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A big crisis and a very difficult unstable situation in the country, great excitement and uncertainty about what will happen tomorrow. Ukraine is now in a very difficult situation, but despite this, and the problems that our economy is now facing, as well as the real estate market – it is quite realistic to think about buying real estate.

For an ordinary layman, all this, of course, will seem a little strange, but right now is the time when you can buy real estate in our country quite profitably, thereby increasing your funds through investments. First of all, you need to decide in which particular region of Ukraine it is best to make a purchase.

Real estate market trends in Ukraine

Throughout 2021. A fairly stable growth in construction volumes was recorded in Ukraine.

“Compared to 2020, the construction products index increased by 105.1%. Three regions became the leaders in terms of growth in construction: Ternopil, Vinnitsa and Cherkasy, — Deputy Minister of Communities and Territories Development Natalya Kozlovskaya reported on February 21. In general, the volume of construction in the previous year increased the enterprises of 13 regions.

Prices of residential real estate in the primary market during 2021 rose by 25-30%. The most expensive apartments. Which are in new buildings in Kyiv: the approximate price for 1 sq. m. at the very beginning of 2021 was equal to UAH 28 thousand, at the end of the year it had already increased to UAH 35 thousand.

At the beginning of 2022, the price went up even more – from 1.3 to 10%. All this despite the fact that due to constant reports of danger from Russia, demand has fallen sharply in the primary market. Experts explained this by the fact that this is directly related to the increase in the cost of construction.

With the advent of March 2022, the construction of new buildings, as well as real estate sales, were almost completely stopped. After the start of the full-scale military invasion of the Russian Federation, almost all developers notified investors that they would not accept payments related to the purchase of apartments for some time. Fines were completely abolished, but construction was also completely stopped.

From the first day of the war, the State Register of Rights to Real Estate did not work. Therefore, realtors were not able to formalize real estate purchase and sale transactions. They cautioned their buyers against looking for loopholes in the law, making a purchase as a will, etc., as these agreements cannot be legally enforceable.

By May, access to the registries was partially open. The exceptions were the regions in which hostilities continued. At present, the government has determined all the features of the work of notaries, as well as all the necessary restrictions during martial law. Since that moment, only single purchase transactions have been recorded.

How construction resumed in Ukraine during the war

Already in the middle of spring, construction companies resumed their work. Already in May, more than half of all construction projects that were working on February 24 were resumed in Ukraine.

The market, of course, immediately reacted with a large jump in prices, to the gradual return of construction. In May, the prices of all residential complexes in Kyiv were UAH 52.272. Per sq. m. This is 16.2% more than at the beginning of the year. By June, prices had already dropped significantly, and amounted to 46.905 UAH. +4.2% compared to January.

The state of the primary real estate market at the end of 2022

According to the data provided by LUN, in December, on the interactive map “Where housing construction was resumed in Ukraine”, it is reflected that the majority of construction sites are working in Odessa-42, in Kyiv – 85, in Khmelnitsky – 49, in Lviv – 75, and in Ivano-Frankivsk – 40.

Even despite the low demand, prices still continue to rise rapidly compared to the pre-war period. This is most likely due to the increase in the cost of logistics, lack of labor, rising prices for building materials, changes in exchange rates, as well as new laws requiring additional costs from developers.

According to the data of the State Property Fund, in Ukraine, starting from February 24, 4.6 times less real estate was sold when compared with the corresponding period in 2021. The largest share – sale of housing.

What kind of income investors expect in 2023

Investors who invested in the earliest construction of the residential complex at the end of 2021 will receive much less profit in 2023 than expected. Here, the calculation was mainly that prices would rise by 30-35% for the total construction cycle. Even without taking into account the quality of the project, the profit level will not be higher than 20%.

In addition, the level of profit depends on the state initiative to grant the rights of buyers of real estate to investors in the primary market. It’s in entails a tax burden for investors who have not just invested funds to avoid their depreciation, but for categories of professional investors, that is, rentiers. It is this category of investors that acquired approximately 15-20% of the total number of apartments sold by developers in 2021.

Today, the largest number of investors is concentrated in the primary housing market. Investment priorities may slightly change the yield from other segments. First of all, we are talking about service apartments, which are a promising segment of development, as well as investment. At the end of 2021, the return on investment in this segment averaged 10-12% per annum, which gives a very competitive return compared to the primary housing market. This profit can also be constant, in contrast to the “primary” The return on investment reaches 7-20 years.

