#58 - May 2017 by CPI Financial

Comprehensive Leasing Co resized.indd 1

21/05/2017 16:10

LOG ON TO WWW.FINANCEMIDDLEEAST.NET FOR NEWS, POLLS, EVENTS, ANALYSIS, BLOGS, FEATURES, COMMENTARY AND MORE.

ello, and welcome to the latest issue of FinanceME! First of all we are thrilled to announce the winners of this year’s Business Vision Awards. Please turn to Pg 46 to find out more! Our cover story for this issue features Hesham Hussain Abou Jamee, CEO, of Saudi-based Alistithmar Capital, and he discusses the financing options available to businesses that include SMEs, the challenges and opportunities facing the Saudi business landscape, and future developments of the company in support of the Government’s Vision 2030 (Pg 18). One opportunity provided by Saudi is for home-grown brand Operation Falafel to enter market via franchise agreements. Manhal Naser, CEO, of parent company Awj Investments, discusses what a business owner needs to know if they decide to enter an agreement with a franchisee (Pg 38). One franchisee who got it right was Mazen Omair, the master franchisee of Fuzziwigs Candy Factory. While already a franchisee of the Subway brand, he wanted to diversify his business interests by investing in another brand. A chance encounter with a TV programme on an old-fashioned candy store, bit of internet research, and a long-haul flight saw him bring the candy concept to Dubai, the first time the brand has moved out of the US (Pg 40). Another UAE local relentlessly pursuing his interests is Omar Sharif AlAli, Head Geek, at gaming store, Geeky Lizard. He takes us ‘Behind the Scenes’ to where like-minded fans have a place to come and enjoy their games and socialise. He is candid about the difficulty he has experienced trying to get the relevant business licences from the municipality, but also how the store plays a valuable role to the members of the gaming community, who may sometimes feel side-lined (Pg 48). Our featured start-up also has a strong focus on benefitting the community, albeit the global community. Pedro Codina just wanted his own t-shirt company. What he achieved is a product that is appealing to look at while a percentage of profits will be given straight back to the community from whence the relevant materials are sourced (Pg 42).

I hope you enjoy this issue!

Read my blog at: http://www.cpifinancial.net/blog/author/112/jessicacombes Follow us on Twitter: @FinanceMidEast and on Instagram: @finance_middle_east

WWW.CPIFINANCIAL.NET

PUBLISHED BY

5 6

NEWS ANALYSIS SME lending–is the worst over? FAST FACTS Ras Al Khaimah economic zone (RAKEZ) launched

FEATURE Diamonds in the rough C7 • M30 • Y80 • K40 PANTONE 871 C

CASE STUDY Surviving in the desert

FACE TIME So, you think you can franchise?

FRANCHISE The candy man can!

START-UP Pocket full of love

AWARDS Business Vision Awards winners announced

VAT WATCH GCC VAT–update

OPINION SMEs and social media

LEGAL FOCUS Cutting ties

CHALK TALK Anthony Tesar

TECH FOCUS The inside job

BEHIND THE SCENES Omar Shariff AlAli

LAST WORD Milking it for what it’s worth

CEO CHAT Alongside Saudi

COUNTRY FOCUS Oman, oil, and its outlook

FEATURE Count your pennies

C45 • M35 • Y30 • K100

Chief Executive Officer ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 4681 Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728

TOP TIPS Top tips to support staff over Ramadan

Chairman SALEH F. AL AKRABI

Sales Director OMER HUSSAIN omer@cpifinancial.net Tel: +971 4 391 5419

Editors JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 WILLIAM MULLALLY william@cpifinancial.net Tel: +971 4 391 3718

SIMON MOTWALI simon.motwali@cpifinancial.net +971 4 4335321

MATT AMLÔT matt@cpifinancial.net Tel: +971 4 391 3716

MOHAMED MAKSOUD mohamed@cpifinancial.net Tel: +971 4 391 5320

London Bureau ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7857 429476

DANIEL BATEMAN daniel@cpifinancial.net Tel: +971 4 375 2526

Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net WWW.FINA NCEM ISSUE 56 I JANU IDDLE EAST.NET RY 2017

The past two yea studies suggest rs of with the next four yea in Sharjah will be rs, the Middle East hub for start-ups. –Sara Al Madan i, Board

Business Development Managers NIKHIL NIDHAN nikhil@cpifinancial.net Tel: +971 4 391 3717

NABILAH ANNUAR nabilah.annuar@ cpifinancial.net Tel: +971 4 391 3726

Chief Designer BUENAVENTURA R. JALUAG, JR. jun@cpifinancial.net

Get the next issue of FinanceME before it is published. Full details at www.financemiddleeast.net

ADVERTISING sales@cpifinancial.net

Data Analyst NADINE ABOUZEID nadine@cpifinancial.net Finance Manager SHAIS MEMON, ACCA, CMA Shais.memon@cpifinancial.net +971 4 3913727

Creative Designer ANA MAKSIĆ ana@cpifinancial.net

Database Administrator RIZZA RECTO INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682

Online Content Manager SIYA PAINAYIL siya@cpifinancial.net Tel: +971 4 391 3722

Administrative Assistant CAROL C. ROSALES carol@cpifinancial.net Tel: +971 4 391 3709

Member, Sharjah Chamb er of Commerce & Director, Rouge Couture

C7 • M30 • Y80 PANTONE 871 • K40 C C45 • M35 • Y30 • K100

+ INSIDE

INSPIRATION IS EVERYWHERE

Administration & Subscriptions enquiries@cpifinancial.net Tel: +971 4 391 4682 Tel: +971 4 391 3709

Making a cha nge Keeping ban ks safe

We plan to grow our businesses 10-fold and quadruple our employee strength to 20,000 by the year 2022. –Thumbay Moideen, Founder President, Thumbay Group

P18

P50

Head Office P.O. Box 502491, Dubai Media City Dubai, UAE Fax: +971 4 390 9576 WWW.CPIFINANCIAL.NET Registered at the Dubai Media City

P16 FME cover issue 57_COLOR.indd 1

3/21/17 9:36 AM

Printed by United Printing & Publishing – Abu Dhabi, UAE © 2017 CPI Financial FZ LLC All rights reserved. No part of this publication may be reproduced or used in any form of advertising without prior permission in writing from the Managing Editor.

NEWS ANALYSIS

SME lending

–is the worst over? With positive first quarter results shown by UAE banks and encouragement by the Arab Monetary Fund, SME financing could be looking up

SHUTTERSTOCK.COM/ALPHASPIRIT

here is a 300 per cent funding gap for SMEs in the Arab world that the banks are not filling, according to a statement by the Arab Monetary Fund (AMF) at the end of April this year. The latest figures suggest that while SMEs constitute approximately 80 per cent of business in the region, it is estimated that one in five has a loan or line of credit. In the UAE, SMEs continue to suffer from a lack of bank financing, said Abdul Aziz Al Ghurair, Chairman of the UAE Banks Federation and Chief Executive of Mashreq Bank in March this year, as he urged banks to extend money to new businesses. There seems to be increasing hints of recovery following a number of low years after a drop in the oil price and a rise in bad debts, according to a report on the UAE banking sector released by global consultancy Alvarez & Marsal released in late April this year. While the profitability of UAE banks has taken a hit, the industry remains in better shape than its global peers, according to the report. But also the drop in oil price contributed to an increase in borrowing by governments to reduce their deficits, it increased the level of debt defaults. These defaults were felt acutely within the SME sector.

If the first quarter results posted by a number of UAE banks are an indicator, a revival in lending could be imminent. Two of the country’s largest lenders, National Bank of Abu Dhabi (BBAD) and Emirates NBD (ENBD) showed an improvement in non-performing loans. NBAD’s first quarter profits, which include those of FGB with which it has merged, rose 12.4 per cent. Net profit rose to AED 2.93 billion, up from AED 2.6 billion in the same period last year. Emirates NBD’s profits improved to AED 1.87 billion as opposed to AED 1.8 billion in the same period last year–a 3.6 per cent year-on-year increase. “Our consumer business, in both retail banking and wealth management, grew by 10 per cent in the first quarter of 2017, beating our expectations. This growth is on the back of our growing market share in all customer segments, whether high net worth, mass affluent or small and medium enterprises (SMEs), and strong volume growth in all products, both liabilities and assets,” said Suvo Sarkar, Senior Executive Vice President & Group Head–Retail Banking & Wealth Management at Emirates NBD. There is great opportunity for banks and other financial institutions in the Arab region to increase lending

to SMEs, which will consequently help create jobs and reduce unemployment, the statement by the AMF continued. “As oil prices have improved slightly from the lowest levels recorded in the recent past, and with the overall economy showing signs of recovery, there is some truth in the SME industry making a positive rebound. However, there are still concerns that need to be addressed. SMEs are still facing issues in garnering their receivables from their customers, which continues to create risks of debt. Due to SMEs facing delays with their receivables, many of them are finding it difficult to manage their cash cycles, which might land them into trouble with Banks,” said Usman Khakwani, Head of Business Banking, Noor Bank. He added that despite taking a hit in 2016 on provisions, banks are continuing to cautiously finance SMEs which have shown signs of improving their business cycles. The UAE Government has taken measures to improve conditions in the SME sector, most notably by approving and passing the UAE Bankruptcy Law late last year. The law put a moratorium on criminalising bounced cheques to encourage SME owners to remain in the UAE and solve their financial difficulties by restructuring their debts.

WWW.FINANCEMIDDLEEAST.NET

BUSINESS CONFIDENCE IN MIDDLE EAST HITS HIGHEST LEVEL SINCE 2015

FACTS YVOLV EYES $7.5 BILLION MARKET POTENTIAL IN KSA Yvolv has signed a partnership agreement with the Department of Information Technology & Communication (DOITC), IT integrator in the Kingdom of Saudi Arabia and multidimensional IT service provider. Yvolv, a JV company by Alibaba Cloud and Meraas, will service its Saudi customers through its collaboration with DOITC, in order to support the country’s digital transformation journey and digital commerce evolution. As Middle East and North Africa public cloud spend is projected to hit $2 billion by 2020, according to the latest Gartner report, KSA represents one of the most strategic markets for Yvolv, encouraged by the latest developments in Saudi Arabia’s Draft Cloud Computing Regulations. “Small and medium businesses are usually the early adopters and we see them proactively migrating from their existing IT infrastructures towards cloud computing solutions. One of the key reasons for them to embrace the digital transformation is to reduce unnecessary costs while improving their bottom line and increasing their business efficiency,” said Fahad Al Hajeri, the CEO of Yvolv.

BAHRAIN UNVEILS NEW LAW TO SUPPORT GROWING FINANCIAL SECTOR Bahrain has become the first country in the GCC region to introduce an Investment Limited Partnership Law and integrate it in the country’s legal system. The new move allows investors to establish limited partnerships nationwide, as oppose to only in identified free zones. The law offers new financing structures that complement the existing opportunities available in the Kingdom. It is expected to provide a strong boost to the financial sector, supporting growth in real estate funds, private equity funds, venture capital and technology funds, start-ups, and Shari'ah-compliant funds, as well as captive insurance. “We see great potential in the GCC for investors looking for strong returns– and the development of the local funds industry can play an important role in facilitating that investment. These reforms will provide a strong boost to the sector, support growth in a number of areas and help to make Bahrain a highly competitive location for those looking to access the opportunities around the Gulf,” said Khalid Al Rumaihi, Chief Executive of the Bahrain Economic Development Board (EDB).

Business confidence in the Middle East rebounded strongly in the first quarter of 2017, in line with a substantial global increase, according to the latest edition of the Global Economic Conditions Survey. The quarterly survey of global CFOs and finance professionals, conducted by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), has found that economic sentiment has been spearheaded by an increasingly confident outlook in North America and is reflected across leading developed and emerging markets. In particular, there has been the fastest rate of growth in global trade since 2015. “The rise in confidence, combined with strong economic hard data, offers genuinely encouraging signs for the global economy: with an increasingly optimistic mood in the US and a stimulus-led recovery in China driving prospects for world trade. The Middle East has seen an encouraging up-turn in our confidence levels and in government spending. The UAE in particular has performed well due to our sizeable non-oil sector and strong fiscal position, which allows us greater protection from falling oil prices,” said Lindsay Degouve de Nuncques, Head of ACCA Middle East. The confidence increase in the Middle East is due in part to the recent recovery in oil prices, and the region is likely to benefit from the resultant easing of fiscal austerity. The UAE in particular continued the trend of performing markedly better than other countries in the Middle East, with the survey indicating an increase in confidence, government spending and employment.

