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Posted by on in Open Source Entrepreneurship

So it's been 4 years 1 month since Matt and I arrived in Moldova. It's been 2 years since Matt, Vlad and I founded Smoke House SRL with the intention of opening a BBQ restaurant. And it has been 1 year since we opened Smokehouse. In that time we have accomplished a lot. Furthermore, we have seen a lot of change in Moldova - most of it for the better. There is new business and investment here; There are new products available in the stores and supermarkets; Most importantly, there are more and more expressions of cultural and personal expression that are breaking old norms and stereotypes and giving the feel of an ever more diverse and modern society. In short, we started out with a belief in Moldova and, in spite of all of the tumultuous events of the last years, we still have it. For that reason I want to introduce a project that we are working on that is near and dear to my heart. The Foreign Small Enterprise Alliance or FSEA

 

FSEA logocolored

you have literally no idea how long it took us to settle on this logo. I will punch the first critic in the mouth. That's a promise. 

 

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Această postare este tradusă, textul original fiind în limba engleză. Mulțumim voluntarilor care au editat și tradus acest blog!!

În sfîrșit am revenit. A trecut ceva timp și, sincer vorbind, probabil mi-a lipsit mai mult decît credeam efectul cathartic al acestui blog. De-a lungul ultimelor 4 luni am fost cam în totalitate concentrat pe afacere, fapt care a produs două obstacole destul de semnificative pentru oricine încearcă să mențină o activitate precum acest website. În primul rînd, am fost extrem de ocupat. Să gestionezi un restaurant în primul său an nu înseamnă doar să-ți dedici tot timpul lucrului, dar și să traiești constant cu memoria gîndului că niciodată nu îndeplinești mai mult decît 20 % din lucrul planificat pentru o zi, și că ziua următoare va aduce și mai mult lucru. Există și o doză complementară de vină care te face să renunți progresiv la pasiunile tale (ceea ce, evident, nu-i bine pentru sănătatea mintală). Al doilea obstacol în actualizarea continuă a acestui website este un pic mai cinic. Sincer, am început să fim indiferenți față de anumite lucruri. Circumstanțe care anterior îmi trezeau indignare, au început să-mi trezească doar rîsete și apoi nimic. Am fost într-o vacanță frumoasă și acum am revenit în modul de rîs, pe care vreau să-l păstrez. Indignarea persistă, dar e ascunsă sub un paravan de așteptări abisal de joase, fapt care-i un element de bază al gestionării afacerilor în Moldova.

Așadar, pe această notă sumbră, mă voi lansa într-un subiect care, cred eu, va crea un tablou despre ce înseamnă să faci afaceri aici (și care expune o doză de frustrare), dar este orientat spre cum ar putea fi lucrurile. Mai exact, cît de multe oportunități sunt aici pentru oricine dorește să muncească mult și să încerce. Cînd am început să scriu acest articol cu cîteva luni în urmă, l-am întitulat „Lucrul cu furnizorii (sau: Coca Cola, așteptam mai mult de la tine)”. În mod hilar m-am abținut, pentru că nu voiam să menționez tare și răspicat numele Coca Cola. De atunci am pierdut această inhibare (și veți vedea de ce).

Trecînd direct la subiect, iată cîteva motive pentru care Moldova este plină de oportunități pentru oricine își dorește să le înhațe.

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Posted by on in Stories From The Field

So at long last I'm back. It's been a while and frankly I've probably missed the rather cathardic outlet of this blog more than I knew. For the last 4 months or so I've been pretty much totally focused on the business and this has yielded two rather significant obstacles to anyone who seeks to keep an account such as this website. Firstly, I've been extremely busy. Running a restaurant in it's first year is not only about all of your hours being taken up by work but also living the the constant knowledge that you never accomplish more than 20% of your work in a given day and that tomorrow will add more and more. There is a certain guilt that accompanies this, once known, that drives you to progressively eliminate your hobbies (obviously not good for mental health). The second obstacle to my continued updates to this site is a little more cynical. Frankly, we've begun to get numb to things. Circumstances that used to invoke outrage in me began to invoke only sputtering laughter and then nothing. I took a nice vacation and I'm back in laughter mode which is where I intend to stay. The outrage is still there but hidden beneath a veil of abysmally low expectations that is a staple of doing business in Moldova. 