Which apartments to buy for investment in 2023

The best option for investment, most of all are considered to be comfort- and business-class objects, mostly apartments, which have an area of up to 60 square meters. m. Buyers are always consciously willing to pay extra for the quality of housing or additional amenities, as well as services that are available on the territory of the residential complex. This is due to the closure of most human needs: food, entertainment, shopping, training and education, and many others.

Due to the high saturation of the rental market, many people who buy an apartment to earn money mainly consider all projects in the “home-work-leisure” format. This greatly increases the value of rental housing.

Many people want to buy an apartment in a new house in order to immediately make repairs. Also this year, the request for finishing housing with the help of the developer for an additional fee will also increase.

For several years, developers have been drawing up plans for the first floors to be used for commercial real estate. In 2023, there will be even more such projects.

Investors will remain the same – Ukrainians working in the IT sector, whose income is made up of currency in dollars. In this market, there will also be those investors who have more than 20 years of experience in investing in primary real estate and this is their income. If we take a portrait of a foreign investor, then the leaders here are investors from China and Israel.

Conclusions

In order to fully resume the primary housing market after the victory in the war, it will take at least three years. From this we conclude that 2023 may just become the basis for positive changes in the future

With the outbreak of the war, everyone believed that our economy would almost immediately come to an end. But the expected halving did not happen, but reached only 35%, so everything is not so bad. So if you think that making money in the war is something from the science fiction section, then we are ready to argue with you.

Look at the ground

This recommendation was provided by Sergei Fursa, Deputy Director for Securities Trading at Dragon Capital investment company.

In general, in his commentary, he was quite restrained. Fursa drew attention to the fact that cryptocurrencies have never been an asset for investment.

“And in a crisis, in principle, an important rule is Cash is the King – (from the English “Cash is the king.” – Ed.). If prices have dropped sharply, you can think about agricultural land. And look towards Eurobonds. But only if you have money abroad,” he told Finance.ua.

According to Andrey Usenko, CEO and founder of Your Kolo company, investing in land has several significant advantages over other assets:

• The investor immediately gets ownership of the real estate – no need to wait, this is a real physical asset that you own right away;
• land is an asset that works from the very first day of acquisition, because 95% of Ukraine’s land is cultivated by agricultural companies. You purchase a land plot that already has a lease agreement;
• from 8% per annum – guaranteed rental income for the investor;
• The price of land will increase by 70% in the next 3 years – according to analysts. And as the experience of other countries shows;
• land is a reliable asset, even in the event of hostilities it is quickly returned to a state suitable for processing;
• Agricultural business is less susceptible to crises than any other.

What you need to know about investing in land:

• only citizens of Ukraine can purchase land;
• maximum investment: 100 ha;
• mandatory notarization of the transaction;
• payment is made exclusively in non-cash form;
• notarial verification of the source of funds is required.

Five non-obvious directions

Five areas that are now interesting for investment in the realities in which Ukraine has been living since February 24.

Property

As strange as it may sound, given the permanent threat of rocket attacks, but the real estate market will develop, especially when it comes to the housing sector.

A significant part of the housing stock was destroyed as a result of hostilities, but the state plans to restore it – appropriate programs are being developed.

In addition, damaged infrastructure facilities will also need to be restored.

There are two types of investments here:

• investment in the secondary market, where prices have fallen significantly compared to the pre-war period;
• real investment in the creation of construction enterprises that will renew these objects.

Interestingly, here we can talk about the emergence, among other things, of new forms of interaction “state-private entrepreneur”, which in the post-war reconstruction will lead to the achievement of not only economic and social effects (construction of social housing), but also ensure the implementation of sustainable development goals and opportunities entry into a rather “closed” real estate market of new players.

Of course, such investments today are too risky, but this does not mean at all that there is no investor exposed to such risk.

Logistics

Many logistics facilities were destroyed, but the need for them has not decreased.

Again, if we talk about the post-war reconstruction, the need for a developed logistics chain capable of providing a full cycle of a logistics (especially international) operation will constantly grow.

At the same time, the emphasis in such logistics networks should also shift from classical transport and warehouse logistics to a broader, innovative service provision.

