The UAE is considered by many entrepreneurs and aspiring entrepreneurs to be a hub for startups. Starting a business in the UAE is a dream for most who aspire to break away from the clutches of the mundane, corporate 9-5. As with most adventures in life, carefully planning out such a venture will help increase chances of success.
Here are 10 tips that can help a new business survive and thrive in the UAE:
1. Conduct a feasibility study
Decision making as a startup can be nerve-racking and intimidating due to the lack of experience and know-how needing to run a successful business. A way to mitigate this is to conduct a feasibility study on the major decisions being taken in the organization. This would include thorough market and audience research along with competitor analyses to ensure you’re going in the right direction.
Before introducing a new product or service into a market, look for indicators through your study that will tell you whether there’s a need for it and will people pay money for it.
2. Monitor the environment around you
Keeping abreast of market and industry conditions is one of the most important aspects to business survival in the UAE. Through constant monitoring of your startup’s internal and external environment, opportunities and threats can be identified and a plan to mitigate threats and capitalize on opportunities can be constructed. This ultimately leads to adaptability, which is one of the most important traits a business must have to ensure long term survival.
3. Cash flow is crucial
An entrepreneur needs to have clear visibility and budget forecast of their financials to succeed. A detailed look into the amount of debt and credit as well as its sources can help you and by extension your business, make educated assessments on the current and future of the company.
Cash on-hand is crucial for most businesses while projecting healthy growth and cash coming in will help you avoid missing payroll and fixed monthly expenses.
4. Know your free zone benefits
The main reason why the UAE is such a hotspot for entrepreneurial ventures is because of the amenities given to startups in the form of free zones. Company setup in the UAE can be done easily with the help of institutions like SPC Free Zone. Some of these benefits are:
- 100% Foreign Ownership
- Fully Equipped Offices
- No requirement for Local Sponsors
- Exclusions on Corporate tax, Income tax, and Import and Export duties
- Reduced Trade Barriers
5. Networking is the secret to success
The fate of many business ventures lies in the ability of the founders to network. Networking, in this part of the world especially, is not only limited to a B2B environment but also to the end consumer. Good networking can result in the expansion of business connections which may result in better distributors and supplier networks. On the consumer side of things, it can result in customer retention, thus giving your company a competitive advantage.
6. Actively reduce your setup and operating costs
One of the biggest reasons for startup failing is the inability to recover costs incurred. The sad truth is that on average it takes around 2-3 years for a business to become profitable, which makes it even more important to limit unnecessary expenses and run a lean operation focused on value generation and growth.
7. Keep an emergency fund on-hand
2020 taught us that the world is truly unpredictable, and we can’t be prepared for every eventuality. Therefore, it is important for your startup to have a cash reserve ready for emergencies and other contingencies. The general rule of thumb for business is to be conservative in nature, which means that entrepreneurs must prepare for market downturns and potential paradigm shifts.
8. Monitor your cash to debt ratios
A good mix of both equity and debt can guarantee financial stability, though too much debt can lead to financial strains and organizational incapability.
9. Communication is king
Most startup difficulties arise from lack of communication within the organization. The entrepreneurial vision needs to be communicated to all the employees working in the startup, so that all parties involved know exactly what they’re working towards.
10. Creation of short- and long-term objectives and strategies
Every startup was initiated with a dream. At first glance, achieving this dream may be difficult but creating smaller objectives and strategies aligned with them can give startups a step-by-step method to achieve a grand goal.
Take the leap of faith!
One of the best things about starting your own business is the independence you have in all aspects of work, and it is the most rewarding experience you can hope to have. Take the leap of faith and start up your own company and don’t give up on your dream of independence and financial success!