So on that dismal note I will launch into a topic that I think is going to paint a picture of doing business here (and as such exhibits an amount of frustration) but with a focus on how things could be. Specifically how much opportunity there is here for anyone who wants to work hard and try. When I originally began to draft this entry a few months ago I titled it "Working with suppliers (or: Coca Cola we expected better of you)." Hilariously (in retrospect) I held off because I didn't want to call Coke out by name. I have since lost that inhibition (and you shall see why).   

 

 

b2ap3_thumbnail_batmanNoFs.gifsays it all... 

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One year in a reread of my original "Choosing a Bank" seems like quite a strange journey into a far more naive past. In the year since I wrote that we've talked a number of other times about our experiences banking in Moldovan and moving money here (loansmoving money and the general state of the banking sector / the theft of the century). 

 

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When looking for tie in here I punched "crook" into google images. This is first.
I like to imagine this man swooping into Moldova and stealing 1 Billion
Dollars leaving the country to destroy itself in finger pointing while he
rides off into the sunset. Oddly this is a more comforting
image than the truth...

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Posted by on in Stories From The Field
We Are Open / Year in Review

Note: for any of you in Moldova you likely realize that we have been open for just over a month (if you didn't know that come visit us!! smokehouse.md for directions).

Smokehouse opened for business on Monday June 29th 2015. As you might imagine the trials of a new business have completely consumed my time (and still do) which is why this is the first time I'm getting a chance to make an update. The reality is that this date was just 12 days away from the 1 year anniversary of signing the lease to our Smokehouse location. It feels like it's time for me to write a bit about our journey. 

 

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Tagged in: Business Open OSE
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Have you ever had one of those moments when someone says something that you have long known to be true but they way they say it makes the knowing it both stronger and clearer in an instant? This happens to me from time to time when a single turn of phrase can open up an idea more powerfully than an entire novel. This was the case recently when I was talking to a German friend with lots of experience in the Moldovan financial system who said the following. 

 

"in America or Germany the fiscal authorities are primarily concerned with uncovering fraud. In Moldova they don't look for fraud, they look for errors."

 

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Hiring someone in Moldova is so hilariously convoluted and difficult that we have actually had to hire a professional HR manager as an employee of our company simply in order to file the paperwork to employee the company's founders (technically we also have an accountant and 1 employee but this would literally be just as hard hiring only ourselves). This woman has been working on site now for 2+ weeks and we are still not through the daily stacks of paperwork. Keep in mind we are 6 people (including the HR manager who is now also tasked with figuring out how to hire herself). This is all the subject of a future post I'll be writing but as a primer, I wanted to introduce you all to the world of Moldovan employment bureaucracy in the context of getting a job in the food service industry. 

While our team's collective western food service expertise is encompassed in Matt's 2 weeks at Taco Bell in high school, I have enough friends who have waited tables to know a few things. Namely, it's a hard job, but it's not necessarily a hard job to get. You walk into a restaurant, ask about openings, apply, and get in dependent on whether or not they see you as a fit. 

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no experience? that's fine! no, no we don't want to hear about any "record" - just sign on the line!


I'm not trying to oversimplify things but basically if you get the job you show up to work, they train you and you start. Hopefully by the end of the cycle payroll has you entered in and you get your check. Done and done. This is not the process in Moldova. If you want a job in food service (waiter, bartender, cook, whatever) in Moldova you need to know that...

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Tagged in: Bureaucracy Cafe
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Meet the Good Guys - the 3 Best Businesses We've Encountered in Moldova

So here's a new type of entry for us to have on OSE. Today I'd like to share with you companies that we've encountered in the course of doing business here that have stood out as great examples of how to conduct a quality business in Moldova. It's important for me to note that this list is only compiled from our experiences here so a) we have no doubt missed lots of great companies (post them in the comments below with why they're awesome and we'll try and include it in a future post!) and b) we may have judged a company as awesome from our limited experience where someone else had a different experience there. In either case take to the comments to let us know what you think! Here are the picks. They aren't ordered so don't get too hung up on the numbers except as an organizational convenience :)

Without further ado our list...