It is clear that such logistics networks will be mainly localized in the relatively safe territories of western Ukraine.

Alternative Energy

Installing, for example, banal solar panels on the roofs of one’s own houses can be considered not only as an opportunity to independently provide electricity or heat a house, but also as an investment with the possibility of obtaining additional profit.

If compared with investments, say, in real estate, then the rate of return / risk of this type of investment is much higher, capital costs are lower + we have personal “bonuses”.

Fintech and Medtech

For Ukraine, this is a new segment, which, at the same time, is developing quite quickly and qualitatively.

Moreover, according to some indicators, it is these segments that are far ahead of European markets.

World practice shows that they However, these segments not only did not “suffer” from the impact of the covid pandemic, but also continued to develop, remaining interesting for global investors.

Online education

Of course, this trend has intensified during the covid pandemic, and, obviously, in the context of hostilities and post-war reconstruction, it will only develop: the main thing is to understand how to choose the “right car” and how to “jump into it”.

Also interesting are investments in sustainable development and financial instruments.

But about traditional investment instruments – stocks, bonds, derivatives, indices, funds, etc. we urge you to be careful, because these markets are still very volatile and especially sensitive to changes in the international financial and investment environment.

US stock market

This, according to the financier, asset manager of 1st Family Office Vasily Matiy, is the best investment option for a long-term investor from Ukraine at the moment.

“This allows you to hedge (limit. – Ed.) currency risks associated with the national payment unit – the hryvnia, which, due to the war, has a tangible threat of devaluation, which we can already observe.

The second is investment in another jurisdiction that ensures the diversification of the investor according to this principle. It is also a liquid asset that can be sold at any time to use these funds,” he explained.

According to Matia, the current correction of the stock market in the region of 20%, on the contrary, is a good opportunity for those investors who have free funds and are thinking of starting to invest.

“The return of funds that copy the US S & P 500 index, which includes the 500 largest US companies, has been about 10% per annum over the past hundred years. For a long-term passive investor, a 20% correction is irrelevant. Indeed, thanks to volatility, that is, fluctuations in the value of assets in price, we can count on a long-term return of 10%. When there is no volatility, it is impossible to count on such profitability,” the expert noted.

However, it is necessary to immediately make a reservation that it is impossible to directly purchase foreign securities in Ukraine, because since May 10, the NBU restrictions have been in effect in the country.

“Calculations abroad for the purpose of buying securities, shares, bonds and paying for brokerage services for these operations, carried out using cards issued by Ukrainian banks, are temporarily prohibited. The corresponding changes are aimed at limiting the unproductive outflow of capital and protecting Ukraine’s international reserves,” the regulator explained his decision.

Therefore, this tool is suitable for those who have funds abroad, or risk circumventing the NBU restriction.

According to the Ministry of Finance website for investors, you can replenish your brokerage account with Freedom Finance by card transfer through Oschadbank (other banks do not carry out such operations).

Accounts with Interactive Brokers and Art Capital will be funded through Wise and Payoneer financial services.

But there is a catch here too: Wise has not issued new digital cards in Ukraine since August 12. Existing ones will work until their expiration date.

Output

All these tips will help you, even at the beginning of the path called “investing”, become a successful investor and make money during the war.

It will soon be a year since the full-scale war of the Russian Federation against Ukraine continues, and the economy of our state, which has switched to a military footing, is feeling the consequences of regular attacks by the aggressor. At the same time, the authorities are actively developing mechanisms for the future recovery of the country after the victory and recreating the conditions for financial stability.

Now, against the backdrop of risks for the economic and financial spheres due to the war, the issue of investing funds and savings has become much more complicated for Ukrainians. Yes, and regarding the expediency of making investments in particular.

The situation on the investment market now

Compared to February, when companies suspended work, the flow of investments into the country decreased and fear gripped all of us, now the situation has improved significantly.

More than 80% of the cities and villages of the country are free from invaders. People continue to live more or less familiar lives. More than 40% of establishments operate from the pre-war number. Entrepreneurs from the occupied places are starting business again, but in other regions of Ukraine. New stores are opening daily, foreign companies are returning, and investors are even more interested in the post-war reconstruction of our country.

This is an indicator that the money works for the owners even during the war. But why is this important for everyone, not just large investors and business owners?