30%

SHUTTERSTOCK.COM/ TRABANTOS SHUTTERSTOCK.COM/GST

RAS AL KHAIMAH ECONOMIC ZONE (RAKEZ) LAUNCHED The government of Ras Al Khaimah has launched the Ras Al Khaimah Economic Zone (RAKEZ) to oversee, regulate and consolidate the services, facilities and zones of Ras Al Khaimah Free Trade Zone (RAK FTZ) and RAK Investment Authority (RAKIA). “We will be able to offer a greater portfolio of services that can be customised to suit all different types of businesses from a start-up to an established business across a number of industries–from manufacturing to trading or industrial businesses–and we can customise the solutions. It’s no longer a case of ‘one-size-fits-all’. We are also enhancing all of our services across many different platforms; we are focusing on efficiency and simplifying our processes to make it easier to do business. Our partners will be able to access many facilities online; that is our next level of service enhancement,” said Ramy Jallad, Group CEO of RAKEZ, RAK FTZ and RAKIA. He added that all government and private stakeholders are fully supportive of the launch of RAKEZ and have been cooperating in an effort to provide a seamless service to clients, and to ensure that their businesses continue as usual.

FAST FACTS

TIVES’ CONFID ECU THAT PRE ENC X S VEN E E E ION T F IN UA ULAT RA UD G RE

UAE RESPONDENTS CONSIDERED RESIGNING OVER UNETHICAL CONDUCT

BANK MUSCAT AND POTENTIAL LAUNCH ONLINE FINANCIAL LITERACY PROJECT IN OMAN Bank Muscat has signed an agreement with Potential, a pioneer in educational technology, to launch an online financial literacy project, in line with its ‘Let’s Do More’ vision and Imprints social responsibility initiative. Stressing the importance of financial literacy, the bank will target school students, individuals and SMEs. The bank, in association with the Ministry of Education, is set to launch a ‘Little Investor’ programme to educate Omani children on the basics of financial literacy. The aim is to motivate children to develop entrepreneurial thinking and skills from an early age. Taking the financial literacy programme to a higher level, the bank’s Management and senior officials will also provide financial advice and guidance to SMEs. The bank, in association with the Public Authority for Consumer Protection (PACP), has launched an awareness campaign on prudent savings and spending habits. All these initiatives reiterate the bank’s commitment to promote financial literacy at all levels and thereby create a lasting Imprint for the nation through sustainable development. “Financial management is the key to a strong foundation for success in life. The skills acquired through the programme will help participants to judiciously manage their finance and thereby make valuable contributions to the nation,” said Ahmed Faqir Al Balushi, Deputy General Manager– Human Resources, Bank Muscat.

32%

UAE RESPONDENTS FELT PRESSURED TO WITHHOLD INFORMATION ABOUT MISCONDUCT

UAE RESPONDENTS ARE AWARE OF WHISTLEBLOWING HOTLINES

42%

UAE RESPONDENTS THINK REGULATIONS HAD A POSITIVE IMPACT ON ETHICAL STANDARDS

74%

UAE RESPONDENTS BELIEVE PROSECUTING INDIVIDUALS WOULD HELP DETER FRAUD

Source: EY biennial Europe, Middle East, India, and Africa (EMEIA) Fraud Survey

WWW.FINANCEMIDDLEEAST.NET

TOP TIPS

Top tips to support staff over

Ramadan

Samer Al Isis, Poltrona Frau Group ME, says productivity can remain over Ramadan by continuing to be sensitive to the mental, physical and psychological needs of staff

Communicate with your employees It is important to communicate with your employees prior to and during the Holy month to discuss ways in which you can support them and achieve maximum productivity. Different personalities are motivated by different management styles, having a conversation with a staff member in advance to consider what measures both parties can take to keep performance levels high can help both you and your staff better understand how to adapt. Plan major work activities in advance Corporations should consider planning for Ramadan prior to the Holy season, not only with employee task lists but with the business model itself. Factoring in necessary inputs for smaller tasks when taking on new projects or business months in advance are often worth it. The power of pre-planning and effective time management can help compensate for hours lost during the Ramadan period. Providing your staff with informative guidance on their major tasks and responsibilities can help keep productivity stable. Support, sensitivity and participation Educating other employees in the company who do not participate in the Holy month to be sensitive to fellow employees can increase support and morale. Sending out an office newsletter or hosting a team meeting to inform all staff about the prayer timings, fasting timings and practical ways in which they can

be sensitive to those fasting can demonstrate your support to your employees and help build stronger relationships between them. Create an office ambience that embraces diversity It is important to respect, encourage and celebrate employees across all religions. Hosting a team Iftar or a corporate celebration of Eid not only contributes to the team-building, but increases productivity and improves employee relations in celebrating the diversity in oneâ&#x20AC;&#x2122;s team. Encourage team members to participate in the Holy monthâ&#x20AC;&#x2122;s philosophy in finding new ways to help one another to create a positive work environment. Establish clearly defined targets Motivate your team to do their best, setting targets that take the season into consideration and are measurable and achievable during the Holy month can often help a team to stay consistent and even prove as a healthy distraction. Ensure that these targets are reasonable and not high pressure whilst still impacting the overall quarterly or yearly performance positively. Encourage employees to utilise the early hours of the morning Morning hours are usually the most productive during the Holy Month. As the level of concentration tends to go down during the fasting hours, keep employees more focused by encouraging them to prioritise important tasks earlier, one at time rather than multi-tasking in later hours of the day.

VAT WATCH

GCC VAT-update

As businesses await the finalisation of the tax law, preparation can start being made in some areas, while others remain unclear

The VAT Law • VAT is set to be implemented across the GCC on 1 January 2018. • UAE VAT law is currently being finalised, and will be published once approved. • Companies can register for VAT from 1 October 2017, and can do so online. • Companies are likely to be expected to file returns every three months. Source: The Ministry of Finance

SHUTTERSTOCK.COM/HAPPYSTOCK

SMEs • The Ministry of Finance has declared that companies with revenue over AED 375,000 should register for VAT during Phase One and companies with revenue over AED 187,500 have an option to register. The threshold of AED 375,000 translates into business of around AED 1,000 per day and so there would be few businesses below this threshold. • A large number of these SMEs do not maintain accounts and records and the Ministry of Finance has specified that companies registering for VAT will have to maintain proper accounts for a period of five years–companies above the threshold have to ensure that they start keeping proper records as soon as practically possible. • Companies which fall below the threshold but above the voluntary registration level should decide whether to register based on the suppliers they deal with and their customers. If their suppliers are mostly VAT registered, then all their

inputs will anyways be VAT charged so unless they register, they would not be able to avail the VAT input credits and shift the burden of VAT on their customers. Source: Rakesh Pardasani, Partner at auditing and tax firm, RSM

Exemptions • VAT exemptions will apply to 94 food products, as well as the healthcare and education sectors, which means that in the absence of price hikes grocery, hospital or school bills will most likely remain unchanged. • VAT is will be levied on non-essentials, electronic items, home appliances and other big-ticket goods. Source: Ministry of Finance

Tourism • Goods, such as perfumes, makeup, luxury bags and big-ticket items purchased by visitors in the UAE will not be exempted at the point of sale. • It has not been confirmed if tourists

will be given the option to obtain a tax refund as observed in other countries. Source: Ministry of Economy

Other taxes • The UAE Government is exploring other tax options, in line with global best practices, which are unlikely to be introduced in the near future. The UAE Government is not currently considering personal income taxes. Source: Ministry of Finance

Other considerations • Goods can be held in a bonded free zone, such as Jebel Ali, before they are duty paid. Such goods will remain VAT-free until they are removed from bond. Any sales of the goods prior to the point where they become duty paid will be VAT-free. • Cash flow will be impacted by VAT because there is no clarity regarding how long the refund processes will take. At any one point a business will either owe money to the government or wait for a refund. • There is very little time for businesses to become VAT-compliant because they face a number of different obstacles. They need to have an implementation plan in place so they can hit the ground running immediately.

Source: Brian Conn, VAT partner, BDO UAE, Saudi Arabia and Kuwait.

WWW.FINANCEMIDDLEEAST.NET

OPINION

SMEs and social media Zeina Abdallah, Managing Director, fishfayce, looks at ways SMEs can create content that is engaging whilst growing their brand

he internet has transformed the business world into a constant companion for the cosmopolitan customer, making the closest screen a primary market for most. With the rapid takeover of social media, it has become less of a marketing opportunity and more of a marketing necessity. Social media content marketing can prove to be a pertinent marketing tool for SMEs, with smaller budgets for campaigns, and there are a number of ways for them to take advantage of this pocket of the marketplace. A strong social media strategy can prove to be an asset to SMEs in evolving customer relationships and increasing brand awareness. Staying true to a brandâ&#x20AC;&#x2122;s identity in the details such as colour, mood, and even the formality of tone can help shape the perception of brand in the mind-sets of the masses. Producing genuine, consistent content

is likely to help build a community of loyal followers. Consumers are less likely to repost content that they feel is not legitimately relevant to the brands identity. Choosing which platforms suit the brands needs is a key in maximising oneâ&#x20AC;&#x2122;s social media potential. According to data from digital marketing consultancy, Zephoria, top brands post 4.9 times per week on Instagram, enabling them to remain at the forefront of their customersâ&#x20AC;&#x2122; minds; as one of the largest media platforms, Facebook is ideal in helping a brand reach a larger number of consumers; users are more likely to purchase from brands they interact with and follow, making Twitter an effective source for customer feedback in real-time. For SMEs whose core focus is B2B, LinkedIn is ideal for networking and finding business partners, while

YouTube is ideal for demonstrative products or services, creating engaging content and building brand awareness. Pinterest is one of the fastest growing social media platforms and is a great tool to circulate, share and collect ideas for content creation purposes. It also helps build creative insights into how to generate content across other platforms. The DIY market on Pinterest also makes it a hub for start-ups, whose core business is tangible products, to showcase their stuff.

UTILISE YOUR BUDGET One of the main problems SMEs face is sourcing and allocating marketing budgets. Over the years marketing tools have evolved but the objective has always remained the same: getting people talking about our brand. Word of mouth remains one of the most

SME owners can put the 'social' in social media by taking advantage of a two-way dialogue between them and their customers.” – Zeina Abdallah, Managing Director, fishfayce

coveted, effective marketing methods and prior to social media, was often very expensive to generate. Finding cost effective methods of advertising and drastic PR stunts are a challenge faced by most SMEs. For an SME owner to leverage their budget to reach their audience with social media is not just a cost-effective alternative but acts like a steroid to word of mouth marketing. With a small ad spend and adjusted demographics, SMEs can quite literally reach an entire region with their fingertips. With the lack of red tape and restrictions, small businesses can be creative in producing original, locallyrelevant content that pays attention to consumer needs more closely. Using hashtags and specific digital campaigns, SMEs can stand out, bearing their brand’s integrity, and brave the social media unknown. Platforms such as Facebook and Twitter, when used correctly

should act as an open-ended focus group for a start-up, where they can test and engage new ideas directly with their customers. It is important to consider lead generation when being creative. Producing content that engages with a customer is great, but to translate the conversation to impact return on investment (ROI), a purchasing platform is ideal. SME owners can put the 'social' in social media by taking advantage of a two-way dialogue between them and their customers. Building a community around a brand on social media not only increases brand awareness but proves to be a great research tool. Data from Zephoria estimates that there are five new profiles created every second on Facebook alone, leaving a pool of customers for brands to dive into. Use social media content to measure likes, dislikes, and follows

and most importantly converse with customers. Following customers and encouraging dialogue over social media not only creates friends of the brand but encourages users to repost and encourage others to engage with the brand as well. Continuously addressing customers and their needs and likes will help to strengthen consumer relations with the brand as well.