 

#1 Metro

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Tagged in: Good Guys
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Posted by on in Stories From The Field
You have two cows...

We've all heard the classic economics analogy jokes about cows my favorites are these:

Communism: You have two cows. You give them to the government, and the government then gives you some milk.

Fascism: You have two cows. You give them to the government, and the government then sells you some milk.

Capitalism: You have two cows. You sell one and buy a bull.

Nazism: You have two cows. The government takes both and shoots you.

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Posted by on in Stories From The Field
Accounting Part 1

This last week I started to write my first serious post dedicated to corruption in Moldova. While I've touched on the subject a bit in my short post about The DMV or the epic saga that was our visa approval process but nothing dedicated to corruption. As you might have noticed from the title of this post this is not such a post. I realized that even starting that conversation was so daunting without certain background elements explained that it was totally unmanageable in scope. I'll try again soon but in the meantime I decided it was time to share a glimpse into accounting in Moldova - by far the most batshit insane and corrupt part of doing business here bar none.

Let me preface this article by saying that it is just a first effort to scratch the surface of this madness. By no means do I have even a rudimentary grasp on the workings of the accounting and fiscal systems in Moldova and attempts I've made to understand them have come up very short. As a team we've decided that someone needs to start taking night classes on accounting here just to get some idea of what's going on (and we have a full time accountant hired now). So with that said here's a bit about what I do know right now. Pardon me if I made bad assumptions as to intentions or root causes behind these things. After dealing with this for a day it is easy to assume that the system was entirely crafted by unhinged lunatics on a bender and to forget that there are real people trying to address real problems in the government here. That said, as you will see, they are failing spectacularly. 

 

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like this but with more stamps

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In life there are the problems that you see coming a mile off and those that just pop up out of no where. As we'll see from this short post culture has a whole lot to do with what you do and don't see coming. This is a condensed version of the tale of our final search and closing on a location for Smokehouse

 

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provided without comment

 

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Posted by on in Stories From The Field
Bank Loans in Moldova

quick note: don't forget our site has a comments function. With something as complex as banking and loans / many of the topics we cover there is a very good chance that you know more about some element of it than we do. Share your thoughts!! Comments are at the bottom. 

Introduction - funding a startup

So here we have an interesting post detailing the last month and a half we've spent trying to get to a "happy spot" regarding startup capital. There are many ways to fund a startup (as this nice article explains) but for something brick and mortar like a BBQ restaurant many options aren't as available as they would be if, say we were starting a scaleable tech company. With that reality the most common way for people in the US to start a small business is by "bootstrapping" it with their own capital, either in the form of cash, a 2nd mortgage, personal credit or help from friends and family as loans or in exchange for equity. In our case we are a very "bootstrapped" company. We have our own assets on the table and have approached lots of friends and family for investment. All told this just isn't enough so we started looking to other options. This is when we began to investigate the possibility of a Moldovan bank loan.  

 

What type of loan we need

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The DMV or "to do without money..."

This short post is a bit of a departure in that it does not directly pertain to business in Moldova. That said it a) discusses a proces that any expat needs to go through to stay here (aka - registering with the DMV if you have a car) and b) exemplifies a prevelant mindset here reguarding bribes or "to do something with money" 

So... anyone who has ever gone to the DMV (the "Department of Motor Vehicals" for non-drivers) in the US is aware of what a "fun" process this is. I can't speak to any other countries in the world but I suspect that this is a universally hated institution. I once called the DMV helpline in Virginia and after 30 minutes on hold was told that "there was a higher than normal call volume" and I should call back on Wendsday. It was Thursday. So with the background of having once been put on hold for a week in the US here is the tale of the Moldovan DMV - МРЭО. 

