STRATEGIES FOR SURVIVAL: WHAT KINDS OF SMES DO BEST
IN THE MARKET?
- THE FIRST 1,000 DAYS OF THE
ENTREPRENEURS’ AND
THEIR BUSINESS LIVES –
OBSERVATIONS FROM DUBAI SME
1
An Agency of the Department of Economic Development – Government of Dubai
DUBAI SME – An agency of the Department of Economic
Development – Government of Dubai
Mission: Enhance the Economic Welfare and Prosperity of the People of Dubai
Vision: Achieve Dubai’s economic development goals by 2015 for
competitiveness and sustainable growth
An Agency of the Department of Economic Development – Government
of Dubai
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The Context and Future - The New Economic Imperative
“Better” path
→ Productivity
Output
(economic
growth)
“New” path
→ Innovation
Need to move to
new growth path
“More” path
→ More labor
and capital
Moving Forward: a
different economic
development path
From “Bigger” to “Better”
Dubai’s current
situation in key
sectors, e.g.
• Real estate
Reaching optimal scale
• Decreasing returns for each
additional unit of labor and
capital
• Increasing macroeconomic
challenges (demographics,
environment,
infrastructure)
→ Rising cost of growth
Reaching minimum scale
An Agency of the Department of Economic Development – Government of Dubai
Inputs
(Labor and capital)
3
Our Vision, Mission, Roles & Core Initiatives
Dubai SME 100,
Gov. Proc. Prog.,
YBL
Incubation,
Idea Lab, Entrepreneur
Capability
Development, YEC
Corporate Governance,
Access to SME
Financing, Ease of
Doing Business ,
IP
Groom
Seed
Vision
Dubai as a Global
Center for
Entrepreneurship
and SME
Development
Advocate
Mission
Foster the development of a
flourishing entrepreneurial
culture and a competitive SMEs
sector to support Dubai’s
economic development
Roles
Entrepreneurship
& Entrepreneur
Development
SME Sector and SME
Firm Development
(Groom Dubai’s Top
SMEs)
An Agency of the Department of Economic Development – Government of Dubai
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Our Roles:
Dubai SME develops/enables the:
 Entrepreneur as a person (domain knowledge, selling skills,
business financial literacy, decision making, intelligent risk
taking, business planning, forecasts, how to use different
business tools, diagnostics, etc)
 Their business (commercial, corporate, organisation) –
guidance & advisories in execution from legal set-up,
formalisation & structuring, building a company, building a
business, industry-based discussions, costs of execution, pricing,
market demand, customer feedback)
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An Agency of the Department of Economic Development – Government of Dubai
Our Roles (cont’d)
 CEOs and Key Management Team Development – Investment &
Financial Savviness, Human Capital Development, Innovation &
Technology Adoption, International Orientation, Corporate
Governance, Key Men Risks, Family business succession(via Dubai
SME 100 Ranking Initiative)
 SME Sector and Industry (ecosystem approach, access to
finance, information on industry-based business opportunities ,
corporate governance for SMEs,)
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An Agency of the Department of Economic Development – Government of Dubai
The Dubai SME Definition
Trading
Employees
Services
Manufacturing
Turnover
Employees
Micro
<=9
&
< = AED 9 mn
< = 20
Small
< = 35
&
< = AED 50 mn
Medium
< = 75
&
< = AED 250 mn
Turnover
Employees
< = AED 10 mn
< = 20
Turnover
&
< = AED 3 mn
< = 100 & < = AED 100 mn
< = 100 &
< = AED 25 mn
< = 250 & < = AED 250 mn
< = 250 & < = AED 150 mn
&
According to DSC Database:
 SMEs count for 95% of the total enterprise population in Dubai
 SMEs employ around 42% of Dubai’s workforce
 SMEs contribute 40% of Dubai’s value add
An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival (In Any Market)
 Must be hungry enough to achieve at all cost. Those that put in their
savings (hurt money) are arguably more hungrier to achieve.
 Must be determined to get things done. Don’t leave things to chance.
Every action has a reaction.