HOW SMES CAN STAY ON TOP OF CONSUMERS’ MINDS Become the primary voice of their day 50 per cent of 18-24-year-olds go on Facebook as soon as they wake up. Take advantage of peak times The highest traffic occurs mid-week between 1pm and 3pm. Increase brand presence in their daily routine On Facebook alone there are 1.15 billion mobile daily active users. Source: zephoria.com

WWW.FINANCEMIDDLEEAST.NET

LEGAL FOCUS

Cutting ties

Karin Luzolo discusses the protocols to follow when terminating an employee’s contract and visa, regardless of the company’s size

taff turnover is part of everyday business. Whether an employee decides to move on from a company for personal reasons, or an employer decides the employee is underperforming, the process of terminating a contract is similar when it comes to immigration matters. Once contracts are terminated, employers must cancel the employee’s visa. Before a sponsor can cancel the residency permit of an employee, they must ensure that all contractual obligations have been settled including end-of-service gratuity and due salaries. If in doubt or in case of a dispute, it is best to seek professional advice from a qualified employment lawyer as disputes that go to court could cause both parties financial and emotional distress. Once the employment relationship has been officialy terminated, the employer is required to initiate the visa cancellation process with the respective authority governing the jurisdiction they operate in. For mainland-registered companies, process will be initiated with the Ministry of Human Resources and

Emiratisation (MOHRE), and the General Directorate of Residency and Foreigner Affairs (GDRFA). Companies in free zone areas will be required to process their applications through their respective free zone authorities. Onshore companies operating as mainland entities must cancel the labour card before the residency visa is submitted for cancellation. The time interval between the cancellation of these two documents must not exceed 30 days. Upon the cancellation of a labour card, workers are not permitted to leave the UAE as the original passport is required to complete the residency permit cancellation. Free zones in the UAE will have slight variations to the process and requirements which also translate into differing processing timelines. The respective free zone authority will initiate the visa cancellation immediately without consulting MOHRE, as the offshore immigration process does not require the MOHRE’s involvement, however the process will be overseen by the GDRFA. Across jurisdictions, original documents are required and expat

employees must remain in the country unless they have been abroad for a minimum of 180 days. In cases where employees have been abroad for less than 180 days, they must make their original documents available, including their passports, for out-of-country cancellation procedures through recognised original document couriers. In case of in-country application of onshore permits, employees will not be able to exit the country once the labour card is cancelled. While the timeline for residency permit cancellation varies from one jurisdiction to another, the process usually takes between one to two weeks for standard processing. Once the residency permit cancellation is complete, a foreign national must depart from the UAE or transfer their sponsorship to another sponsor within a maximum period of 30 days. This period will be reduced by the immigration authorities if the residency permit had expired at the time of cancellation. The grace period in this case will be provided on an individual basis. The previous sponsor will be required to return anything that

Before a sponsor can cancel the residency permit of an employee, they must ensure that all contractual obligations have been settled including end-of-service gratuity and due salaries.” –Karin Luzolo, Manager UAE Inbound, Fragomen

belongs to the employee including certificates, papers, or instruments.

REQUIRED DOCUMENTS

Documentary requirements for the employment residency permit cancellation are set by the jurisdiction of the employer and typically include the following: original passport with endorsed employment residence permit; original labour card for onshore companies; original free zone ID card for offshore companies; signed final settlement form declaring the receipt of the end of service benefits and other due payments; visa cancellation application; and the original Emirates ID card. There are a number of factors that employers must consider before initiating the process of residency permit cancellation which may cause delays and hindrances for both the employee and employer. If the termination of a contract involves a disagreement between the two parties and is taken to court, or if the employee has accumulated bank debts or traffic fines, or is involved in a court case with a party other than

the employer, the cancellation process will be put on hold. This may incur a late visa cancellation fine on employers which can be voided or reduced by the GDRFA if the delay is caused by the employee. Moreover, the employer will not be able to release the employment quota until the case is settled and the residency permit has been cancelled. Other delays may arise if the employees sponsor family members in the UAE. In such circumstances, dependent visas must be cancelled before the principal visa can be cancelled by the employer. Certain jurisdictions also require that companies provide evidence of employee departure or sponsorship transfer before allowing for the visa quota release. If the relationship was not amicable and the individual is not cooperative, this supplementary requirement could result in further delays. In some circumstances, authorities may accept exit/entry reports from the GDRFA reflecting the expat’s immigration status to support the visa quota release process. If an employee is moving within a free zone or from one free zone to

another, companies may consider a sponsorship transfer rather than going through the standard cancellation process. For employees, this means the visa is not cancelled which can help make the application for a new visa easier and dependent visas will remain intact, saving the hassle of cancelling all visas. From the sponsor’s perspective, if the transfer is within the same free zone, the employer will be removed automatically from the system and the visa quota can be retrieved without providing evidence of visa cancellation. The downside to this approach however is that the speed of the transfer process depends on the cooperation of the new sponsor. Another considerable factor is the bank guarantee. Every employer pays an initial, refundable bank guarantee towards an employee’s employment residence permit application. Any bank guarantee paid against the employment residence permit can be retrieved after cancellation of the visa and full immigration file closure from the employer’s records at GDRFA. Methods of refund however differ from jurisdiction to jurisdiction.

WWW.FINANCEMIDDLEEAST.NET

CHALK TALK

I recruit people because of their skillsets, and what a difference that has made. â&#x20AC;&#x201C; Anthony Tesar, CEO, Le Beck

ANTHONY TESAR

The CEO CEO of of security security consultancy, consultancy, Le Le Beck, Beck, knew knew nothing nothing about about starting starting aa The business, but but focusing focusing on on clients clients and and hiring hiring the the right right people people from from around around business, the world world has has seen seen itit grow grow the

oth my parents are Austrian and I was born in the UK where I grew up and went to school. I joined the military rather young, before going to university. At that time, in the 80s, the British Government and the military ran various projects to find the leaders of the future and they took the top five per cent of all recruits within that year and put them on a special training programme. The programme ran for a year and a half, rather than the standard few months

of basic training, to develop individuals from an educational, a physical fitness, and a leadership point of view. I went through this programme. I was part of a small group of people that were fast-tracked through the system thereafter because we were seen to be capable enough to be promoted quite quickly. The programme only lasted for a couple of years, but I was fortunate enough to be part of it. I did my special forces, commando, and paramilitary training. I was a diver,

and I learned how to fly helicopters and planes. Afterwards I moved into bomb disposal, starting off in normal explosives and incendiary devices and that moved into a niche area of nuclear, chemical and biological devices. There was a natural progression to move into working with several major intelligence services around the world. Because the UK and Britain was, and still is to a certain degree, the premier country in dealing with terrorism, we were sort of â&#x20AC;&#x2DC;on loanâ&#x20AC;&#x2122;

around the world, depending on which government had problems. I left in 2000 because I was just about to be put behind a desk. I was far too young and ambitious to work a desk, and one of the downsides of being fast-tracked is getting to the stage where you’re not allowed to be operational anymore because of the rank that you’ve reached and what you’ve achieved. A lot of money had been spent training me and I was still young, fit, and eager. I decided to set up a counterterrorism advisory service. I set up the company in August 2001 and sent out an email to all my connections around the world saying I had moved into the commercial sector and if anything comes up, please let me know. One month later, 9/11 happened. Two months later, I was in the US training up their special forces and intelligence community on counter-terrorism techniques and methodology and modus operandi of these groups. I was then recruited by the United Nations as one of the weapons inspectors to go into Iraq. There were 70 inspectors who went on the ground and did the job; most of them were scientists, physicists, biochemists or nuclear physicists. They were to identify where the weapons were being produced because they would understand what would be needed to achieve that, or produce that bio agent or chemical agent for that device. Our job, two other people and myself, was to diffuse it,

neutralise it, and disarm it and make it safe. In 2004 I was recommended to help a major client out in Saudi Arabia–SAMBA financial group. They needed advice and assistance on how they could look after their expat employees, how they could improve the security of their facilities and banking infrastructure, and I was called in to help them. That started my life within the Middle East region. Within six months we set up a complete entity within Riyadh and within six to 12 months we had some of the top 10 banks in Saudi Arabia as clients. Four years later as things started to calm down, we relocated into Bahrain which is our regional head office for the whole of the GCC; we still have offices in Riyadh and Jeddah. When I came out of the service and started the company, I had no idea about running a business. The guiding factor for me was asking how I would like to be treated as an individual. I made the decision early on that I did not care what I did but I asked what I would like someone else to tell me if I was sitting on the other side of that desk; how would I like to be treated as a customer? I’m not decrying the need to get an MBA but I did not need to have that. It’s not for everybody. I wasn’t lacking in leadership capability; I did not have the nuance of working in the corporate world, but using the analogy of asking how I would want to be treated filled that gap perfectly. One of the other elements I considered was that I did not want to build an organisation full of ex-intelligence. I wanted people who were excellent at what they did. My financial director needed to be a fantastic accountant and that is what I looked for. Every person in the organisation is a specialist at what they do. We actually do not even live in the same place. My PA is based just outside Johannesburg. I see her, physically

face-to-face, twice a year for a month. Everything is done via Skype, email, WhatsApp, and she completely runs my calendar and diary and organises everything from South Africa. The accounts department is in the UK. I have analysts situated from Chicago to Doha, and Sweden, all the way through to Perth, Canberra, and Sydney, Australia. We are spread all over the world. We’re a very forward thinking company. I do not recruit people to come to me, or because of where they are geographically; I recruit people because of their skillsets and what a difference that has made. Nobody punches in or punches out, everyone has their own schedule. Some people are morning people, some people are night people. They have their deadlines and as long as they meet them, I do not care what they do and because of the locations the team lives in, the company then has 24-hour coverage. As I started to grow as an SME, I started to recruit better people who can start taking the workload off me. I’ve noticed a huge difference in my time–not that I’m working less but I’m focusing on the areas I should be working on and I let other people get on with the other things that I do not need to be involved in with at the moment. I’m very excited about where we’re heading. We have an investment from our Saudi partners which has given us the next step up to become a medium-sized company. We have a plan to develop very aggressively over the next five years. As a CEO, my ultimate goal is eventually to be in a position to step down and move into a chairman role. Also, becoming the chairman would allow me to focus more on the vision and the strategy, which I love doing, and have someone else to run the day to day operations and I can spend more time with my family. The kids will be grown up and hopefully by then we will have grandchildren.

WWW.FINANCEMIDDLEEAST.NET

CEO CHAT

The government has now established a dedicated SME Authority to enable the youth to explore and venture into entrepreneurship by eliminating obstacles and facilitate funding. â&#x20AC;&#x201C; Hesham Hussain Abou Jamee, CEO, Alistithmar Capital

Hesham Hussain Abou Jamee

ALONGSIDE SAUDI Hesham Hussain Abou Jamee, CEO, Alistithmar Capital discusses the role the company will play in supporting the Saudi Government to achieve Vision 2030

When was Alistithmar Capital founded and why? Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital) is a Saudi closed joint stock company with a paid up capital of SAR 250 million and is a fully owned subsidiary of The Saudi Investment Bank. In 2007, following the directives from Capital Market Authority (CMA) to all the banks, The Saudi Investment Bank (SAIB) spun off its investment services operations into two separate entities including Alistithmar Capital and SAIB BNP Paribas Asset Management Company. The companies commenced business from January 2008. In September 2011, a revised licence was obtained from CMA after Alistithmar Capital acquired SAIB BNP Paribas Asset Management. We became an all-inclusive financial services company with appealing products for all type and classes of investors. What are some of the biggest challenges and opportunities currently facing the Saudi business landscape? We’re all aware that the Saudi Arabian economy has been challenged by a

severe oil shock. Crude oil that sold for over $100 per barrel in 2014 sold for only $26 per barrel in February 2016. The price has risen to around $50 since June 2016 but remains half of what it was about three years ago. With substantial reliance on oil exports, Saudi Arabia is particularly vulnerable to a price decline as oil revenue paid for over 70 per cent of the government’s budget. Hence, as oil revenue fell, budget deficits have increased and in turn, have impacted expenditure plans. While the Saudi economy is a strong economy with healthy reserves and had the capacity to see off jitters caused by the oil crisis, it was an indication, and the wise leadership appropriately recognised that Saudi Arabia should no longer depend solely on the energy sector as its main source of revenue. It has been my firm belief that Saudi Arabia is immensely capable of diversifying its economy while utilising its vast natural resources, a promising new generation and unique tourism opportunities in pilgrimage as well as historical sites. The Saudi Vision 2030 unmistakably identifies these opportunities and that is clearly a source of my optimism.