 

After finally achieving my visa to live and work in Moldova it was time to re-register my car. I drive a 1986 Lada Жигули named Надя (Nadia - "hope" in Russian). Nadia and I have been on many adventures together but have had to take a prolonged break while waiting for my visa as her tags expired. So it was with spring in my step that I grabbed the tags off the car and took a marshrutka (mini-bus) out to where google told me the DMV was. It was my figuring that I would have to pay some fees and do some paperwork but that this would be fairly straight forward. In Virginia you do this by mail. Sadly (but predictably) in Moldova things are more complicated. I was turned away from the DMV because they needed to see my car as well. I asked them "am I allowed to drive here with expired plates?" This was met by a blank stare which I took to mean "yes sir we will personally vouch for you in the event of trouble and go so far as to expound upon your great personal character should the police have doubts." I drove in the next day. 

 

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Posted by on in Stories From The Field
On Menus...

Picture above from Listen 2 Uncle Jay and apparently taken in Tatarstan Russia. Good to know that "business launch" is not just a Moldova phenomenon :)

 

If you live in Moldova or have ever traveled here one question sticks out above the rest in terms of how constantly it is encountered and how frustrated it is bound to make any westerner.

 

Why does every restaurant have a 50 page menu with hundreds and hundreds

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Tagged in: Bureaucracy Cafe
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Posted by on in Stories From The Field
Visa Denial and Appeal

Read Me First: I wrote this originally while this process was ongoing so I imagine a fair amount of frustration and anger comes through. I've edited the post to reflect the fact that we did eventually get our visas but I have tried to keep the tone the same. This was an incredibly terrible process and I have no desire to sugar coat it just because we got through it. I've had to put a little distance between the events and my posting to even look it over because the whole thing is mostly a mess of bad memories for me. So, without further ado please enjoy...

 

Well folks you're in for a doozy with this one. I apologize in advance. If you're the kind of person who doesn't want to see things about Moldova that make you sad, depressed or enraged I recommend stopping now. 

That picture you see there is my whiteboard's countdown. It was a countdown from the moment my visa got rejected to the day I needed to get myself out of this fine country I've called home for over 2 years. It reflects the fact that for almost a month our living room became a war room dedicated not to our business but to fighting a corrupt and confused visa process just in order to stay in the country. At the end of this process our appeal was accepted and we managed to get visas. Before it did though that whiteboard counter hit zero and went negative. Read on to follow the tale... 

 

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Tagged in: Bureaucracy Visa
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Posted by on in Stories From The Field
On Stamps

So here's a topic that will look very familiar to anyone who's lived in the post-Soviet space but seem totally nuts to everyone else. Stamps - what are they for? Well in Moldova the answer is "literally everything." I first came in contact with this when I went to Kazakhstan as an English teacher and my packing list included "stamps for grading papers." My first thought was "I thought I was going to be teaching high school - why do I need smiley face stamps?!" The reasoning is because no matter how silly looking the stamp they make things "look official."

To understand this you need a little background on how things become "official" here vs. in the states. In America your signature is your bond. Furthermore your word can be your bond in contract law if it is deemed a verbal contract. I am not a lawyer but the gist is that in the US agreements can range from silly-informal to super formal. In Moldova they are always super formal. In theory this is to "control" the process ("control" being a translation from Russian for something like "oversight on steroids") and to prevent fraud and forgery. In practice this is a system of red tape unrivaled by even the darkest fears of government fearing anarchists. It is literally like buying shotguns to kill flies. 

 

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not only is this a real product but you too can be killing flies
with a shotgun for the low price of $39.95. I fucking love America.

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Tagged in: Bureaucracy Stamps
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Of LLCs and SRLs Part #2 - Banking and Conclusions

This is Part 2 of the process of introduing a US based LLC as a parent company of a Moldovan SRL. Find Part 1 here.

 

Note: this post is mostly a wordy, if humorous, take on banking and wire transfers in Moldova. If you would like to jump to the recommendations section for Parts 1 & 2 of this post do so here

 

**Update Nov 15: we just finalized all of the papers so this process is over. Once we got through the lower level people to the department director things got much easier. This is in spite of the fact that they royally messed up our paperwork. The director fixed it all himself and was not only professional but extremely pleasant to work with. It's always a wonder when you find someone in the government who really wants to help and make your day easier. Today, at the end of this mess, I have a lot of respect for the State Registration Chamber. Also we discovered that we can in fact have multiple "Administrators" of the company. Post coming soon...

