Simplified Support to Family Businesses: WHAT IS ABAD?

ABAD, a government initiative, part of a programme on development of socioeconomic life in the regions, officially launched its activity under a presidential decree on September 23, 2016.

ABAD is a public entity run by the State Agency for Public Service and Social Innovations under the President of the Republic of Azerbaijan. This agency designed for social projects is unique because it primarily supports family businesses.

In line with the Decree, ABAD (the acronym stands for “Simplified Support to Family Businesses”) centers are established to carry out socially oriented projects aimed at ensuring the active participation of the citizens in the social-economic life of the Republic of Azerbaijan, developing small and medium enterprises, raising the employment rate among the population and supporting the establishment of competitive family businesses in the country.

In the beginning, ABAD team had approximately three months to establish the system, the project, to get all the staff. ABAD started with two pilot regions. The first one is Masally, the second is Balakan.

Talking about statistical data, at present, there are 266 ABAD beneficiaries, 61% of them are women, and 39% are men.

Today, ABAD is represented by 3 regional centers (in Masally, Balakan, Guba) , 7 Sales centres ( 4 in Baku, 1 in Gabala, 1 in Shamakhi and 1 in Sheki), 2 Ceramics centres ( in Shaki and in Nardaran), and 1 ABAD School (in Guba). Two more regional centres in Shaki and Imishli and one sales centre in the “Fairmont Hotel” Baku will be opened by the end of 2018.

By the end of the August Guba “ABAD” Factory will be ready to operate after the official inauguration ceremony. The factory already equipped with all the equipment that enable to manufacture dairy, meat, confectionery and compotes. It should be noted that the factory will engage manufacturers from Guba region.

ABAD centers provide business planning, marketing, branding and design, financial accounting and legal assistance services to the family households. After generating a brand name for the manufacturer family, every product is labelled with a special sticker that attests to its production under ABAD’s supervision.

Furthermore, ABAD conducts the certification and the sales of the products based on the "single window" (one-stop-shop) principle, and arranges the logistics chain.

There are fine craft works in the ABAD sales centres, but how does ABAD help to get them there?

This agency designed for social projects is unique, because it primarily supports family businesses. ABAD supports them at every stage: from production to sales.  A range of services are provided; equipment, or consultation on equipment, depending on the family business. Furthermore, branding, design services, financial and juridical consultation, marketing, all logistical services and sales are organized. Then revenue channelled from product sales to the family’s bank account, through ABAD. So ABAD team strides with the family from the very beginning to the end.

The socio- part of this socio-economic project lies in the opportunity that people from the regions get for using and sharing their skills with links to the capital and a network of fellow artisans. But the -economic part is no less important.

ABAD signs a commissioning contract with all the businesses and, depending on the business, takes a small amount of the revenue, normally a small percentage, just to pay outsourced services. ABAD outsources logistic services, as well as the packaging, warehouses, marketing, some of the consulting, some equipment, so ABAD have to pay for those.

As for the agricultural part of the project, many people have enjoyed the delicious cheeses and creams made from the excellent sheep, goat and cow milk produced in the regions – not to mention the sausage, jams and honey – but it has not been easy for small farmers to enter the larger markets with their products. ABAD worked on the main obstacles: lack of information, finance, packaging and certification.

The idea actually started from ASAN. ASAN members and top management are always brainstorming and they were talking about this idea for half a year because they wanted to create some new social projects...

After their brainstorming, they decided that they should share their thoughts with officials. It was just an idea, raw material, for the officials who analysed it, pondered over it, and a presidential decree...

After that, they really started to pick things up, one by one; from the agency - from ASAN - from the outside, to create a very innovative, young staff that would be enthusiastic about doing this work.

The first ABAD outlet was based in Icheri Sheher, many of its customers are among the greatly increased numbers of tourists that have visited the country in recent years. For many of them, a trip to Azerbaijan is still a journey of discovery to a little-known country and so there the shop and its products represent an opportunity for them to learn more.

... So at the ABAD sales centers the guests receive all the information about the woodcarvings, about our silk keleghayis [exquisite traditional scarves], our carpets, copperwork from Lahij: their history, what they mean or where this pattern comes from, the idea behind the pattern. In short, everything! Every Azerbaijan is an ambassador od his country in providing information about the culture of Azerbaijan, the products, in this globalizing world. And it is very important to know that it is all about marketing if you want to become successful in the international arena as an economic model, or as a family brand, or as a cultural heritage...

