Investment opportunities in BG with 500,000 LEV

Hi just read your post, in what aspect are you looking at "rose oil" as a small scale investment?
Regards dairy/livestock I can say I live next to an established dairy farm, that seem's to run quite successfully, but again this is not something you will achieve on a small scale?
It may well be something to consider though as "Agriculture" is very important in Bulgaria and it seem's that most things grow well here within reason? (Although a lot of villages tend to grow their own produce)
What business knowledge to date do you have, as you may be able to introduce this as a new venture?
Either way I wish you well in your decisions.
Regards Steve.

Dear Steve,

Thanks for your prompt acknowledgement.
I have investments in Used car & used clothes imports.
from Europe & North Americas to UAE.

The used cars are refurbished in outside workshops and
re-exported to Middle East & Africa.

The used clothes are re-sorted locally (again outsourced)
and re-packed for Middle East & Africa.

But I'm not required to engage a large workforce of my own.
My partner and I tend to outsource most activities here.

The only thing which came to my mind, is to create jobs in BG
With at least whatever is within my limited means.

I tend to be sympathetic towards rural employment developments
This could reverse the trend in villages where youth migrates to bigger cities.

I would love to do something on the cultivation side for rose oil.
Alternatively livestock farming and dairy products also benefits rural areas.

I am keen to develop a business venture which may not require my extreme micro management.
So a team of employees could work in coherence and deliver on a common goal.
Where experience blends with youth and contributes towards the economy.

I guess I've let you clearly understand my objectives.

But like I said, I'm open to any idea(s) for business activities,
focusing small town and villages.

Regards
Nadir

Dear Nadir,

To invest in BG is a smart decision. The tax climate is nice having its flat tax rate of 10% and EU open market with VAT of 0% for all exports throughout member states. Keep in mind if you have your business investment plans for designated regions in Bulgaria which have unemployment above the average you can use additional tax benefits resulting in social securities for the employees partially paid by the state.
If you are interested about investing in agriculture business you should be aware of the the possibilities for financing by EU funding. There are a lot of possibilities for financing your agriculture business. A smart way for investment is to have your enterprise oriented towards bio products which have higher market value - dairy products especially.
If you want to have some larger scale of investment you can consider timber business, but in the light of timber sawing and wood building materials, which have good market in the Middle East and Africa. You can't export logs because BG has moratorium for exporting of raw timber, but because of that moratorium the price of logs in domestic market is low and sawing business can be profitable.
Another attractive possibility is developing plant for recycling tires into pyrolysis oil - but investment of such scale will exceed your basic investment, keep in mind that EU funding for producing sustainable energy and ecological solution for waste tires is also available.
You have mentioned rose oil in your post. It is good enterprise but keep in mind that distilleries for rose and lavender oil worked for designated customers which makes hard to find oil on good price if you are not one of these customers. If you have market for rose or lavender its a smart thing to have your own distillery. Keep in mind that such project can also use EU funding.

If you have interest in doing business in Bulgaria I can help with some information and  ideas.

Best regards!
Emanuela

Dear Emanuela,
Thanks for your prompt response.

It is great to have your views on this subject.
And let me benefit as well as others, through this forum.

If possible, please guide me which area of businesses
can generate 50 jobs....Within my investment budget ?
And which region in BG is best suitable for same ?

EU funding, in your opinion can be obtained at the initial stage ?
Or does it require 2-3 years of Operation ? Audited financials etc ?

Bottom line is ....I'm looking for maximum number of ideas
From this forum...and then start narrowing down to fewer options
Based on pros & cons etc etc.

But I cannot stress more on one point
Rural employment.....rural employment ......rural employment !!!

Regards
Nadir
Love BG !

Dear Nadir,

I've just read your post probably could help with some ideas/clarification.

First of all, any investment that you might plan will be viable and therefore generate income and workplaces if it is profitable.
Profitable in Bulgaria means having clients ready to pay for your products, and if your clients are not only in Bulgaria then you will generate more profit.
So first of all, consider running a business that does not limit its sales only within the country.

On the second place, consider  two options - buying an existing business or creating a new one.  Since you already have existing businesses I would recommend studying first the options for selling clothes in Bulgaria or selling and/or refubrishing cars. These two types of business are quite common here and you will have lots of competitors, but you also have the insider knowledge and contacts that can help you to be successful.

Buying an existing business is only feasible if you already have the market for the respective product. E.g. if you can sell rose oil products elsewhere in the world you can buy a rose oil/rose oil production  business here.

Creating a new business is also dependant ot the availability of markets. Of course  you can create a rose oil producing company, you can create a winery, or a cattlebreeding farm, dairy products company, rabbit farm, snail farm, orchard,  bee raising farm .... whatever you decide, but all these will take some time to start delivering product and finally you will need the market for it.