The economic crisis in the country contributes to hryvnia inflation. Recently, the dollar has skyrocketed, which leads to higher prices for foreign goods, fuel, and so on. So that your savings do not depreciate completely, you do not need to keep money in a bank account. Make them work for you and multiply.

Of course, investing is always a risk. Especially in the enterprises of the country in which there is a full-scale war.

5 areas where to invest during the war

• IT companies

Even under martial law, more than 80% of IT companies retained almost 100% of their contracts and showed growth of 13% in three quarters. Despite all the challenges of the war, the IT industry is one of the fastest growing sectors of the Ukrainian economy.

Innovation and technology is one of the industries that investors are primarily interested in within Advantage Ukraine – an initiative to attract investment to Ukraine, which was introduced in September this year with the support of the President of Ukraine.

According to the results of three quarters of 2022, IT enterprises paid UAH 48 billion in taxes. More than half a billion dollars has been directed to support the Armed Forces of Ukraine and the humanitarian sphere. The export of computer services grew by 23% compared to the previous year. Ukrainian IT companies attracted $350 million in investments.

• Property

The payback of commercial real estate is two to three times higher than residential. It is possible to purchase commercial real estate even in the historical center of a Ukrainian city at a discount. So recently in Lviv there was real estate with an area of 1168 m² and at a price 3.5 times lower than before the war.

• Franchises of grocery stores and restaurants

Even with price increases, there will never be a drop in food-related profits. Take a closer look at pastry franchises, small cafes or restaurants.

• Shares, Cryptocurrency

Stocks have long been one of the options for passive income. The current trend is investing in cryptocurrencies and stablecoins, although stablecoins can also fall in price.

An example is the recent crash of Luna i Terra. However, they still remain one of the profitable investment options. The same can be said about cryptocurrency. Therefore, we advise you to take a closer look not only at Bitcoin, but also at Golden Ball, Ethereum, Cult DAO. Recently, they are in the top.

• War bonds

This option is suitable for entrepreneurs with a large fortune, and ordinary citizens of all professions. By purchasing a war bond, you support our Army and receive an interest-bearing payout later.

Briefly about the main rules of investing

1. Don’t rush to make a decision.
2. Don’t invest money you need soon.
3. Have a clear investment horizon.
4. Don’t invest in one company
5. Don’t panic

Conclusions

All this will help you, even at the beginning of the path called “investing”, to become a successful investor and earn money during the war.

Crises are detrimental because they can have extremely negative consequences for a business’s reputation. The immediate results can be the erosion of trust from both potential clients and partners. Often, the situation has either spiraled entirely out of control or is at risk of doing so at any moment.

Most international companies have specific guidelines for responding to particular crisis situations. Generally, in crisis situations, they follow the main principle of “taking actions that will cause the least damage.” We will share with you the purpose of crisis communications in business conflicts.

Why are crisis communications needed in business conflicts?

Problems arising in business are exacerbated by the fact that, in the era of digital technology, it only takes a couple of hours for them to escalate into a loud scandal. Such scandals not only undermine the reputation of those involved in the conflict but also jeopardize their ability to conduct business in the future.

It takes 20 years to build a reputation and five minutes to destroy it. Warren Buffett’s accurate phrase, spoken many years ago, is more relevant today than ever.

An appropriate example is the YARO brand, which produces healthy food products. Its owner posted a humorous photo online depicting the central square of the capital city of an aggressor country. This action provoked a wave of indignation. Even the apologies, which were belated, did not remedy the situation. In the end, many well-known retail networks refused to sell YARO products.

Features of crisis communications

What to do during the first days of a crisis and how to act to prevent potential negative consequences:

• Always be prepared

Most global companies can boast pre-prepared instructions that outline the order of actions in case of unforeseen crisis situations. These instructions are called crisis roadmaps.

These guidelines describe hundreds of possible problematic situations and options for public communication regarding each of them. Moreover, these manuals should be regularly updated to fully correspond to new realities. Ideally, they should be updated every six months. Additionally, many companies have recommendations for employees on how exactly they should communicate on social networks, what topics to raise, and how to respond to potential provocations. The primary goal of this is to prevent the business from being at the center of a scandal.

