The UAE is a burgeoning economy. The UAE has the most liberal trade regime in Gulf. For almost 40 years, it has been an open economy with high per capita income and high annual trade surplus. Today, the UAE is home to many start-ups and multi-million-dollar conglomerates. The strategy it has used to grow into a cosmopolitan, global hub over the past decades can teach entrepreneurs some valuable lessons.
Here are a few valuable lessons that entrepreneurs can learn from the UAE model:
Diversify your income stream –
UAE has been bold and strategic about expanding to a wide range of business sectors. Maintaining multiple streams of funding is how they are able to avoid excessive dependence on any single revenue source and ensure stabilizing their financial positions thereby reduce the risk financial crisis. Diversification of your revenue streams is a good way to achieve this.
Dubai in particular is a great example. The Emirate has significantly less in the way of oil reserves compared to Abu Dhabi, and given its ambitious nature, this meant there was more urgency to build up other sectors for revenue and growth. As a result, Dubai saw a growth in real GDP of around 9% per year between 2000 and 2013, compared with a GCC average of 5.6%. Dubai nurtured trade, construction, finance, real estate, tourism and manufacturing, while its exports grew at an attractive pace.
Decide your business activity beforehand –
When you decide to do business in UAE, you need to know that there are certain limitations. Not all business activities are allowed in the UAE. Various approvals are required before you start your business in Dubai. Hence you need to get the right information to know whether your business fits in as per the UAE standards. A business consultant can help you decide or assist you with possibilities and limitations available in UAE.
Identify the right jurisdiction –
Business jurisdictions in UAE are segregated by Emirates. By choosing the right jurisdiction it can increase the competence as well as the productivity of a business. Dubai offers mainland business setups, free zone company formations, and offshore business establishments. Opting for the right jurisdiction depends on the business activity and the nature of the business you would like to conduct.
Ask the right questions before you start –
Too many startups overestimate how much demand there will be for their product or service. Even though you have anticipated it, it is not sure that the product or services you are going to offer will be accepted by customers. Hence the most important questions to ask are:
- How large is your potential market?
- Who are your competitors and do they have similar products or services?
- What part of their business model can you improve upon?
In such scenarios, a business consultant will not only will assist you with market research and data but also can help re-create and improve your financial and business model.
Opportunities are key to success –
There are lots of good start-up ideas, but new entrepreneurs will find success from opportunities where they have a special advantage. They need to find some non-obvious insider knowledge about a high-value problem. An entrepreneur needs to understand what it would take to build an MVP (minimum viable product) – the cheaper the better. Most importantly, you need customers; as long as you are building and planning, when you just have an idea; once you can get someone to pay for the product, then you have a startup.
Managing your money –
In UAE, managing your money extends way beyond your business. After all its naturally default position out here to spend. There are many fantastic ways to spend your money; same applies to your business spending too. The Association of Chartered Certified Accountants found in their study that 82% of startups fail as a result of poor cash flow management. Having a financial model and structure, prior to starting a business is highly recommended as it gives you a clear picture about expenses and incomes.
Adapt to change –
In a fast-changing world, if your business does not adapt, and embrace changes you will fall behind. The UAE not only knows that, but also has adapted it in its government strategies. The country embraces the latest technological advancements such as incorporating drones in government services, appointing a Minister of State for Artificial Intelligence, as well investing in infrastructure, while providing a tolerant community that is home to more than 200 nationalities who reside here. The UAE has also embraced social media, and its large influence in our lives, and now hosts an annual Social Media Summit in Dubai. The beauty about it is that it is done without jeopardizing the country’s identity, culture, or traditions.
Apply these learnings to your business to succeed and grow profitably.