In almost all of these cases you can appy for EU financing. It basically takes 6 to 12 months before applications are processed, evaluated and cotracted. Of course if your project is approved for financing. Then you will normally receive 20  to 50 % of the negotiated amount in advance and the rest after every completed stage of your investment. You will also need some funds for the project preparation and the application process.

My advice is to consider first the market side of the question and after defining your market options to choose the type of investment you woild like to start.

Regs.,

Kristian

Dear Kristiann,

Thanks for your in depth reply.

I understand the profitability point of your analysis.
And advantages in continuation of my current businesses to BG.

BUT I HAVE DEEP INTEREST TO PROMOTE BG
So imports is not an option for me,
Rather I'm keen to focus on developing better products from BG
for BG markets and BEYOND !

Remember that my primary objective is job creation.
I'm not concerned about generating extraordinary returns.
Just enough profits to sustain business for growth & development.

The idea is to employ maximum number of people directly into the business.
Thus I'm not restricting my focus to any particular field of activity.

So kindly let me know, which business, with 500k leva initial investment
purely from my pocket, can generate 50 jobs or more.

Additional EU funding will be helpful! But I'm not dependent on it.

I'd be glad when you consider my basic objectives and then suggest.
Anything, anywhere within BG is acceptable to me
AS LONG AS IT CREATES JOBS, PREFERABLY IN RURAL AREAS.

Regards
Nadir
Love BG !

I am just typing out loud here my input is not of a professional one just simply as an observer.
I notice that furniture "up cycling" is becoming more and more popular, maybe a workshop of hand crafted "up cycled" furniture, soft furnishings, traditional ware's maybe an idea, that you could look into I know that Antiques style on-line stores are proven to be popular.
Also within Bulgaria there is a considerable ex-pat community so a ready made locally sourced and crafted piece of furniture could be purchased from ex-pats who would much prefer real wooden items, oak, pine, iron, leather, or other traditional material's, as an ex-pat you often look to the country of your new home to incorporate some traditional furniture, rather than a modern mdf style timber flat pack.
You could employ a majority of local workforce to hone their skills, the selling market could be brought in via on-line shopping, you could offer delivery services throughout Bulgaria again providing work for driver's.The workshop could also house a smaller display of types of work carried out?
Again this is just a suggestion,I have looked as a buying customer at "Antiques on-line stores" they tend to bring in furniture from local and neighboring countries, being able to buy an item local, restored, and delivered surely would appeal to myself, and no doubt others too, traditional item's I believe are important to maintain.
Kind Regards, Steve.
(I will happily apply as a supervisor to this workshop, as local and ex-pats need to work)

Thanks again Steve.
I appreciate your consistent feedback.

I'm a little confused here ?
Are we talking about made in BG traditional furniture ?
To re re-modeled ? Restored ? Etc etc

If yes, I think it's a good idea.
Possibly you. Can send me some pictures or web links .

Yes wooden side boards, tables, chairs, that are all a little tired or worn that can restored it is not to say they are exactly made originally from Bulgaria but they are solid traditional items not replica's, I'll see if I can find the link for the Bulgarian store, they do not renovate or repair furniture they get items from Belgium, Germany etc and then bring it over it has a rich heritage as solid old furniture.
If they sell as a honest piece of furniture, then a renovated piece surely will be more salable plus it provides the much needed work for local people. I'll post you a private message as it will be a form of advertising on the forum regards the link.
Regards Steve.

o.k. I will suggest some ideas within the fixed frames:

1. rural areas;
2. export orientated;
3. 50 workplaces
4. up to 500 000 lv. investment

possible ideas:

1. europalettes factory:
investment: approx. 150 000 lv.
workplaces: approx: 6
type of business: production
markets: inland and export
EU funds: possible

2. sewing factory
investment: 200 000 +
wprkplaces: 30 - 50
type of business: production/subcontracting
markets: inland + export
EU funds: possible

3. lamb/sheep farm
investment: 150 000
workplaces: 5-6
type: breeding/production
markets: export
EU funds: possible

4. fish farm
investment: 250 000
workplaces: 5 - 10
type: breeding/production
markets: inland + export
EU funds: possible

5. rose oil production
investment: 100 000 +
workplaces: 4-10
type: farming/production
markets: export
EU funds: possible

6. saffron production
investment: 50 - 100 000
workplaces: 5
type: farming/production
markets: export
EU funds: possible

7. charcoal production
investment: 150 - 200 000
workplaces: 6
type: farming
markets: inland + export
EU funds: possible

8. mushroom farm
investment: 150 000
workplaces: 10
type: farming
markets: inland + export
EU funds: possible

9. tourism
investment: 300 000 +
workplaces: 10 +
type: recreation
markets: inland + foreign
EU funds:  possible