Nevertheless, even such detailed and carefully prescribed instructions cannot foresee absolutely everything. Therefore, even with these guidelines in place, businesses sometimes find themselves involved in scandals.

Let’s recall the Swedish company engaged in clothing retail that used a boy with a dark skin tone in its advertising campaign. The boy wore a sweatshirt with the inscription “Coolest monkey in the jungle.” Accusations of racism did not take long to surface, and the indignation from opinion leaders only fueled the situation.

And even though the changes were made on time, all the relevant photos were removed, and the responsible individuals were punished, the company’s shares still fell by a third within a year, and some of the brand’s stores were even closed in South Africa. Of course, time passed, and the scandal was forgotten. Today, the brand continues to grow and explore new promising markets.

How to properly resolve emerging crises? It is essential to create a cross-functional team in advance, consisting of PR specialists and experts who will work on the incident. If the team members are familiar with their action algorithm and act quickly and efficiently, even unpleasant situations will not gain publicity.

• Preparing a position paper

A crisis always implies that specific and clear communications must take place. It is important to understand why something happened and gather as much information as possible about the incident. All of this will then be used to prepare statements. These are short messages that describe the company’s official position.

Characteristics of these statements:

Only provide verified information, preferably pre-approved by lawyers.

Messages should explain what happened and answer the question of what the company plans to do about it in the future.

It is important to talk about the importance of life, health, human rights, and the environment.

Use factual language, avoid emotions, and sarcasm.

If the company accepts responsibility, it must apologize and inform about the measures it will take to change the situation.

The message can be small and consist of just a few paragraphs. If necessary, you can always publish updates and add new points. Statements are published on the company’s official public platforms.

• Round-the-clock monitoring and working with media services

First, you need to identify the source where the problematic information first appeared. If you cannot do this independently, use the services of one of the monitoring agencies.

If the mass media is the source, contact them and ask to update the information with an addition about the position your company holds regarding the incident. Mention that there should be a balance between assertions and opinions. If someone’s post on social media is the source, be sure to comment on it as an official representative of your company.

If television channels approach you, before giving comments, ask the journalists for a list of questions and allocate time to prepare your answers. Keep in mind that not everything you say will be broadcasted. Most likely, it will be cut into pieces, and not in the best way.

Here are some more recommendations on how to save face during a scandal:

Don’t remain silent. There are situations when there is simply nothing to say. But even in such cases, you should communicate and say that you are actively working to clarify the circumstances and resolve the arising issues.

Don’t waste time. Every minute is crucial in a crisis situation. Work actively and act promptly. You can rest later.

Be honest with people. If you conceal or distort information, it will definitely not work in your favor.

Don’t be swayed by emotions. Remain calm and composed under any circumstances.

Stick to the facts. If you are using any information, you must be absolutely sure of its truthfulness. Otherwise, you risk not only your reputation but also your relationship with the law.

Remember that any conflict can be taken to the legal realm. So, don’t forget about the need for a prepared evidence base. Save all correspondence, take necessary screenshots. The date and time must be visible on the screenshots.

Keep your team informed. All your employees should not only be well informed about what is happening but also know the official company position.

Hire experienced experts who will help you deal with the problem.

• Further development of events

Only a very small percentage of crisis situations can be stabilized within the first day. More often, the situation becomes more acute and worsens with each passing hour. This is especially true if the company remains silent or distorts the actual facts.

So remember, the most important thing is to have a calm and competent reaction within the first day of the problem arising. If everything is done correctly, the company’s losses will ultimately be minimal.

Conclusions

During a crisis, building normal communication is difficult. This is mainly because the situation often changes and starts to require new, often either strict or creative crisis management measures. If these measures are not successful, it can lead to a real catastrophe and even the end of the company’s operation. Therefore, turn to experienced specialists for crisis management measures. For example, to the specialists at S&P Investment Risk Management Agency.

The choice of the organizational and legal form of the business entity impacts not only the initial stage of registration, but also the establishment of the business structure, the type of taxation, the regulation of conflicting financial situations with partners, the extent of managerial responsibility, liquidation procedure, etc.

If you are thinking about how to start your business in Ukraine from scratch and correctly, regardless of whether it is a medium-sized firm or a large company, S&P Investment Risk Management Agency will help you.

How to open a business in Ukraine

In order to start a business, as an entrepreneur you have to register with state bodies. First of all, determine in what organizational and legal format you want to work as a natural or legal person, as there are certain differences.