The most critical factor to me within the Vision 2030 is the human factor. We have a young population with more than half of the population below the age of 25 years. It is important that we use this to our advantage. The Saudi Vision 2030 sets out goals of improving education to suit market requirements producing quality graduates in various fields. The government is supporting talented youth through scholarships while also aiming that a minimum of five Saudi universities are ranked among the top 200 internationally by 2030. Secondly, SME contribution to country’s GDP has only been 20 per cent. The government has now established a dedicated SME Authority to enable the youth to explore and venture into entrepreneurship by eliminating obstacles and facilitate funding. This will have very positive implications. Another important factor is the private sector contribution. Currently the private sector contribution is around 40 per cent of the GDP but the Saudi Vision 2030 has set an ambitious goal of raising this contribution by 20 per cent. Several strategies have also been identified including privatisation of the government sector, establishing cont. overleaf

WWW.FINANCEMIDDLEEAST.NET

CEO CHAT The Saudi business landscape offers a number of opportunities to boost the economy and diversify away from oil. cont. from pg. 19

free zones, opening doors to foreign investors, loosening visa restrictions and offering long-term residency to expatriates. This also would be a very positive step. Saudi Arabia has the holiest Islamic sites in the world and attracts over eight million visitors each year. This number is expected to rise to over 30 million by 2030. The government had already launched a plan to facilitate this through projects such as metro systems, railways, expansion of airports as well as expansion of the holy sites. Hence, tourism is expected to give a significant boost to the Saudi economy. In summary, I would reiterate that Saudi Arabia has lots of opportunities and with the Saudi Vision 2030 it also has a clear sense of direction to create a more robust, vibrant and diversified economy. How can Alistithmar Capital step in and assist? The core-pillars of the Vision 2030

include strengthening the status of the Kingdom as a global financial centre and an international business hub, and this constitutes attracting foreign investments into the economy. To channel these investments, solid investment gateways are required. Alistithmar Capitalâ&#x20AC;&#x2122;s reputation, highly skilled human capital, sophisticated technological platform and exclusive service are the features that make Alistithmar Capital the investment partner of choice to investors. We offer the complete basket of investment products and services that support investment objectives of individual as well as institutional clients. Alistithmar Capitalâ&#x20AC;&#x2122;s products can be applied to SMEs; what criteria does a small business have to meet to qualify for financing from Alistithmar Capital? At Alistithmar Capital, financing to SMEs or any other clients is limited to margin financing for purchase of stocks

in local and international markets. However, in terms of key support that Alistithmar Capital is providing to the SME sector, our Corporate Finance division has been a leading player in Nomu, the second market launched by Tadawul this year, which would list mid and small cap companies and will gradually expand the base of the equity market and enable private sector growth. Alistithmar Capital has been the financial advisor for the two largest companies that listed on Nomu in February 2017 and is working with several other companies aspiring to be listed on this market. What are the plans for Alistithmar Capital over the next five and 10 years, in terms of expansion and product development? Alistithmar Capital has invested heavily in building a sophisticated technological infrastructure and a talented workforce capable to deliver quality services. That has been the

SHUTTERSTOCK.COM/ ANDREW V MARCUS

strategy and we can already witness the results: our market share in local brokerage stands around nine per cent and we rank fourth in the market. The growth over the last three years has been the most phenomenal compared to all the peers; our funds are among the top three performers for the last two years. We launched two equity and two real estate funds in the last two years; we will soon complete subscriptions for a new fund of about $133 million for a 40-floor luxury, high-end building with sky-villas, penthouses and apartments in Al-Khobar. It will be first-of-its-kind project in the Kingdom, very close to the sea—only four metres away; we will focus more on income-generating funds that generate income semi-annually, at seven to eight per cent per annum, which is a good return. We are working to launch a real estate investment trust (REIT); we are also planning to assist people by creating funds for longterm security, for example funds for retirement, child education, etc.

These investments and initiatives will hopefully enable ICAP to perform well over the medium to long-term and be an effective partner to realise the Saudi Vision 2030. We would stick to our values and philosophy and this includes integrity, sustainable performance and personalised customer service. ICAP has always ensured its long-term commitment to clients and taken an ethical and managed-risk approach to investment decisions. Our integrity is our USP. We refrain from getting carried away by short-term, irrational market volatility. This has helped us to create value for customers over the long-term. Our willingness to serve each and every client with attention has been the reason behind the long-term associations that we’ve maintained with our clients. All our high networth (HNW) and institutional clients have direct access to our senior management including myself.

ALISTITHMAR CAPITAL OFFERS WIDE-RANGING INVESTMENT PRODUCTS AND SERVICES TO INDIVIDUAL AS WELL AS INSTITUTIONAL CLIENTS • We have a state-of-theart online trading platform ISTITHMARCOM and have well trained brokers for local and international brokerage services. We also offer conventional and Shari'ah-compliant margin facilities to increase clients’ purchasing power. • Our asset management team is dedicated to deliver returns above client’s expectations and also offer innovative solutions in many asset classes like equity, fixed income, money market and real estate with different strategies (income generation, capital growth etc.) in different markets. We offer mutual funds, discretionary portfolios and customised investment products. • Our talented corporate finance team works to manage initial public offerings (IPOs), rights issues, underwriting of issuances, mergers and acquisitions and Sukuk and bond issuances. • We help our clients to clarify their need and financial goals, create investment strategies and build diversified portfolios. Source: Hesham Hussain Abou Jamee, CEO, Alistithmar Capital

WWW.FINANCEMIDDLEEAST.NET

COUNTRY FOCUS

OMAN, OIL, AND ITS OUTLOOK As Oman moves away from relying on oil revenues, the Government is looking towards the private sector and foreign investment

ntil the 1970s, Oman was somewhat isolated. It’s the oldest independent state in the Arab World, strategically located at the mouth of the Arabian Gulf and rich in oil wealth, albeit fairly modest compared to its neighbours. Unlike other countries in the Gulf, Oman has not faced the same economic pressures caused by Islamist militant activity and a massive influx of refugees fleeing the crisis in Syria and Iraq. However, it has not remained impervious to political dissent from critics of the ruling family. In 2014, Oman had a population of 3.993 million, 43.4 per cent of whom were expatriates. A third of the population lives in Muscat, the capital of Oman. The majority of Oman’s income is derived from oil, but since the 1970s, when Sultan Qaboos Bin Said deposed his father, Sultan Said bin Taimur, and took the reins of power, the country has embarked on a series of economic reforms. Tourism has become an increasing source of revenue and the government is exploring other revenue streams in a bid to diversify away from oil. Oil makes up 44.8 per cent of Oman’s GDP, with non-oil activities at 57.1 per cent. GDP grew by 4.6 per cent between

2013 and 2014, but a fall in the international price of oil has cut deep into Oman’s national income, putting pressure on government revenue and hampering government spending. In 2014, oil production was 945,000 barrels per day. This is, in part, thanks to recent oil discoveries and improved recovery techniques. The services sector dominates non-oil GDP, but industry, in particular manufacturing, accounts for 18.1 per cent and agriculture and fishing account for 1.3 per cent. The IMF predicted Oman’s GDP will expand by 2.68 per cent in 2017, and a further 3.8 per cent in 2018, an improvement on previous GDP projections. This is due to a partial recovery in oil prices, as well as Oman’s successful economic policies. The construction sector enjoyed growth of 8.3 per cent in 2014. It is now worth $5.3 billion of Oman’s GDP. Manufacturing also grew by a modest 0.4 per cent in 2014. Transport, storage and communications also grew by 7.2 per cent in 2014. Omani banks are in good shape. According to KPMG, asset and profit growth is strong and their cost to income fell in 2015, but falling oil revenue

has affected investor confidence and the banks have had their ratings downgraded recently.

EXPANSION PLANS Oil is the biggest single contributor to Oman’s GDP, but oil revenue has fallen and Oman’s oil wells are likely to dry up within 20 years. It’s imperative that the Sultanate finds other sources of income. The Tanfeedh is a five-year plan which aims to reduce Oman’s reliance on oil income from 44 per cent to 26 per cent by 2020. Tanfeedh was launched in 2016. It aims to raise the profile of five key industries in Oman. These include tourism, mining, industry and manufacturing, fisheries, transport and logistics. However, growth in these sectors is unlikely to be straightforward. Plans are afoot for the development for three ports along the coast. Oman occupies a strategic position at the gateway to the Gulf, so there is a market to exploit, but a proposed rail link between the planned ports and the wider region has been put on hold. There are also tentative plans in place for a gas pipeline between Oman and its neighbour, Iran, but the government and financiers are fearful

A public-private partnership initiative is expected to be introduced this year, which should encourage more private sector investment and faster delivery on projects, particularly in the healthcare sector.

of moving forward for fear of causing ripples in Washington. Between 12,000 and 13,000 private sector jobs were created in 2016. The government aim is to repeat this success in 2017. The Tanfeedh programme is supporting 121 projects and initiatives, which will lead to the creation of a further 30,000 jobs. This will add an extra $4.4 billion to the economy. Falling oil revenue has hampered government spending. Budget cuts have allowed the government to reduce public spending by eight per cent in 2016, but spending still exceeded government targets by six per cent. This led to a deficit of $13.8 billion, which was 60 per cent higher than previous estimates. The budget for 2017 is focusing on further reducing expenditure. New taxation is being introduced to increase government revenue. This includes an increase in corporation tax and a new tariff on tobacco and alcohol. The government hopes extra taxation will reduce the budget deficit to $7.8 billion.

The Oman government is also looking at the overseas bond markets and forex trading as a source of extra revenue. In June last year, Oman offered five- and 10-year notes, raising $2.5 billion in additional revenue. In 2017, it is planning more bonds offerings, which will raise a further $5.5 billion internationally and $1.6 billion locally. For decades, Oman was a secretive state, jealously guarding its privacy and operating under near feudal rule. In recent years, this has changed and today Oman is keen to court the private sector and encourage international investment. In 2016, the government launched the InvestEasy portal, which brought 76 government services together in one easy-to-use web portal. As a result, Oman is now ranked 32 in the World Bank ‘starting a business’ category. Capital requirements at incorporation have been lifted and it’s a lot easier to register employees. A public-private partnership initiative is expected to be introduced this year, which should encourage more private sector investment and faster

delivery on projects, particularly in the healthcare sector. Measures like this will further enhance Oman as a place to do business within the international community. It’s an important move in the right direction as Oman seeks build a sustainable economy and further diversify away from dwindling oil revenue. Oman’s economic and political future is uncertain. Sultan Qaboos Bin Said has successfully guided Oman into the 21st century, transforming the country with bold economic initiatives and transforming it from a feudal state into a major power in the region. But Sultan Qaboos Bin Said has cancer, and with no offspring or close relatives, who will succeed him is unclear. There is a real danger than Oman will destabilise when Sultan Qaboos Bin Said dies, which could lead to further problems in the Gulf region.

Written by Marcus Turner-Jones

Turner-Jones graduated from Economics at the University of Sheffield before going on to work for City Index in London. He now writes freelance and spends time between his hometown of Harrogate and Buenos Aires. cont. overleaf

WWW.FINANCEMIDDLEEAST.NET

COUNTRY FOCUS

OMAN

THE SMALL SCALE While certain sectors are expected to perform well in 2017, there are still challenges specific to SMEs, which may hamper their growth

he tourism and hospitality sectors are central to the future of Oman’s economy, and are expected to increase significantly throughout 2017, and hospitality has been earmarked as one of the main industries that Oman will embrace as it looks to diversify its economy, according to Ahmed Al Riyami, Senior Manager–Contracts & LDI Procurement at Oman’s tourism development company, Omran. As such, there are many opportunities where SMEs can be integrally placed to develop the hospitality sector and get directly involved. Many GCC nations are seeking to promote domestic tourism and to attract more international visitors through holding major global events–particularly sporting events, one example being Qatar preparing for the FIFA World Cup, which has a huge impact on growth in the MICE (meetings, incentives, conferences and exhibitions) sector, according to Edward Gallagher, Director of De Boer Middle East. “Oman will be looking to emulate this trend over the coming years with diversification into high value service industries such as events and inbound tourism,” he said.

