The BARUTI case study – How a Young and Hard-working Diaspora can benefit Kosovo

(This case study was produced on the request of the Enhancing Youth Employment project in Kosovo (eye-kosovo.org) and is re-published here with the permission of the project and Baruti)

It is widely accepted that Kosovo pins its future economic development on two key assets – its young population and Diaspora. With an average age of 25, Kosovo boasts of having the youngest population in Europe. Beyond its obvious demographic advantages, youth also influences society with hope, openness and new thinking (creativity).

The Kosovo Diaspora is now well established in mature economies such as Switzerland, Germany, US and Scandinavia, offering a human linkage between market opportunities abroad and production opportunities in Kosovo. Kosovo is a small market, both in size and purchasing power, hence any policy to boost business growth and to reduce the country’s very high unemployment rate (35% in total and 60% among youth) must include a strong export component.

Again, this is where the active input of the Diapora is crucial. For the owners of Baruti, brought up and educated in Switzerland, the German–speaking markets of Germany, Austria and Switzerland feels like and are actually ‘home’ markets. The Diaspora brings language skills and understanding of the local context and culture in foreign markets to the new, export-oriented business growth model. In such, the Diaspora effectively converts internationalization and export activities into sales and marketing on another domestic market.

Three years of Baruti

The growth of Baruti has been absolutely breathtaking. The subsidiary company was registered in Kosovo in 2011. The three owners invested € 65,000 to start the Kosovo branch, reaching 24 full time employees in 2012 and a first year turnover of € 228,000. Today, three years later Baruti employs more than 150 staff, and is in the process of hiring and training another 150 staff in order to cope with new international contracts.

Baruti

We decided early on to very quickly build up a ‘local management’ within the company, who would be capable of leading and shaping the company’s activities in Kosovo”, explains Mrs Drenusha Shala, co-owner and Managing Director of Baruti.

The Baruti board members realized at a very early stage in the development of the company that identifying adequate numbers of qualified staff would be a core challenge, which had to be overcome in order for the company to take on new clients and grow. “At this point, we decided that one of the company owners would physically stay in Kosovo, to build a solid organisational and management base from which sustainable and successful growth would be achieved”, Mrs Shala highlights one of the company’s watershed decisions.

Another key decision made early on by the Baruti board was to diversify its portfolio of services to include ‘over the phone research’. Until this point the focus had been entirely on supplying Inbound Services, in line with a classic Call Center. “It turned out that as a Start-up company winning clients for the Call Center business was difficult, while we were more quickly successful in acquiring our first client for the market research business”, admits Mrs Shala and continues, “Staying flexible and open minded about new market opportunities is one key to our success”. With the first real ‘revenue’, Baruti seized the opportunity to further invest in its Inbound Services and Market Research Services and this investment quickly paid off as well. In 2014, Baruti won a very extensive public tender in Germany for its Inbound Service Department, against tough international competition.

Putting Customers first

The Baruti board members illustrate a fundamental understanding of the market in which they operate, and they are quick to point out that for them the customer always comes first! In order to enter the market and have the opportunity to satisfy the needs of the customers, Baruti knew it first had to fulfill all the formal requirements. In its drive to enter the security and surveillance industry market, offering 24/7 surveillance monitoring services, Baruti discovered that possessing Quality Management Systems certification is a requirement.

At this point in time, Baruti was already in a mode of fast growth, which put strain on the company’s cash flow. Baruti turned to the EYE project for support in order to speed up the implementation of ISO standards 9001 and 27001 certifications. The entire certification project was successfully finalized in June 2014 with five months delay, mainly caused by the need for further investments in IT and physical infrastructure, and the heavy workload of Baruti.

Baruti office

ADAPTIV IT, a local consulting company, completed the certification process, while TÜV Nord executed the audit. Thanks to the ISO standards 9001 and 27001 certifications, Baruti is now formally eligible to compete in a much larger number of public tenders on its key international markets – Germany, Switzerland and Austria.

Being Young does not mean being Reckless in Business

Another key to our success was the fact that we actively sought out experts with information we did not possess ourselves, at an early stage of our development”, explains Mrs Shala. Experts from the call center market in Switzerland assisted Baruti in drafting the ‘right’ customer acquisition strategy. “The experts also highlighted the timeline required to acquire different clients. While the hard work of implementation was left to us, the experts still installed in us an understanding that proper planning, patience and perseverance are essential skills that we must possess in order to succeed in this business”, admits Mrs Shala proudly.

Mrs Shala is quick to pass on similar advise to other fast-growing young companies in Kosovo. “The key to a successful business is customer satisfaction and sustainable growth with a sound and solid cash flow management”, proclaims Mrs Shala. “Stay close to your customers, be constructive, put yourself in their shoes and try to improve your product or service every day, as it was the very first time you served this particular client. This will generate customer loyalty, and that is something that is generally missing in Kosovo”, explains Mrs Shala.

According to Mrs Shala, the general business practice in Kosovo is too short-term in its thinking and too one-off in its practice. This means that companies invest little or nothing in ‘after-sales and cross-sales’ activities, and as a result of poor quality services they constantly loose their clients. When the companies’ focus is not long-term, there are very few returning customers. The company is then forced to always look for new customers, which is the most costly marketing activity.

Young entrepreneurs should work hard and remain close and constructive to their customers. In turn, this business approach will empower the young entrepreneurs to further develop their business models and product/service lines, and even expand their business growth”, Mrs Shala wraps up her advise to other upcoming young entrepreneurs in Kosovo.

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About Jakob Modéer

22 years of corporate and international investor experience as well as private sector development project management, consultancy in private sector policy and business advisory services, and direct consultancy to companies in South East Europe (and now a blogger on socio-economic issues)
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