FLP is an individual working as an entrepreneur. This type of activity is usually chosen by those who provide services to the public or to other companies. At the same time, the planned income cannot exceed 5 million hryvnia per year.

LLC is a legal entity, an organization having one or more founders. LLC or Limited Liability Company choose entrepreneurs who plan to do business with large companies, work in foreign markets and attract investment.

No matter what form of activity you choose, you can register a business without the participation of the State Registrar. To do this, you need to apply online through the portal Dia, using a qualified electronic signature (CEP). You can also register FLP and LLC offline through government agencies. S&P Investment Risk Management Agency will help you to register the business with highly qualified lawyers.

What are the features of the Ukrainian market

The lack of domestic capital and the need to restructure enterprises, on the one hand, and the need to reduce the technological gap, on the other, are actualizing the question of attracting foreign investment for Ukraine.

Attracting long-term foreign investments, as well as intensifying activities to promote them throughout almost all the years of Ukraine’s independence, was one of the priorities of its economic policy, which was determined by a number of official documents. Unfortunately, however, the results are disappointing today, and large Western investors are wary of doing business in Ukraine.

It is undeniable that in Ukraine there are a number of investment attractive factors that contribute to the expansion of its investment ties: a large and virtually competitively unlimited domestic market with a lot of commodity positions; geographical location at the intersection of the main transport routes between Europe and Asia; relatively cheap and skilled labor; scientific potential; developed infrastructure (ports, bridges, airfields, warehouses, communication systems, water supply) and others.

However, according to one of the indicators reflecting the degree of integration of the country into the world economy, the development of its external economic relations and the desire to create an open, export-oriented model of economy – the accumulated volumes of foreign investment, Ukraine is far behind the vast majority of countries with transformative economies.

The global financial and economic crisis in 2008-2009 and the military aggression of the Russian Federation against Ukraine in 2014 significantly worsened investors’ expectations regarding further investment prospects and security of assets in the country and made their adjustments, resulting in a decrease in income inflow and even capital outflow in certain periods. Therefore, the emerging task is not only to actively attract new capital, but also maintain existing foreign investors in Ukraine.

What are the main risks for business?

1. Talents. The company must take care of the health and safety of those employees whose lives have been directly affected by the hostilities. However, there are additional effects that affect well-being. For example, employees’ family or friends may be at risk. This may lead to reduced productivity and reduced access to IT talents located in war-affected regions of the country.
2. Cybersecurity. The conflict caused an increase in the total number of cyberattacks, therefore, it is desirable to carry out corresponding checks more often. In addition, it is important tokeep under constant review the protocols of protection against attackers. For example, Gartner Research recently identified updated models of how ransomware began to operate, which itself called into question the effectiveness of previous cyber-defense strategies. In the case of ERM leaders, the issue of determining the value of their own assets and developing a response manual is of particular importance to them. If you do this in advance, you don’t have to repeat the same process in a hurry once the cyber-attack already started.
3. Finances. As a result of the war, the prices of basic commodities will rise, thus fueling inflation. It is important for ERM managers during this period to coordinate with their colleagues all further actions related to the analysis of financial risks, as well as to prepare strategies that will help them to reduce the negative consequences of emerging threats.
4. Supply chain. It is essential to ensure that the plan of action for suppliers is laid out and thought through in case of the emergence of an unpredictable situation. It is important to review and rethink all relevant supply risks. If there are dependencies on some suppliers, they need to be loosened. In the future, there is a risk of facing a shortage of important materials and increased costs, so it is better to think of alternative logistics options in advance.

Turnkey registration service (LLC) in Ukraine – fast, convenient, with a guarantee

Any kind of business, be it a company, LLC, FLP or PIF must be registered in the tax authority in Kyiv. There are so many existing tax schemes that anyone can get entangled in them. For example, if you want to open a PIF, you will be presented with several varieties depending on such factors as:

• Type of activity;
• Future financial turnover;
• Possible profitability;
• Number of employees hired;
• Nuances of work.

All documents required for registration must be filed within a certain time frame and in accordance with the procedure prescribed in the legislation. If there are inaccuracies or errors in the documents, you can get a refusal of registration. Therefore, it is better to contact our company for preparation of documents and other assistance in registration.

