind exactly?
IG: You were right to say ‘sponsor’ since Strumochok organizes events involving our children but “Social Company” is mentioned as sponsors whenever they donate money. For example, “Social Company” has sponsored theatrical festivals, concerts, drawing contests, an annual walk-a-thon to raise awareness of children with special needs. The social entrepreneurship also donates whatever it can to the CSO in order for us to continuously engage our children. Our children take part in advertising by handing out promotional leaflets and hanging up posters; they do simple tasks involving folding or gluing things to together.

UCAN: What kind of advertising do you do and do you get any free advertising?
IG: Well, the most effective method of advertising is by word-of-mouth. Since our T-shirts and cups are sold on the local market and in small clothing stores and a souvenir shop throughout the city we easily get free advertising and also many orders this way, especially from commercial structures like Privat Bank. We mostly get free advertising on TV and radio but we also advertise through local bulletins – all of this comes in the form of in-kind donations from local media outlets.

UCAN: What kind of client percentage breakdown would you estimate “Social Company” has?
VS: Across the board 33% commercial business structures, government bodies and institutions like the border guards, police, etc. and private individuals who would like to buy birthday gifts and such or Christmas and New Year’s gifts. Many of our commercial clients are return customers – we expect many orders leading up to the holidays for many New Year’s company parties.

UCAN: And employees? How many full-time and how many interns or volunteers?
IG: Currently, we have six employees with a fixed salary and about 10 volunteers who only help out. But I’d like to add that all of our employees are parents with children that have some type of disability. Many parents with children with disabilities are unable to work since caring for such children is in itself a full-time job.

UCAN: What are your plans for the future? What kind of obstacles do you face?
IG: Legislation regulating business activities is the number one obstacle. But our motto is to never stop, just keep moving forward. As for Strumochok, we want to keep our children occupied, to have society accept them so that they’re not only “consumers” or users of society’s services but who also can contribute in their own small way. We’re currently in the process of operating a daycare center for children with disabilities and special needs.
VS: Right, the most important thing is to have a goal, then money will follow. Naturally, we want to increase the number of orders we get and beef up Strumochok’s statutory fund.