“The fundamental issue is that there is no strict definition of an SME in Oman. SMEs can register to Riyada and be classified as an SME, but not all businesses are registered to the service. So defining them and registering them as an SME for companies to discover is difficult,” said Al Riyami. He added that another issue is that there is a lack of a central database of Omani SMEs, making it challenging for organisations and businesses to identify an appropriate SME for a contract, because there is no defined list of SME categories. A resource of this type would help expose businesses to a far wider cross section of SMEs to engage their services. Something linked to Riyada may be useful, making SME registration mandatory, with a comprehensive categorisation process being added in. In 2015 it was announced that the Omani Government intended to revise its tenders law and rating of companies to expedite the award of contracts and avert costly delays and would include new rules for the rating of bidding companies and consultancy offices by the government. However, the law which companies are instructed to follow has not been updated to

allow for an SME tendering and award process, which hinders the process of engaging a suitable company, and an update to take SMEs into consideration will address the issue easily, added Al Riyami. The Tender Board is expected to develop a new set of rules or guidance on SME Tendering Law, separate from the main Tender Law. “The Tender Board proposed a list of construction works that can be given to SMEs as part of a main construction contract, estimated at 10 per cent of the awarded contract. This imposes a risk on the project time and costs as the client will have no control on contractor’s internal procurement not splitting work items from the contractor preliminaries. It is also time consuming tendering separate works from the nominated-subcontractor to the main contractor. SMEs have limited knowledge on how to bid for a tender, and this has consequently impacted on SMEs not winning contracts on occasion,” said Al Riyami. Al Riyami added that SMEs need to be developed and trained on how to receive invitations to tender, reading, understanding and making a decision to bid are an important part of winning the job.

SMEs have limited knowledge on how to bid for a tender, and this has consequently impacted on SMEs not winning contracts on occasion.” – Ahmed Al Riyami, Senior Manager–Contracts & LDI Procurement, Omran

current Oman population

44.8%

54.1% Omani nationals 46.1% Expatriates 50% of population lives in Muscat

n ’s G D P f r o m oi

4,550,538

Oman’s reliance on oil income expected to drop from

44% to 222,000 Omanis 26% by 2020

Oman’s GDP expected to expand by Oman’s GDP expected to expand by

2.68% in 2017

worked in the private sector in 2016 The Omani government expects to create approximately 13,000 jobs in 2017

3.8% in 2018

Sources: National Center of Statistics and Information, International Monetary Fund, Tanfeedh, World Bank WWW.FINANCEMIDDLEEAST.NET

MANAGING OVERHEADS

COUNT YOUR PENNIES SME owners need to review their business costs regularly to ensure they do not escalate unnecessarily

mall business owners are generally frugal in the start-up stages, but once their business gains traction, reviewing costs gets sidelined. Even in the smallest business, overhead costs tend to grow, slowly and unnoticed, until suddenly costs are out of control, according to Fahad AlHassawi, Chief Commercial Officer, du. “Office space is a good example of this, and there are a lot of unnecessary costs if an office space is large compared to the headcount of a company. Other examples include insurance and legal costs, as well as IT and cybersecurity costs, which can lead to higher and unnecessary storage costs.” A recent report by the Department of Economic Development (DED) noted that eight out of 10 SMEs in the UAE rely on self-financing for growth and development, making it crucial that they manage their costs and cash flow effectively. There are many causes for the way business costs escalate, especially the overheads costs that do not tend to be

allocated to the final total cost of a product or service category or as a fair share of the total company overhead, according to Vincenzo Natile, Principal of management consulting firm, Value Partners. He added that the reasons are difficult to remedy: unknown hidden costs; lack of accounting processes; underestimation of the total cost of ownership; overlapping processes; and people that do not bring any long-term added value to the company’s goals or mission. “The reality is that companies put so much attention on the direct product costs while often forgetting those that are indirect overheads. However, any company regardless of sector which optimises its overhead-costto-sales ratio by a single percentage point essentially increases its earnings by the same amount. Depending on the industry sector, aligning that ratio to the average sector value, it could impact up to 15 per cent of its earnings,” said Natile. Another expense which can severely affect a business’s bottom line,

especially in the case of an SME is printing costs, according to Pui-Chi Li, Head of Marketing for Middle East and Africa, Xerox. Printing costs represent an average of 15 per cent of a small or medium organisation’s IT budget, which is a considerable amount of money when many businesses aren’t getting the full value from their print infrastructure. “Signs of a lack of print strategy include abandoned documents in the print trays, multiple small devices which have been purchased on an as-needed basis rather than planned, which often results in toners being replaced on an adhoc basis by multiple people in the company. This lack of a strategy and direction quickly results in creeping costs that develop and increase over a period of time,” said Li. After a number of start-up ventures of his own, Mall of the World CEO, Chris Folayan said a major cost point was always staff. As a general rule, SME owners should hire smart and multitalented people to avoid hiring individual operational people for each task.

SHUTTERSTOCK.COM/G7 STOCK

There aa number number of of expenses expenses that that business business There owners need need to to account account for for that that they they may may owners not consider consider in in their their initial initial business business plan. plan. not

There are advantages to hiring individual task operational people but not at the beginning. From the outset the team should know that because the business is start-up, long hours will be required and different tasks will have to be undertaken. The person brought on to handle finance is one such example. With their skills they could also probably assist with deal negotiations, look over legal documents from the financial angle, as well as make suggestions to cut costs. “Hire the right person ASAP. At MallfortheWorld.com the first key person we hired for the region was a CFO. It’s key to get financials reviewed and looked at constantly. You can get someone in-house, or if you cannot afford that, get a part-time CFO to constantly look at your numbers every week,” said Folayan.

Cost management is not only the responsibility of an employer; employees can play a crucial role in managing expenditure. AlHassawi said when employees are engaged they will care more for the business, making them more vigilant to frivolous spending activity, particularly when it is highlighted. Constant vigilance amongst employees is important when mitigating and managing expenditure, as they are often aware of where a business is wasting money. Some of the ways employees can be more careful regarding their contribution to waste and higher costs include being frugal even on phone calls by using the landline numbers first, said Sajith Ansar, Founder and CEO of branding agency, Idea Spice. Companies that have entertainment allowances for clients can have employees think twice on the return on

investment (ROI) of the client before spending this too. Folayan added that another way employees can assist in cost reduction is by multi-tasking and developing job rotation practices; find employees that would like to learn about other parts of the business. Have people in those departments teach other employees on how that department works. By teaching them they will have the opportunity to expand their minds, knowledge and goals within the company. “They will see the company not as a place of work but as a place to grow mentally. Plus forming new friendships is also a great social aspect to corporate happiness levels. Onsite job rotations not only improve staff happiness at work because they are learning, but also provides for more out of the box thinking and an amazing breed of super multi-talented individuals within cont. overleaf

WWW.FINANCEMIDDLEEAST.NET

MANAGING OVERHEADS

The reality is that companies put so much attention on the direct product costs while often forgetting those that are indirect overheads.” – Vincenzo Natile, Principal, Value Partners

cont. from pg. 27

the company willing to step in and help, thus reducing the need to hire more people,” Folayan said.

SUPPLIERS Moving out of the organisation, SME owners can better manage their overhead costs by renegotiating their payment terms with their suppliers. Asking for renewed payment terms and better rates is a good start. Business owners who have not already been doing it should get quotes in triplicate to compare prices for non-specialised services, and looking at new geographies for sourcing is also an option, said Ansar. “Reviewing each product or service you purchase, no matter how small, can be a potential source of savings. Regularly carrying out requests for proposal (RFP) to ensure you get the most competitive rates and best service will also help manage overheads with suppliers. Furthermore, try to reduce the overall number of suppliers you use. For example, instead of having several IT and communication vendors have one that can cater to all your needs,” said AlHassawi. Some of the overheads are usually very standard commodities, basically making the negotiation solely based on price. For other categories, the relevance of the cost of ownership and usage is as important as the acquisition cost, said Nitile. For example, consider two suppliers. Supplier A has a product with a $100 unit price, a delivery time of 20 days and 15 per cent defect

rate and supplier B has one with a $110 unit price, a delivery time of 10 days and seven per cent defect rate. “While supplier A seems the cheaper solution based on the unit-price, if the purchasing manager calculates the cost of ownership of the two different supplies, they would realise that the cost of the goods from supplier A will be $121, including stock and waste, while goods from supplier B would cost $117. Therefore, before deciding which cost-reduction strategies to implement in regards to a company’s supplier, a precise cost-driven segmentation of the overheads spending must be conducted.” When negotiating with suppliers Folayan said there were a number of steps a business owner can take: ask suppliers if they can drop ship the items directly to customers if possible, saving the company the warehouse cost and the depreciation of assets line on their financials; renegotiate payment terms to allow time for selling inventory prior to paying suppliers. In many cases suppliers will be open to negotiations if a business has a proven payment record; negotiate out of the box deals. Finally, Li said the most efficient way of managing overheads is to group costs and reduce the number of suppliers to be managed. This way a business owner can get the economies of scale that come from buying supplies in an organised way and managing vendors becomes much easier.

MANAGE OVERHEADS FROM THE BEGINNING • Be proactive, not reactive. Do not wait for a recession period to overwhelm the company. Create a stable organisation with small teams and control processes to achieve sustainable results. Overheads efficiency could be a permanent competitive factor for the business. • Build visibility and full transparency across the full cost structure. Measure the total cost of overheads by capturing hidden costs, creating a structured accounting system, continuously monitoring the internal time-cost series, and establishing external industry benchmarks to compare with. • Break and reinvent the operational models. On a periodic basis, try to understand and openly question fundamental business drivers for each functional unit, including decade-old standards and policies, business model goals, requirements, and customer-driven priorities. An incremental approach to cutting overhead costs usually has a three-year life cycle and once it is at its end, a company might need a change of business model to jump to a higher level of competitiveness. Source: Vincenzo Natile, Principal, Value Partners

28 bleed

Banker Middle East @BankerMENA

Banker Africa @BankerAfrica

CPI Financial @CPI_Financial

Joinour

magazines

CPIF Contract @CPIFContractPub

WEALTH Arabia @wealtharabia

Twitter! Islamic Business & Finance @IBFmag

FinanceME @financemideast

Watch

out

for the weekly #asktheeditor slots where you can chat on Twitter with our magazine editors

CPI Financial FZ LLC P.O. Box 502491, Dubai Media City, Dubai, UAE Fax: +971 4 390 9756

bleed guide.indd 1

15/02/2017 16:38

DIAMONDS IN THE ROUGH Hiring interns versus employees can be a viable financial option for SMEs while a start-up, in turn, can offer valuable work experience and training

t is likely that 2017 will be a busier year than 2016 for hiring in the GCC, according to the 2017 GCC Salary & Employment Report, published by recruitment firm Hays. The results were compiled from a survey of over 2,700 GCC working professionals, which found that 72 per cent of employers plan on recruiting additional staff over the year compared to the 37 per cent who did so in 2016. It can be challenging for the owners of smaller businesses to know when to hire staff, especially in countries such as the UAE where businesses are responsible for the costs of employees’ residency visas and mandatory health insurance. These costs can put strain on a small company’s already precarious bottom line, but at the same time an SME owner can only achieve so much on their own before business growth dictates that they expand their team. Smaller businesses and start-ups are making use of interns in their companies due to how financially efficient it is–the majority of interns

do not require a visa as they are generally sponsored by their families and so companies are saving about 75 per cent on their recruitment budgets according to Internsme. com, according to Rohan Nathan, Managing Partner of Nathan & Nathan Human Resources. Bringing an intern on board has the potential to be more valuable than simply saving hiring costs. Hiring the right intern–those that are creative, motivated, proactive and enthusiastic learners– can add tremendous value to the organisation by acting as a catalyst for supporting change and growth of the business, according to Arun Prakash, President and COO of mobile video on demand service Vuclip. “By leveraging interns’ immense knowledge of technology to stay abreast of trends, especially in social media, companies are able to stay competitive in a dynamic marketplace.” The hiring and firing process for SMEs can be a very expensive

and lengthy process; having an internship programme enables employers to source local talent from an early stage and can help companies to solve the expense of employee turnover issues, said Sarah Lawrence, Partner, Labour and Employment Practice at the Dubai office of law firm, Squire Patton Boggs. “Interns can often be placed very quickly into organisations giving small businesses the chance to react quickly to fluctuations in work levels. Companies then have the option of recruiting full time employees from interns who have been tried and tested and who have already started to understand the company’s culture, values and expectations. Longer term internships can also be used to ascertain whether a particular role has longevity,” said Lawrence. She added that an internship programme is a year round recruitment tool giving SMEs continuous and immediate access to great candidates for full-time

WWW.SHUTTERSTOCK.COM/RAWPIXEL.COM

HIRING INTERNS

to track their delivery.