The success of a company is largely determined by its business reputation. And, unfortunately, it is often under threat. For example, if rumors begin to spread about a company in the media that are not true. How to proceed in such a case? Listen to advice from S&P Investment Risk Management Agency.

What is goodwill?

There is such a thing as goodwill. It means not intangible assets, the assets of a certain enterprise that were acquired and accumulated by it in the course of its vigorous activity. Such assets include its name, reputation, professional connections, trademarks.

Goodwin has its value. As a rule, it is calculated by subtracting their book value from the market price of the assets of the relevant company. Many Ukrainian enterprises avoid mentioning the buzzer in their accounting documents. However, if a merger of two companies is planned, or a takeover of one company by another, then goodwill is suddenly remembered. After all, if you correctly justify the market value of a particular business, you can get a better price for it or demand more favorable terms of cooperation from potential partners.

In other words, the better the business reputation, the more capital it can be transformed one day.

Business reputation is protected by law, and therefore no one has the right to harm it. However, this happens quite often. And here comes another complication — how to determine the amount of damage that was caused to business reputation? After all, it is an intangible asset. The only solution — initiation by the injured party of various examinations. It is easier to prove the loss of goodwill than the extent of the decrease in that intangible asset. But on the basis of the size of this decrease the court recognizes the degree of harm caused to the company.

What has a negative impact on reputation?

There are many ways to damage a reputation. For example:

1) placing negative reviews on the Internet;

2) publishing information that is false and untrue.

Attention is paid to the smallest details. A few bad reviews may not necessarily affect the attitude towards the company. But if opinion leaders spread false information, then this can create big problems. And sometimes a real PR campaign can be deployed against a certain enterprise, which includes articles in the press, reviews, comments, and more.

In the digital age, any information is distributed instantly. The image of a particular brand can be ruined in a matter of minutes. As a result, the demand for the company’s products will fall, investors will disappear, funding will disappear.

But there is also negative information about the company, which is not aimed at harming its reputation. This information includes:

• Expressing an evaluative opinion about the company’s activities.
• Filing a complaint with the relevant authorities regarding violations committed by the company and requesting an audit of its activities.

Consequences of damaged reputation

What is goodwill? This is:

1. the ability to distinguish your business from competitors;
2. A direct consequence of your positive qualities as a leader, the use of the best technologies, the right selection of personnel and not only;
3. Determinant of a company’s value

If the reputation has been damaged, it will lead to the disappearance of existing customers.

At the same time, new clients will also not appear. Profits will disappear, the business will become unprofitable, its value will fall. How to prevent all this from happening? You must promptly perform the following actions:

1) find competent PR people who will start raising your reputation;

2) find good lawyers who will help you file your claim.

How can you protect your reputation?

First you need to file a claim with the court, and then check the following points:

1. losses must be compensated;
2. The media that wrote false information refute it;
3. Any information that discredits the company is removed from the network, and a ban is imposed on its re-distribution.

Unfortunately, it is possible to achieve compensation for damages or other impact on the defendant only if the right strategy was built and the interests of the injured party were represented in court by experienced lawyers. Just to prove the fact that false information was spread about the company is not enough.

As a rule, in court they seek to prove all the factors listed below in their totality:

1. The resulting company could boast of a high reputation. The proof of this is the high turnover, well-known partners and clients in their circles, positive reviews on independent resources.
2. The reason for the deterioration of the reputation was not a decrease in the quality of products or services provided, but the actions of other people specifically aimed at this.
3. All the negative information spread about the company is not true.
4. The result of the publication of false information was that the trust of partners and customers was lost, sales fell and more.

All cases involving intangible assets require experience and relevant knowledge. Therefore, as a rule, they cannot do without the support of a good lawyer.

Who can help with this issue?

It is best to contact lawyers with relevant specializations. In most cases, they can take part in court proceedings while being geographically in another city. Remote participation does not diminish their participation in any way and does not affect the result. If you need really competent specialists, then you will find them at S&P Investment Risk Management Agency.

Conclusions

The key to the development of any business is its business reputation. But she is extremely sensitive to any impact, and therefore harm can easily be done to her. In order to minimize its impact, it is important to respond in a timely and urgent manner. After all, this is the only way you can be sure that you will receive the satisfaction.