10. call centre
investment: 200 000 +
workplaces: 20 +
type: service/outsourcing
markets: foreign
EU funds: NOT possible

11. IT company/Software
investment: 150 000
workplaces: 10
type: software development/outsourcing
markets: export
EU funds:  NOT possible

The last two are not suitable for small villages. Actually in small villages/rural regions you will have problems with trasportation and finding enough qualified people.
On the other hand, salaries are lower and you will receive greater support by the local authorities. Actually IT company is possible to organize in a small village, provided it is close enough to a city.

briefly some ideas,  hope this helps, numbers ofcourse are rough and depend on scale, seasonal workers for most types have to be added

That is a reeeeaaalllyy loooonnnggg list
And these are exactly the kind of areas id like to focus......

I have never been so excited ...
Not since I saw Pamela Anderson first time
Some 20 years ago 

Thanks !

Please guide me further ....

Regards
Nadir
Love BG !

Pamela's a history already
though I was excited too, when I first saw her ... topless 

I do not know what to guide you any more, it is up to you from this moment on.

Thanks mate

I owe you a ton.

Looking at option no.2 looks most promising.
In terms of maximum employment opportunities per se.

How would you define a sewing factory ?

Is it your regular sweatshop kind ?

Or a more traditional outfit with craftsmen/women who produce items representing your cultural arts etc ?

I was thinking about it last couple of hours. Actually I was wrong - anyone who intends to open 50 workplaces in my country deserves my full support. So you have it. For free.

About sewing factory, here it is more like craftsmen /actually women/ producing garments, and this is quite often the outsourcing type of business, as far as I know Adidas produces some ot its sports outfits in Bulgaria, so are Rossignol, Hugo Boss, Zara, H&M and several other brands.

I'll check if I can organize a visit to such a factory if you like.

Here are some links:
























L



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Average salary for the sector is approximately 450 euros. Add 30 % for social sequrity, health insurance, etc. Corporate tax is 10 %.
If you organize this in some small town, salary could be lower, but it could be a bit more difficult to find workers, bigger cities  require higher salary, also rent for the factory will be higher.

Dear Krish,

I appreciate your guidance & recognition.
Honestly I'm not looking for a genie to pop out of a bottle and make things happen for me ...In a jiffy !

It's more likely to be a cautious journey where I'd most graciously get leads from sincere people like yourself ...who know the possibilities...And the threats as well.

I have nothing against big corporates who make cheap sweatshops in lesser developed countries. But they seldom care for anything else, except to squeeze out $$$million in profits.

On the other hand my (wild) heart tempts me to aim for an small scale industry where I contribute to generating employment as well as promote Bulgarian DELICACIES, CULTURE, ARTS or CRAFTS etc.

You must think I constantly sound like a thankless mother in law, who is never satisfied 😈 with a good advice.

Regards
Nadir
Love BG !

This might be interesting to you:










Actually this is a South African company (ALC - Automotive Leather Company), that recently opend a plant in a small village near Sofia - Musachevo. The plant produces leather seats for luxury cars - BMW 5/7,
The investment is 4 milion euros and they have opened 500 workplaces. This makes a ratio of 8000 euros per 1 workplace. So if we take this a reference you will need approximately 400 000 euros for 50 workplaces. Roughly.
But my advice is to start with a smaller number and increase it afterwards.

Oh dear

yeah,

but it probably includes construction works

Hmmm...

I thought I should have atleast 35-40% budgeted as 'working capital' from my total investment.
What u say ?

Hi Nadir

I have interests in Bulgaria and hope to move out there in the next couple of years, at the moment I am working on a project that will take me to Dubai (small world isn't it in the next few weeks) maybe if we could have a chat about it sometime,

Surely.

Keep in touch

Not sure. Tell me what exacty you need and I'll find a way to check it.
For example if you plan to hire 50 persons, then you will have 1 manager, 1 storehouse manager, 1 accountant  1 driver and 46 workers. This will probably mean two shifts, and therefore 20 sewing machines, 1-2 cutting and 2-3 other.
Once you know the exact number and type you can calculate the amount of the investment and decide for the percentage of the working capital.
I need to know some precise numbers  in order to be able to check and return adequate feedback.

I guess the (ideal) breakup of my total investment of 500,000 LEV could be as follows. ...

A) Working Capital for 6 months at least 200,000 LEV

B) Government permits and local staff recruitment expenses budget around 20,000 LEV

C) Infrastructure development budget 150,000 LEV

D) Training & (Human) Resource Development 20,000 LEV

E) inventory / raw materials 60,000

F) Misc expense budget 50,000 LEV

I may have overlooked certain points due to lack of knowledge on local Bulgarian business requirements.