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Tagged in: Banking Bureaucracy LLC SRL
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Posted by on in Stories From The Field
Of LLCs and SRLs Part #1

Note 1: This post is an update to our first post about organizing a company in Moldova. While that post was pretty general and explained our initial reasoning this one will attempt to explain the results of that reasoning over the last few months and a few preliminary recommendations for other entrepreneurs (ok, this got long. Conclusions Recommendations will be in Part 2 [COMING SOON]). We will be writing a further update on this topic later on with more solid recommendations. (small update below)

Note 2: This post is covering quite a lot of experience had over a long period of time. The topic is dense and often technical. Please comment if things are unclear and I will add more information. Also, as usual, please feel free to tell us how stupid we are. Everyone can learn from that. 

 

Jump to... (note to use these section links open up the full version of the post by clicking the title or on "Continue Reading" below)

Section 1
Basic Organization 

Section 2
Selling Shares vs Adding a Founder: 
Section 3
The Necessary Documents for Adding a Founder
Section 4
Notarizations, Apostilles, Translations and DHL 

 

 

So Begins a Tale of SRLs and LLCs...

 

 

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The path to success is almost self evident!

 

 

Section 1: Basic Organization


 

I'll begin where the last post ended which was with a discussion of the process that we decided to embark upon. That was to organize the companies basically as follows:

 

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I'll let you all guess which silhouette represents which manager...

  

So to describe what you're seeing there we founded a Moldovan SRL called "Smoke House SLR" (they refused to believe it was one word and we didn't fight it). Additionally we founded an American LLC called "The Moldova Company LLC" in Virginia. The purpose of the LLC, as described briefly in the previous post, is to escape from some of the more challenging bureaucratic differences between a Moldovan SRL and an American LLC. These all...

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Hard Times Always Reveal True Friends

While I'm not sure who wrote the quote I've used as the title for this entry I'm sure we've all seen it circulate around the internet. In this process of starting a restaurant in Chisinau we have run into roadblocks in the strangest places and more ambiguity than I can quantify. If one were to identify a single thread of anger, disappointment and exasperation that pervades my postings (and much of my work right now) it is ambiguity. In most countries there is an easily understandable lines between what is and what isn't permitted. Furthermore, it is pretty easy to figure out where you will encounter difficulties. If you were opening a restaurant in NYC for instance there are numerous resources that could help you find the information on the startup process you need. In Moldova this is not the case. If I were to sum things up it would be that...

Nothing is easy but everything is possible. 

 

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This is supposed to be inspiring but terrifies me day to day. 

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Tagged in: Friends
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Applying for a Visa to be an Entrepreneur in Moldova

Update 29/9/14: it seems that Americans (and possibly other countries but I have no idea which) are allowed to apply for 5 year visas instead of just 1. This was conveyed to us by one of the branches of government tasked with approving our visas. We are trying to alter the documents post-submission but are unsure if it will succeed. Stay tuned. 

So if you're not a Moldovan and you're going to try and start a business in Moldova you will need a visa. This is an interesting process and by "interesting" I mean basically horrible. Firstly, here are the top-level requirements:

 

If you are from a country that has visa-free entry to the Republic of Moldova (like America and Most of Europe - a list is provided here but I have no idea if it's up to date)

  1. You can enter Moldova for 90 days without a visa
  2. While in Moldova you cannot work but CAN found a company (but don't forget the rules of foreign ownership)
  3. You must apply for your visa while you still have 30 days left on your visa-free stay
  4. They will evaluate your visa for 30 days. After that you go back to the office and they tell you yes / no

If you require a visa to enter the Republic of Moldova - good luck. I encountered a lot of the paperwork for this process and while it seemed straightforward it's a fair bet that it's anything but. Anyhow, I have no experience with it (if you do please comment below)

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