SMEs see bright road ahead

Sanobar Sabah /
Special to Emirates Business

Shrinking employment opportunities across various sectors in the UAE are triggering greater interest in entrepreneurship, say experts and local entrepreneurs. This appears to be
the case among nationals as well as expatriates.
“People are inspired by the success of startups with disruptive business models, and by internet-powered businesses which have managed to successfully scale-up using new technological resources that were never there before,” Sana Bagersh, Founder of Tamakkan, CEO of BrandMoxie, told Emirates Business.
However, issues that affect the growth of small and medium enterprises (SMEs) like late payment, lack of flexible funding options, high rents, high cost of staffing etc. continue to pose major challenges. This, however, hasn’t dampened the passion of
go-getters who offer their own suggestions to boost a SME-friendly ecosystem here.
Little Majlis, a local, online creative community and specialist marketplace for hand-made, artisan and boutique products, is four years
in the running and is keen to expand. Like other entrepreneurs, Anna Bolton-Riley & Annabelle Fitzsimmons, creators of Little Majlis, vouched for a one-stop institute
that provides easy access to information related to funding, legal regulations, training and networking – issues that are of utmost importance to any start-up.
In fact, the lack of a legal framework and the relatively high set up cost for SME’s in the region led to the establishment of Little Majlis. “We wanted to create a platform that allowed small businesses to try their products and grow their business at low cost, within a supportive and like-minded environment.’
Maria Inglis, co-owner of Advantage Sports UAE, who has successfully run fitness programs for five years, is also eyeing expansion. However, according to her, “it is very expensive to recruit, employ and retain good, qualified professionals for a 2-year period.” Maria says intensive research, knowledge of the local market and competitors and conducting comprehensive market feasibility are needed so that there are no surprises along the way for wannabe entrepreneurs.
“The rising costs in general are a major handicap for any SME,” said another entrepreneur who chose to remain anonymous. He has been supplying equipment to banks, foreign exchange centers and other larger companies for 11 years.
“Different rules and regulations in different emirates make it harder to operate locally. Having a centralized, federal system would certainly help avoid confusion and provide unified rules of operation. This will make it smooth for companies to work across the emirates,” he opined.
Dubai SME data says that SMEs account for 40 percent of Dubai’s GDP and 60 percent of the UAE’s overall GDP even as most businesses here are self-funded and several struggle with late payment at some point.
Ursula Winzel, founder and CEO of balcony8 Communication Architects, a multi-disciplinary communications agency in Dubai says it would be wonderful to see procurement system evolve to differentiate between goods and services. “This would certainly go a long way,” Winzel says.
Jahangir Akhtar, founder of SPACEZ, a five-year old contracting and interiors company, stressed the need for an advance payment guarantee. “We need SME-friendly regulations that help nurture the growth of homegrown businesses. At the same time, SME owners here should remain open to diversification if they intend staying around,” remarked Akhtar.
Addressing the issue, Ahmed Al Astad, the director general of the newly established research center in Abu Dhabi, Al Istishari Al Strategy Center for Economic and Future studies, said bigger organizations tend to take more time in delivering payments because of their internal approvals. “The idea of a credit bureau or an official body that lets banks to take decisions on obligers quickly has been floating around for a while. It would be great to see that materialize soon,” Al-Astaad said.
Rise in entrepreneurship in the UAE is also evident in ancillary industries such as consultancies and networking meet-ups. Founded by Bagersh in 2009, Tamakkan is an entrepreneurship organization in Abu Dhabi that conducts free monthly seminars open to all entrepreneurs offering them opportunity to network and receive professional advice.
Some, like Inglis of Advantage Sports, opt to enroll the support of organizations like Nexus Business Services. The initiative is the brainchild of the UAE’s youngest entrepreneur, Souad M. Al Hosani who set up the organization with the sole purpose of providing a ‘one stop shop’ for anyone who wanted to set-up their business or relocate to the UAE.