If possible please correct me on this.

Regards
Nadir
Love BG !

A. is your decicion
B. Will include fire department inspection and permit, Labour service should be with no charge, Staff recruitment wil be not a significant amount, no government permit up to my knowledge is required, but there could be sth. by the local authorities.
C. Probably here will come expenses for hiring a venue, some renovation, buying machines etc. Depends on the scale, type of machines and the necesary renovation works.
D. Training should normally be less, especially if you hire skilled staff, otherwise you will probably hire 2-3 skilled workers to train the unskilled ones. If you decide to pay some amount for the period they are trained then recalculating on the basis of scale is necessary.
E. Depends on your product and business plan
F. should be less.

Have you started working on a business plan already ? This will determine the majority of your expenses.

Hi Krish

I have just calculated above expenses for a sewing factory employing 50 staff, based on own estimate.

Haven't started working on any business plan per se.

Still waiting for forum feedback ...
if these expenses are logical ? And realistic ?

Before contemplating strategies for other avenues. ...

Hi Nadir,

The figures you've supplied look realistic. ALthough I am not in this kind of business and cannot be precise. My adwise is to start with a business plan and detail all expenditures. You can even consult s.o. who's in this business in Bulgaria or have your business plan drafted here.
I am just wondering whether it is not a better decision to plan a smaller number of workers initially and gradually increase it.
Very important decision is what you plan to produce and where do you plan do sell it ... also for the cost/revenues calculation.

You are right Krish.

The important thing in this equation is the cost benefit analysis.
In terms of which products are sellable readily in local as well as Export market ?

Any suggestions ?

The main reason why I was attracted towards sewing factory
among other options, is due to larger workforce employment chances.
But you are also right to advise that it's better to start off with lesser people and grow later.

Is there a Trade commission or Export promotion bureau in BG, which can further guide us ?

My next visit is planned for coming January.

Regards
Nadir
Love BG !

Hi Nadir,

I can suggest a number of products that have a significant export potential. Whether they are sellable is a question of price and demand on the respective markets and should be duly checked before any significant investment is made!

Some of the products will definately be from textile industry, others from rose-oil production/refining industry if you wish.

My understanding of this is that you have first to secure the markets, which means a trade company, that buys from one place and sells to another place ready products.
And after you have the market for your product to go for an investment and start a production company.

There are several institutions here in Bulgaria, that might be interesting for you:

1. Bulgarian Commerce Chamber - http://www.bcci.bg/
2. Agency of small and medium enterprices - www.sme.government.bg/
3. Local Commerce and industry chambers
4. Export promotion centre at the Ministry of Economy  - I am not sure whether it still exists, will check it

However I doubt if any of these will be of any use. Probably once you've selected a location the local Commerce and Industry chamber will help a bit.

I also remember some ideas of EU funds support on export, will check this too.

Thanks Krish

I shall look up the given websites on government trade bodies.

Possibly NOT what you are thinking of but for rural employment - possibly more than 50 individuals I would consider speaking to the Babas, they have the most outstanding talents in cooking (difficult to market homemade products worldwide licensing etc) and other crafts.     The one item which I consider typically Bulgarian AND marketable worldwide are the extremely practical terlici (knitted slipper socks).  Nearest comparison I can think of in a business world is the cottage industry of Arran jumper production.

If the youngsters see money can be earnt without leaving their vilages it may keep this part of bulgarias heritage alive for longer.

That's very interesting beezone.

Can u fill me up with some details on terlici ?

Regards
Nadir
Love BG !

Probably easier to include a link where you can see the diversity of them   
etsy.com/search?ref=gslsb&q=bulgarian slipper

My neighbour made us some pairs one winter and I find them warmer than double skinned climbing socks.    Because of the Bulgarian custom of taking shoes off, upon entering a home, a collection of assorted sizes is vital for visitors who do not bring their own.    Many cultures have the no outside shoes in house 'rule', these are comfortable, warm and could be marketed in packs of assorted sizes/colours/patterns

Pretty cool

No they are pretty warm, not cool, they are double skinned. 

Hahahha

That's very funny

I knew they are woolen stuff, man
Im not from Mars, u know 

I appreciate the joke, though it is quite a nasty one ......


and also hard to understand by foreigners

kristiann wrote:

I appreciate the joke, though it is quite a nasty one ......


and also hard to understand by foreigners

(Sorry, did not see it as "nasty" it is called Scouse wit, a man with a sense of humor from a city called Liverpool, UK. We do this all the time it is a cultural thing!)

Guys I absolutely enjoy good humour 
it's really a hard to get commodity these days

I'm cool with it really 

Hi Nadir,

Why don't you think about exporting from BG? I think there's big market in that..I relocated to BG from Dubai and i think exporting from here to your region is the best investment