WWW.SHUTTERSTOCK.COM/RAWPIXEL.COM

While businesses can provide interns with experience and mentoring, interns can bring a fresh perspective to the table.

roles in the event that there is an upturn in workloads. While the wage requirements of interns are modest, interns are often the most highly motivated members of the workforce. However, unless the right intern is found and the business owner has a clear plan for them, then there are really few benefits from taking them on, warned Ian Hainey Managing Director of PR agency, IHC. “Anyone thinking it’s just a convenient source of ‘cheap labour’ is heading down the road to a false economy, as having an intern on board can actually add work, since they need to be coached and communicated with properly.”

WHY INTERN? Hiring an intern is not just about bringing on an extra pair of hands at a reduced cost; the relationship has to be a two-way street, and businesses have the opportunity to offer interns a number of benefits. Businesses generally look for young employees with two to five years of experience, which

realistically is not always possible. Internships provide the individual an opportunity to gain work experience in an established company, said Nathan. “Internships allow students to put their theory from university to practice in a real life role. It allows them to put their skills to the test and improve some weaker skills at the same time. Additionally, businesses allow students to network and gain references within their industry. In this sense, companies are opening a door for the intern’s future and adding credibility to their CVs,” he added. Candidates applying for full time positions who have interned at least once have more than double the chance of succeeding compared with those candidates who have not, according to data provided by Bloomberg Businessweek. If proper thought and planning is put into the internship programme, businesses will be able to offer interns meaningful work which will help them to bridge the gap between

the knowledge they have secured through their education and the workplace, added Lawrence. Hainey said that before investing the time to bring an intern on board, a business owner should keep in mind that the intern is there to learn, and when things are busy it is even more important to ensure someone with the available time is assigned to the intern’s personal development. Business owners should interview interns as they would for any other role in the organisation– they should be clear on the role and the tasks related to the job. When assessing the candidates, ensure they have a go-getter personality and the right skillsets that are needed to hit the ground running. “If you have an extensive project underway and are short of resources, this is the perfect time to hire an intern. There is no better learning opportunity than to be a part of a comprehensive project with other team mates in the organisation,” said Prakash. cont. overleaf

WWW.FINANCEMIDDLEEAST.NET

HIRING INTERNS

Interns can often be placed very quickly into organisations giving small businesses the chance to react quickly to fluctuations in work levels.” – Sarah Lawrence, Partner, Labour and Employment Practice, Squire Patton Boggs

cont. from pg. 31

Small business owners should take the time to plan and decide what they need from an intern and write a job description with clear roles and responsibilities. Having a proper structure in place will allow both parties to maximise the benefits from the arrangement and will give companies a head start in engaging the best candidates, said Lawrence. “Although interns may lack business experience, most will be highly skilled and motivated students or graduates, who are looking to be challenged and who will be a great asset to any business. There is no legal requirement for interns to be paid, however, offering some perks will naturally assist smaller businesses to attract a higher calibre of intern,” she added. Finally, small businesses in the UAE should keep an eye on the Emiratisation requirements and take proactive steps to train and engage local nationals from the outset as their companies grow. In July 2016 the Ministry of Human Resources and Emiratisation issued a decree allowing students to acquire permits for companies based outside of the UAE’s many free zones. “Most of the main free zones have provisions for temporary access cards to be issued to university students studying within the UAE–that is, those who already have a residency visa for the UAE–

who seek to undertake an internship for a UAE free zone registered company,” said Lawrence.

FINDING THE GEMS The youth unemployment rate in the Arab States of the Gulf and Middle East, excluding North Africa, is anticipated to be at 29.7 per cent in 2017, a slight improvement from 30.6 per cent in 2016, according to the International Labour Organisation (ILO). With the number of students and graduates seeking opportunities to give them an advantage in the job market, Hainey, Lawrence, Nathan, and Prakash unanimously advise business owners to liaise with the career centres at educational institutions, such as universities. “We have had success through contacting the universities directly, as there is usually a host of students of most disciplines who would consider giving up some of their free time to learn and get some valuable experience under their belts,” said Hainey. Career fairs offer companies an opportunity to meet and interview potential interns and hire them on the spot, while specialised job boards offer a platform for interns and business owners to connect, and Prakash added that social media networks provide ample platforms and communities for sourcing interns, allowing employers to view activity levels of a candidate, which can be an indication of the potential they possess.

QUALITIES THAT MAKE A STAR INTERN

Initiative Regardless of whether it is during the application process or the internship itself, every candidate must show initiative. This demonstrates strong leadership skills. Positive attitude Typically the work interns are asked to do is not glamorous. But if an intern stays positive, they have potential for a bright and fulfilling future.

CMY

Adaptability The intern should be open to doing a variety of tasks. Communication skills This trait is one that everyone should acquire before working in a qualified environment. It’s important for the team to be able to communicate problems, tasks and projects effectively both verbally or via email or memo, more so when communicating with clients. Critical thinking Business owners should encourage the potential intern to provide solutions to a given problem in order to understand if the candidate has the right critical thinking skills for the role.

Source: Rohan Nathan, Managing Partner of Nathan & Nathan Human Resources.

CMY

Leaving our print on Jordanâ&#x20AC;&#x2122;s banking industry since 1973 Our heritage allows us to use our experiences and expertise to help your business reach its financial goals. The Housing Bank established in 1973, stands today at the helm of the Jordanian banking industry, providing retail, commercial and corporate investment banking services with the largest branch network in the country.

For more information please visit our nearest branch or call 06 5200400 or 080022111 or visit our website www.hbtf.com

Housing Bank for Trade and Finance

@TheHousingBank

CASE STUDY

SURVIVING IN THE DESERT

Michael Mascarenhas joined the Desert Group as CEO in 2012 when it was in financial distress and managed to turn it around, grow it, and make it profitable

It has taken four years but from the five core companies we had we have grown now to 13 companies. Now it’s truly a group.” – Michael Mascarenhas, CEO, Desert Group

andscaping company Desert Group was established in Dubai 28 years ago by an expat with the vison to bring greenery to the desert. From humble beginnings, it grew to develop a full garden centre and irrigation service, over and above its existing offerings. When the financial crisis hit in 2008, the existing management was not quick enough to mitigate the financial burden posed, and by 2012 the company was facing bankruptcy, according to current CEO Michael Mascarenhas. Mascarenhas joined the group at the end of 2012 to join the existing Chief Reconstructing Officer (CRO) and the team from Deloitte in an effort to resuscitate the company. “The distress levels financially, organisationally and even in the people wise was phenomenal at that point. I was brought in in October 2012 to resurrect and bring life back to this company. It took me a year to stabilise the company and to start building on it,” he said. Mascarenhas said the company had lost four years of strong business and revenue growth by not acknowledging the reality of the financial crisis, and during that time the group’s competition was able to start developing a stronghold on the market by filling the void that the Desert Group was begining to create. Innovation took precedence for Mascarenhas at that time but he realised profit was necessary in order to sustain it. To create profit, the company needed to have the right people, and to be able to fulfil customer requirements. For the business to be profitable, it had to be competitive. To be competitive, the company had to clear its debt off

the books. It was just a vicious cycle, added Mascarenhas. “Any failure or success revolves around people–I had to fix my people. By ‘fix’, I had to make some hard decisions. But through my experience over the years, I have realised one thing: if you remove the layers and you clear the fog, you will begin to see the buildings. It was a very simple strategy. I let the top layer of the company vanish and let the people who put their hands up take control. There was a new energy in the group,” said Mascarenhas. The second step was addressing the financial situation of the company which Mascarenhas said was like trying to draw blood from a stone. He had to look is all the available pockets of resources, consolidate and reduce cash flow, and find the areas that could generate cash flow. “While I was trying to stabilise it, I also decided to build the business. It has taken four years but from the five core companies we had we have grown now to 13 companies. Now it’s truly a group. it’s a concentrically diversified group it is centred on water and green life, we do not do anything other business. That has been the evolution of Desert Group.” Many of the Desert Group’s ventures were linked to a number of government projects. With the drop in oil price in 2014, budgets were impacted. Mascarenhas said one positive aspect about the GCC region is its adaptability to changing economic scenarios. If a company is too dependent on a particular vertical it becomes even more difficult to change and adapt. “This is why we have created a business model which has a portfolio of businesses which is better

able to manage risk–we are able to shift resources quickly if one of our verticals is not performing,” he said.

WATER, FERTILISER, PLANTS The Desert Group now sets itself apart in three key areas. The first is water usage in the region, which Mascarenhas said could be done in a more sustainable way. Three years ago, the Desert Group teamed up the with University of Utah and will soon launch irrigation software. The software analyses soil and weather conditions as well as plant needs, and will release the right amount of water in line with those needs, rather than having someone water the plants manually. This will allow larger corporations and areas such as golf courses to manage their irrigation in a smarter way. The second key area the Desert Group is focusing on is the creation of region-specific fertilisers, of which they have developed 18. “Larger players have one-size-fits-all products that have been imported into this region. We have set up a team and we have invested in R&D; we now have an R&D arm of the company. Our fertiliser goes under the brand of Desert Energy. We sell it as retail and we are also linking up with all the golf courses, farms, and agricultural farms to use our fertilisers, which they have taken to. That development was a part of our innovation,” he said. The third area is a focus on native plants. Mascarenhas said that the desire for ornamental plants in the region has led to consumers neglecting plants that are native to it. “These are resilient plants with DNA that suits the climate and weather condition here, and nobody has mass-grown them. We have now cont. overleaf

WWW.FINANCEMIDDLEEAST.NET

CASE STUDY

Desert Group team will continue to work the way they have been working, continue with controlled growth, and secure the company’s position as the go-to people for distinctive projects. “We want to be the most valued group in the region, focused on water and greenery, and we want to share this whole idea of generating value with our stakeholders. Whether we go IPO or we have a regional plan,, we are here to stay. We will continue to innovate and we will continue to invest in our people, we will continue to be customer focused,” said Mascarenhas. He added that it takes a long time to understand what goes into the plant, what kind of soil and fertiliser it needs, and its watering requirements. It requires a great deal of nurturing. There is a great similarity between growing a plant in this region and also trying to grow a company.

Michael Mascarenhas, CEO, Desert Group cont. from pg. 35

invested in developing native nurseries, and I think a better position to supply the market with its needs. He added that focusing on native plants takes into account the ecosystem of the area and, and an effort is made not to disrupt it. Native plants take a long time to grow and it has already taken four years to have the nurseries setup and to nurture these native plants from a seed to five or six metres tall. This focus on local flora carries into all the landscaping projects undertaken by the Desert Group, because sustainability is a key driver. However, not all customers are readily receptive to it because in many cases they will request a plant that they had seen elsewhere and not understand why the company will not offer the same. It is a difficult sell to many customers who want something specific that they have seen somewhere else, and do not understand why the group does not make the same offering. But Mascarenhas said that with a bit of education, people are starting

to wise up to the idea sustainability– to having eco-friendly systems with water conservation. Dubai has a very literate population which has travelled the globe and is starting to become very tuned in to the idea of being sustainable and ecofriendly. They are very careful of what they buy nowadays and I am happy that my team sees that and they are moving ahead of some of the perceptions around here.