ABAD has already launched its ceramic centre in Shaki:

We are choosing the best masters of ceramics to share their knowledge with the younger generations, because pottery is an essential part of a national culture. When you use clay it means that you are staying with the land... It is a historical and archaeological source, the first in every culture. Especially here, because we have very rich sources of clay, says Head of Marketing and PR department of ABAD Ms. Turana Gasimova.

ABAD is built on the same principles of innovation and efficiency as ASAN Service. Therefore, the completed questionnaires were considered very quickly, despite the large number of applicants. ABAD employees, including many volunteers, viewed their applications, determined the production capacity of each family, assessed their potential and opportunities, and also how much the product is interesting to the market.  Once the application is approved, the contact is concluded with a family, a bank account and a TIN (taxpayer identification number) are opened and assistance is provided in obtaining a certificate from the Ministry of Health and the State Committee for Standardization, Metrology and the Patent with a single window. Then, for each family, a business plan, a brand, a label and a container are developed, trainings and seminars are held, assistance is provided in the purchase of equipment that could be paid in installments.

ABAD receives small commissions for its work - a small percentage of turnover from a person who becomes ‘abadchi’ (ABAD’s beneficiary member). Due to this small incoming to the ABAD account, the further activities of our organization are financed, connections are established with new people, new contracts are signed, equipment is purchased and the process is repeated. Cooperating with one family, we help the other, so the process expands. Thus, a large network is obtained,” Ms. Gasimova said.

At the presentation that if the average income from one tree is about 250 manats (it is a question of selling fruits), then the income from the sale of jam is already 753 manats!

"Initially, the state allocated one million manat to our project, thanks to which we built the system and started production of the first goods. However, in the future ABAD will be capable to finance its activities on its own to continue supporting other families” says Turana.

As for the second direction, as is known, Azerbaijan has long been famous for its masters in various spheres of arts and crafts. However, to date, many of them do not have the opportunity to sell their products and compete with Chinese souvenirs, massively entering our country. Seeing that the work does not bring any profit, they suspend their activities, and thus the Azerbaijani culture loses a piece of its future heritage.

In this regard, ABAD decided to ease the situation of the masters, helping them to sell their handicrafts - whether it is pottery, painting, carpet weaving and so on. Now everyone can apply to ABAD and through our organization get directly to potential customers, offering their products for sale and earning money that will allow them to continue to engage in creativity.

Assistance is provided primarily to people living in regions that manufacture their products in remote villages and do not have access to places of tourists’ concentration.

As a result, these people, who previously had no opportunity to sell their products, began to receive income from their activities.

Let's learn more about some of ABAD beneficiaries:

Muhammed Khalilov is the "ABAD" member from the Yeni Sharaf village of the Balakan rayon. Khalilovs family has been producing homemade jams for a long time.

The desire to increase the family's welfare, to get access to a larger market, directed Muhammed Khalilov to the ABAD:

"I work as an accountant. We have many trees in our back-yard, we make variety of jams from collected fruits but I have been worried about how the rest of the raw material were shed, and looking for ways to make a large amount of jams and put them on the market as a brand." 
When I learned about “ABAD”, I thought this organization would support me. 
"ABAD " helped us to purchase the necessary equipment, and now we are preparing a variety of jams in a larger quantity."
ABAD created the "Budagdan" brand for the Khalilovs family. At present, preserves of the walnut, rose petal, plum, peach, white cherry as well as tiny eggplant which only grows in Balakan have been offered for sale.

Should note that the jams of “Budagdan” brand are presented at “ABAD” stores and Bravo hypermarkets chain.

Jeihuna Aliyeva, a resident of Baku, prepares souvenirs and decorative items in national style.

Her elegant handicrafts are particularly well received by children.

"I'm making traditional toys of different types, like “Tig-tig khanum” ( a national cartoon character from “Pispisa Khanum and Mouse Bey”), and Cırtdan (a dwarf boy character of the tale). I think that such souvenirs will play a role in increasing the affiliation of younger children to national roots, " said the artist.

The artisan notes:

"Two years have passed since I started my career. In the past, I was preparing various national toys and decorations for my family. But after a while, I decided to arrange the sales of my products through social networks. "

Jeihuna, who is a doctor by profession, has never been busy with her profession:

"I enjoy decorative-applied folk art. When my handicrafts are welcomed by people, it makes me even more proud and I enthusiastically want to make new artifacts. "

She applied to ABAD via Facebook to expand the sales market of her products further:

"I want to become more widely known and to further develop my family business. I rely on ABAD in this regard."

It should be noted that Jeihuna's exquisite handicrafts are available at ABAD exhibition and sales centers.

In fact, there are hundreds of such successful stories! Good luck in your future activities, ABAD!

K.M.