 Passionate about selling, influencing others
 Not afraid and not shy to seek advice
 Price your products/services/menus carefully with as much information
as possible on the costs in any market space, geography (rent is a killer
in Dubai)
 Design a value- for- money business model
 Develop & enhance domain knowledge of the business idea in that
industry/trade (e.g., retailing, F & B, Printing & packaging, importing
machinery; wholesaling of spices & fruits; etc.) (Chefs turned
entrepreneurs)
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Leadership and Human Capital Development
 Start to build teams; start to develop teams as the businesses
grows.
 Spot talent early, test them, develop them to the next level. Give
them some stake in the company’s growth (ESOPS).
 Set the leadership tone. Define, develop and live the values; live
by example
 Develop leaders that can run the business without you
 Hire someone smarter than you in core business areas – market
development, social media, financial management, operations and
process management, ICT development)
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Cultivating Customers and Suppliers
 Adapt and change according to close customer feedback, and a
believe in Kaizen (continuous improvement)
 Cultivate new customers, retain existing customers who will be your
repeat customers
 Diversify customer base progressively
 Diversify supplier base progressively
 Focus on differentiation, always ask “why would customers want to
buy from us” and “why do customers want to come back to us”
 Make your customers your ambassadors
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Cultivating Customers and Suppliers (cont’d)
 Build and enhance long term partnerships
 Continuously improve products, services and menu progressively
 Test the waters, pilot the new offering, get feedback, improve and
move on.
 Develop the customer database with intelligence details (specific
details on likes, dislikes, tastes & preferences). It is going to be
your key differentiating asset!
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Business Learning and Knowledge Building
 Don’t stop learning, you do not have monopoly of knowledge
 Beware of the competition, be thankful for it to spur you out of
complacency and to innovate to differentiate.
 Constantly think of improving productivity – doing more with
less
 Develop the ability to spot trends and emerging market needs,
not just tracking changing customers’ tastes
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Business Relationships and Networks
 Join a support network group – share experiences, share referrals,
share networks, share solutions, share joys and tribulations. It
helps to develop your business personality & character.
 Learn from other entrepreneurs in different businesses and
industries (e.g. F & B firm learning from a logistics firm)
 Learn from the business failures more than the business successes
 Benchmark where it makes sense for measurable business
dimensions for example; - customer turnaround time, employee
satisfaction, pricing and merchandising.
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Financial Management
 If you are raising funds through equity capital, always remember
that investors enter your business to exit at some point (they
seek profits)
 Develop the habit of sound financial management from Day 1.
Document every single invoice, transaction, expenditure line by
line. If you can afford in the early days, hire a part-time
accountant to tidy the books, and do the matching/balancing.
But master to some degree the importance of business finance.
Remember, your financial story is your business story.
 You should work towards making your business very bankable
and investable at all times.
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
 Don’t forget to budget for losses; have a plan B, plan C to derisk the venture as much as possible
 Do all you can to ensure timely payments from customers, as
lack of a cash flow can kill (have a dedicated process to remind
clients’ of payments, build into contracts upfront partial
payments, do some background checks of the financial health of
clients, etc;)
 Separate personal from business accounts. Factor in your
time/skills/effort as compensation / salary in the accounts at a
reasonable stage of the business growth (2nd /3rd year)
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Business Protection and Risk Management
 Start thinking about how to protect your business, and the wealth
being created, and how to use it wisely for expansion and asset
enhancements. Spend on your rewards, after you have set aside
the savings for future productive investments
 Plan for your eventual or sudden exit – have a succession plan,
have a business continuity plan (BCP). Evolve the plan as the
company grows.
 Insure the business and the key management team (loss of a
member can be damaging)
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
Conclusions
No one formula for success - every case, every business model,
every entrepreneur, every business, industry and economic context is
different
Find your niche, determine your differentiation in the market
Once started, don’t stop. Focus, focus, focus! Adapt, adapt, adapt
Build the business, the company, and eventually the brand
Don’t stop learning
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An Agency of the Department of Economic Development – Government of Dubai
Strategies for Survival
If your business survives the first 1,000
days, chances of stability and future
growth prospects are much better.
Profit – positive within 5- 8 years
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An Agency of the Department of Economic Development – Government of Dubai
If they can do it, why can’t you?
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An Agency of the Department of Economic Development – Government of Dubai
- End Thanks
Discussion
An Agency of the Department of Economic Development – Government of Dubai