LOOKING AHEAD Mascarenhas said he believes in controlled growth and he understands the market requirements. “But I am very careful on how to position our group. We do not do each and every project that comes our way. Our business mantra is to be able to do unique and difficult jobs by providing a solution that no one else can. We have created a niche which takes us away from commoditisation,” he said. He added that the business climate and environment is positive and the

THE ISSUE When the 2008 financial crisis hit the region, the management team at the time did not take quick enough steps to allow the company to be able to adapt. By 2012 it was facing bankruptcy.

THE SOLUTION Michael Mascarenhas was brought on board as CEO to revive the company. He streamlined the staff while focusing on innovation and areas that could generate cash flow.

THE RESULT The shuffle in staff brought a new energy to the group. Within one year the company was financially stable. Within four years the company was profitable, has grown from five to 13 divisions, and is continuously innovating ways to offer solutions in sustainability. Source: Michael Mascarenhas, CEO, Desert Group

Not your copy? FinanceME is a controlled circulation magazine delivered to specific, named individuals in board level and the top management positions within the SME and mid-sized corporate sector throughout the GCC. Others may subscribe to receive the magazine regularly through the subscription form below. Institutions may also arrange bulk purchase orders of the magazine and its supplements to circulate among internal and external stakeholders. If you wish to arrange regular bulk deliveries, please contact subscriptions@cpifinancial.net for terms. Annual individual subscription (6 issues/year) US$90

To subscribe, simply fill in the order form and return it, with your cheque for US$90 to: CPI Financial, PO Box 502491, 1209 Shatha Tower, Dubai Media City, Dubai, UAE. NAME POSITION COMPANY ADDRESS LINE 1 ADDRESS LINE 2 ADDRESS LINE 3 PO BOX ZIP/POSTAL CODE COUNTRY

CPI Financial FZ LLC • PO Box 502491 Al Shatha Tower, Office 1209 Dubai Media City, Dubai, U.A.E. Tel: 4681 391 4 )0( 971+ • Fax: 9576 390 4 )0( 971+ • www.cpifinancial.net

FACETIME

SO, YOU THINK YOU CAN FRANCHISE?

Manhal Naser, CEO, Awj Investments, discusses what business owners need to consider when selling their business as a franchise model

Manhal Manhal Naser Naser

uying a franchise is often considered a ‘safe’ investment for anyone wanting to run their own business. The business model has been tested, processes are in place, and there is usually a degree of support from the franchise head office. But in the case of a start-up that has done well, there are a number of factors the owner needs to know before they decide to expand via a franchise model. The first step in the franchising process is determining that the business is ready to be franchised. This can be seen by the results of the business concept–both financially and the ongoing recognition and loyalty of your consumers, according to Manhal Naser, CEO, Awj Investments, the parent company of Operation Falafel, a home-grown brand that has been franchised in Saudi Arabia. “But you also need to give the brand time to exercise its operations and observe the dynamics of the restaurant to ensure that your processes are consistent and solid. Many places have a novelty factor which can last for a couple of months to a year, which makes business owners think that they are ready to franchise. If they had just given themselves a longer period, they

might see that they actually lose a lot of their audience and revenue once that novelty wears off,” said Naser. He added that a brand’s numbers need to reflect strong enough growth for a long enough period of time which will indicate a continuation of robust growth. Secondly, Naser said that a business owner needs to realise that franchising is more than just signing an agreement with another party–they are moving their entire business to another area, and it has to succeed under potentially different circumstances. It is not always the case that a business which succeeds in one market will automatically succeed in another. The business owner has to do a great deal of analysis and due diligence in their chosen market. They have to consider the economy, the dynamics of the market, all the economic indicators, the competition, the labour laws, and any potential taxation. “Once the market has been studied, this is where a business owner can look at how to adjust the business model if needed. For our part, there are core areas that we cannot touch. We might make adjustments to our menu offerings, but we won’t make a major change to the branding or tone

Managing ten units is not the same as managing 350. People dream big and when they start to face the reality of bringing their dreams to life, they start to wonder how they’re actually going to get through it.” – Manhal Naser, CEO, Awj Investments

of voice because these are in the DNA of the business. Losing our DNA will decrease the brand value, so we only tweak where necessary,” said Nasser. He added that if a business is not ready to be franchised before it tries to expand into a new market, and that market fails, it will backfire on the original business which will damage the brand’s reputation. “Even if I have a good business in Dubai, if I open in Saudi before being ready, that outlet will eventually have to close down. A year down the line people will start to talk and say that it’s not a good franchise, which will cap the growth of the business and other markets will not even consider your brand and customers will start to lose trust in the brand.”

FIND THE RIGHT PARTNER Every company has its own criteria of selection for their partners. Naser said the key points that he considered, and suggests are: a partner that will think act like the franchisor; has passion that is backed by solid experience; someone who is able to interact well with the franchisor; someone who has experience managing a multi-unit operation; can fund the operation until it is up and running; and most

importantly, someone who doesn’t want to buy a franchise for the sake of being able to say they have one–they really have to care about the business. “The main challenge occurs from the moment a partner is selected until the start of operations because there is a lot of back and forth on the agreement terms, on the government regulations, and these negotiations need flexibility from both parties to reach some sort of common ground,” said Naser. Another potential problem is finding a way to ensure that franchisees comply with the terms laid out in the franchise agreement, though Naser says this risk can be mitigated early by selecting the right partner carefully. The agreements are drawn up by lawyers and are binding with clauses in place to cover all the eventualities, even some of which are unimaginable. The documents also protect the franchisee as much as the franchisor. “Of course there will always be areas where a franchisee will not comply, however a well-reputed company that has been dealing franchising for some time will understand that these agreements are binding, and they will respect the terms,” said Naser.

Furthermore, the franchisor should not sign the document, shake the franchisee’s hand, and send them on their way. The franchisor should have a regulated was of monitoring and evaluating their partners, in order for any problems to be caught and addressed early. Finally, Naser said that a potential franchisor needs to realise the toll franchising could take on them. “It requires lots of involvement and lots of work and it will take you away from many things because it’s a huge operation. Managing ten units is not the same as managing 350. People dream big and when they start to face the reality of bringing their dreams to life, they start to wonder how they’re actually going to get through it. People will say that they wish to open 100 units, but they don’t think about how they will manage the size of the team required to run it. It’s a huge responsibility,” he said. He added that the responsibility to the brand is never-ending and the franchisor has to achieve the same success they achieved in their home market. Consumers who eat a sandwich, for example, in one city have to experience the same taste and quality as they would in in a store in any other store around the world. The franchisor owes that duty of care to their consumers.

WWW.FINANCEMIDDLEEAST.NET

FRANCHISE Mazen Omair Omair says says one one of of the the best best Mazen things about about being being in in aa candy candy store store things is being being able able to to try try samples. samples. is

When Mazen Omair brought Fuzziwigs Candy Factory to Dubai he had to consider candies, kids, and air-conditioning

n 2014, Mazen Omair wanted to diversify his portfolio of businesses. Having held a Subway franchise since 2008, he wanted to stay within the F&B sector. “I was watching a TV show and somebody was doing a review of a candy store and I thought it would be neat to have an old-fashioned candy store in Dubai. I discussed the concept with my wife and she did some research and found Fuzziwigs Candy Factory in the US,” he said. Once Omair connected with the CEO of Fuzziwigs, he did his due diligence by flying to the US to meet with the team. The brand did not exist

outside of the US and Dubai is its first international expansion. Although the store is designed to give the feel of a ‘mum and pop corner store’ Omair wanted to make sure it was still a model that was scalable and could be grown into more than one or two stores. He approached Fuzziwigs for the master franchise opportunity with the view to launch in Dubai first, make sure that the concept was right for the marketplace, tune the business processes and supply chains and then look at expanding the business model across the GCC. Market research was more touchand-go for Omair because he said the

same amount of data that is available in the US or the UK is not available in the Middle East. Overseas industry analysts follow different segments and they can provide trends and numbers and subcategories–which candies or gum are moving better than others–but that data doesn’t translate here. “We did research, we read reports, and we attended candy conferences, but at a local level our research was more organic. My wife and I visited different locations at different times–the mornings, 3pm, and the evenings, to try and capture that data that doesn’t exist: to see peak times as well as what people are buying, what are

If you cannot have fun in a candy store, there is something wrong!.” they experiencing? How are they being engaged? Are they watching somebody decorate a cupcake, for instance? This information is not quantifiable, but it does say something about the market,” said Omair. With over 700 stock keeping units (SKU) of candies, along with the large number of products prepared in-store, Omair also had to set up a number of internal processes and ensure his logistics and supply chain could meet his requirements. “We had to understand the import regulations as well, because the last thing I wanted to do was sign a contract to bring in a number of different products only to find out I could not do it. We worked closely with the municipalities to find out what the requirements were. Fortunately Dubai is quite well-regulated and the processes are clear. It was time-consuming for us initially because of the large number of SKUs we were bringing in,” he said.

CHALLENGES 2014 was the peak of Dubai’s retail boom and Omair said he knew finding a location would be tough but he did not realise how tough. “We had our plans; we started approaching landlords. By and large almost every single one of them loved the concept based on the pitch. However, we weren't successful in securing any locations. Eventually we had the couple of candid conversations with developers who said, ‘The look and feel doesn't work for Dubai.’ We were advised to work on the design of the shops.” Through a series of fortunate connections Omair met with a design

firm that was able to give him the right advice on how to do the necessary upgrades, which he said was an entirely new experience because when operating a franchise model, most of these considerations are already handled by the head office. One of the major considerations for the predominantly glass store was managing the temperature of the store to accommodate the climate of the region, as well as the sun exposure. Many hours were spent with engineers discussing the fine details of what the store required. “A lot of the time engineers are proficient in a technical area, but they will not necessarily understand your requirements–they might think you just need an air-conditioning system but they also need to understand that the shop contains consumables and has to be kept a certain temperature, and whether or not the doors are going to be kept open or closed,” said Omair. He added that he had turned down a number of locations because the malls and shops were not cool enough. The first location in JBR opened in September 2016, and one month later the second store was opened in Riverland at Dubai Parks & Resorts. Currently a couple more are in development. “We worked really hard for twoand-a-half years to focus on the launch because it was not only about finding the right location, it was about creating the right experience; whether it was the smell of fresh caramel as you

walk through the store, or watching fresh strawberries being dipped in chocolate, or the amazing selection of candies available to you when you walk in. We wanted to make sure that when customers walk in they have that nostalgic feeling from entering a candy store in their youth. Also, it’s a candy store. If you cannot have fun in a candy store, there is something wrong!” said Omair. Omair added that it was important for the store to be child-friendly, where families can come in with kids and strollers, and that it is fine if children sometimes make a mess. He said he feels children in Dubai are quire restricted in what they can and cannot do in their movements; he did not want an atmosphere where the staff wear white gloves and everything is perfectly lined up. He wanted an environment where children can have fun, sample the products, enjoy themselves, and make their own memories in a candy store.

WWW.FINANCEMIDDLEEAST.NET

SHUTTERSTOCK.COM/VOROBYEVA

– Mazen Omair, Master Franchisee, Fuzziwigs Candy Factory

When Pedro Codina created his t-shirt company, he had no idea of the far-reaching social impact that would come with it

IMAGES: WWW.ILOVEMYPOCKET.COM

START-UP

POCKET FULL OF LOVE

edro Codina, Founder of ILOVEMYPOCKET always wanted to have his own t-shirt company, and, from 2003 it was an idea that would not go away. Originally from Spain, he was studying hotel management in Holland which he said was a very cosmopolitan environment, with a lot of different fashion influences from around Europe. “It was really popular to wear t-shirts with a quote or a cool graphic and I was eager to have my own company. I had no idea how to start a company and I’m not a designer. I kept travelling; from Holland I went to China, then to Barcelona, and then I moved to Dubai around 2008 and the idea of having my own t-shirt company stayed with me.”

His first real inspiration came to him when he saw the use of Keffiyeh fabric as decoration. He used the fabric for cushions in his home, and guests always remarked on them. He realised he could incorporate the fabric into his t-shirt design, and also that all the shirts that drew his attention had pockets. He took his idea seriously in 2014. He went to a tailor that could do adjustments on his suits, to make a few sample shirts with pockets made of the Keffiyeh fabric. The people who saw it really liked it, but at that time it was just a t-shirt with a pocket with no story behind the brand. “I was at a friend’s barbecque and we were talking and I just said ‘I love my pocket’ and realised that was a great name. I googled the name, saw all the domains were available, and bought them all. Then I asked what I could add to the idea of the company,” said Codina. The Keffiyeh fabric represents a specific region of the world and Codina reasoned that a portion of the profits could be sent to the destination where the fabric originates. From there the business model developed into sourcing fabrics from around the world, where a portion of the profits can be used to benefit each of those communities.

Market research

Codina’s first foray into a market scenario was a pop-up in d3 during Design Week at One Life Café. “We were there for about eight days. By the second day people approached me to learn more about the brand and we started selling a lot of shirts. People would stop and look at the shirts I had on display, and they just liked what they saw without knowing the story behind it.

Once I explained the concept, people loved it even more. We had people from Saudi, Egypt and Kuwait, as well as Australia. One lady from Russia bought 12 t-shirts,” he said. He knew he had achievd his goal–to create something visually pleasing that would also have social impact. One of the challenges in the area is its limited resources and Codina did not want to use just any cotton; it was a non-negotiable for him to use fair trade cotton. He found an apparel company that produces ready-made items that can be rebranded, and only uses fair trade cotton in their supply chain. “My goal is to have my own fabrics and then we can do our own cuts, but first we have to continue to test the market and settle the brand.” ILOVEMYPOCKET has partnered with the locally-based Al Maktoum Foundation which supports schools in Africa. “We have done a design for Kenya using the original fabrics from the kikoi of the Masai, and we will buy school bags with school materials for the students of two schools in Nairobi. We cannot do everything at the same time, but slowly we are creating a product that is cross-selling and representative of every destination, as well as helping every destination. I do not have to be from a certain country to support it. That people from different places can support one another is beautiful, I think,” said Codina. To date the company ships to around 12 countries, and Codina will look into the logistics of setting up in different locations to ease the prohibitive shipping costs to places such as the US and Europe.

AWARDS

BUSINESS VISION AWARDS 2017 The FinanceME Business Vision Awards winners have been announced

aunched in 2016, the FinanceME Business Vision Awards are designed to reward everyone from the start-up entrepreneur, to the seasoned medium-sized enterprise owner, the personalities in the sector, and the businesses that support them, across the GCC.

Following the success of the awards last year, we had an incredible response from our nominees. All the nominations put forward were of an exceptional calibre, making judges’ final decision on the winners challenging in the extreme.

There is more to succeeding in business than simply having a great idea, it takes hard work too! Our Business Vision Awards winners have shown full commitment to their ideas and to realising the profitable potential that they hold.” – Robin Amlôt, CPI Financial CEO.

After extensive deliberation, we are proud to announce that this year’s FinanceME Business Vision Awards winners are: Best Business Advisory Service JPd

Best Business Consultancy

Perkins+Will

Best Business Solutions Provider

It is perhaps apposite to say that our Business Vision Awards mark the success and growth of those whose vision of business has demonstrated a proven track record.” – Robin Amlôt, CPI Financial CEO

Fetchr

Best Business Technology German Imaging Technologies (GIT) Best Home Grown Brand RAK Ceramics

Best Start-Up of the Year BLOOVO.com

Inspirational Person of the Year Omaira Al Olama

Most Improved Business of the Year LINKVIVA

Recruitment Company of the Year Taylor Sterling

Top manufacturer The Camel Soap Factory

Top Services Provider De Boer Middle East

Prizes This year, Business Vision Awards winners will receive a number of prizes over and above the engraved crystal trophy and certificate of achievement. Each winner will receive a promotional package,which includes: • One free electronic direct mailshot (EDM) to our database. Our website, www.cpifinancial.net, has 74,586 registered users as at the end of April 2017; • One half page horizontal advertisement in FinanceME which will appear in both our print and digital versions of the magazine; • One CEO interview in FinanceME to appear in both our print and digital versions of the magazine; • Finally, a hi-res winner’s logo for will be made available for their use on their own promotional and online activities.

We extend our warmest congratulations to our winners! WWW.FINANCEMIDDLEEAST.NET

TECH FOCUS

THE INSIDE JOB

Sergey Ozhegov of SearchInform discusses how employees of any size business may cause more damage than hackers

or some workers, an employer's business can become a goldmine; there are plenty of ways to get more than just a salary from a company. As the saying goes, forewarned is forearmed. The topic can best be explored through the spectacle of typical behaviour patterns of insiders, with some real-life examples from our clients. For example, the engineering department employees of a manufacturing company worked for a few weekends overtime due to a highpriority project with a strict deadline. The information security department discovered that there were activities other than the project taking place. In fact, the engineers spent most of their weekend time on a project for a direct competitor. Considering the use of confidential commercial information, the cost of the project was estimated at $443,000. Working for a competitor is not all that uncommon. If employees start to do a lot of overtime, working on the weekends, or take work home, it is advised to monitor these off-hour activities. Pay special attention to the protection of commercially valuable data, confidential information, research and scientific materials. Incidents can be prevented here by proper distribution of access rights, restricting and controlling the access to important folders. Some data

loss prevention (DLP) systems have a function to restrict the access to the folders of top management. Track attempts to obtain confidential documents by unauthorised people. That means nobody, including system administrators, should be able to access top managers' folders, be it on their PCs or network storage servers. Such thorough control is possible with the help of modern technology based on DLP and security information and event management (SIEM) systems. One of our client companies discovered a suspicious relationship between three employees, who were not connected in any way; they worked in different departments and had no joint projects. Interestingly, all used the same webmail account. With the help of the DLP info-security figured that those employees used the webmail account to coordinate shadow sales of equipment produced by the company. Monthly damage to the company was between $40,000 and $50,000. It is a classic example of a shell company set up by insiders. Insiders can be, and often times are, very cautious. In the event of sharp increase in the number of messages between unrelated workers, infosecurity specialists should check out the contents of such communications, especially when they use non-work related channels of communication,

such as personal webmail or a social media account. The managing director of one of the offices of a large oil company actively advocated one of the suppliers in tenders for mining equipment and parts. Naturally, the info-security department found it to be suspicious. The retrospective analysis of captured communications showed that the director received around $200,000 in kick-backs from the supplier. As a result of these deals, the company lost over $1.5 million. Kickbacks and bribes are the perpetual satellites of business, which is why the info-security specialists must understand who the employees really are, and which are the groups of riskâ&#x20AC;&#x201C; groups that might have an intention to undermine the companyâ&#x20AC;&#x2122;s earnings. In the event of sales and procurement people falling into a risk group, the information security specialists must take preventive measures and use professional software to monitor the activities of these employees. In selected DLP systems there is technology to automatically identify various types of fraud, including kickbacks. Such systems alert security whenever there is an instance of suspicious correspondence or behaviour. Corporate fraud is another serious problem. An insurance company office

RISK MITIGATION Pay special attention to the RECOMMENDATIONS protection of commercially valuable data, confidential information, research and scientific materials.” – Sergey Ozhegov, CEO, SearchInform

had 11 insurance agents, working without an on-site supervisor. The office was responsible for way too many high-cost claims, hence remained unprofitable for a while. It turned out that some agents sold backdated plans. Their friends and family, who needed expensive medical treatment or surgery, would pay their way into an appropriate backdated insurance. As a result, the office was losing about $150,000 yearly. As obvious as it sounds, remote offices require just about as much, if not more, attention in respect to information security–all communications and activities are subject to corporate info-security compliance. To investigate the cases, similar to the one mentioned above, the info-security officers would need to conduct a thorough analysis of employees’ actions and communications, as well as nonwork related ties between workers and clients. A good DLP captures and stores all related data–activities, communications, connections–and makes it available for transparent retrospective analysis. After implementing a worktime monitoring solution, a telecom company discovered that a handful of people were working on non-work related projects: SEO optimisation, web design, copyrighting, and other

similar activities that people usually do to make some money on the side. However, all these activities were taking place between two and three hours per day, during work hours. Obviously, the company lost money on paying for the idle hours and suffered from shortfalls in profits for the same reason.

KEEP CONTROL Control not only the result, but also the work process. This could be done with the help of automated monitoring systems, which identify violators of work duties, by controlling the activities the employees engage in during the workday. The system informs a designated supervisor when an employee diverts away from work. If needed, screenshots help to clarify such situations. Additionally, these systems could measure how efficient and productive a particular employee, department, or organisation as a whole is. It is virtually impossible to foresee all possible fraudulent schemes, as threats are constantly evolving, and people behind them are pretty resourceful. But using all reasonable means to ensure the security of a business is what lies at the core of effective risk management, and it’s what makes a difference between failure and success.

Implement rules for working with information and stick with them Strict adherence to the rules of storage and handling of information must apply to any employee, from a top manager to a regular employee. Establish an info-security department The task of info-security officers is not only to investigate violations, but to analyse potential threats. For example, pay special attention to employees who are at risk: people prone to substance abuse, departing or dissatisfied employees, etc. Use the means of information security Utilise worktime monitoring, DLP, and SIEM systems. Control the maximum available channels of communication. Do not wait for insiders or intruders to appear and harm your business. For any business trust is of paramount importance. Insure the security of information about your clients, employees and partners. Get rid of formalism and mediocracy The implementation of information security tools is not a guarantee of protection, especially when you work with them only as the circumstances arise. Often, info-security incidents happen because the tools are not used to their full potential: some channels aren’t controlled; some users have access to the information that should be inaccessible for them, etc. Use the principle of checks and balances Don’t allow all responsibility and power concentrate in one person’s hands. Establish an info-security department to counterbalance to the IT department, which often has the access to the most important confidential information and, technically, could use it for any purpose. Source: Sergey Ozhegov, Chief Executive Officer, SearchInform

WWW.FINANCEMIDDLEEAST.NET

BEHIND THE SCENES

Geeky Lizard OmarSharif SharifAlAli, AlAli,Head HeadGeek, Geek,Geeky GeekyLizard Lizard Omar Omar Sharif AlAli set up his game store to cater to the growing gaming community in the UAE and ved fantasy “As a kid, I loousin and I would fiction. My c Who episodes and r watch Docto terrif y me as a kid. ld u o w y e id “Let’s th eight, we sa stuff!” re e w e w n e is Wh that has all th open a store y business partner. ” He is now m

"Businesses like mine will not survive in a major mall. We have a reasonable rent here in Al Ghazal Mall. To move to a cheaper space would mean moving towards Deira or Bur Dubai, but then our clientele would struggle because of the distance and parking, and not enough people in that area are interested. If we moved closer to the city or Downtown, we would have to pay an arm and a leg and we would not have this much space."

ped stopped ple stop people of peo lot of ed, aa lot pened, happen crisiss hap nciall crisi n the financia Wheen the fina "Wh purchase a comic they if that out red ple figu Peo trusting banks. it in the same condition, the value boo k for AED 10,000 and keep ey in the bank can disappear will not drop belo w AED 10,000;tomon their trust into collectab les. put over night. People are starting s will not kno w the value of what Only about 10 per cent of collector experts in their fields. Seri ous are they are paying for because they in out in tly which edition came out comic book colle ctors will know exac e. valu r e." thei w valu r kno thei will w theywill kno andthey yearand whichhyear whic

rs a separate The tavern offe geons and un D space for s. Dragons player

"These card games are incredibly challenging and require creative thinking to defeat opponents. Chess only gives a player a certain number of pieces to play with, so it is an easy game to learn, but difficult to master. The people who play these games are some of the smartest people I’ve ever met in my life. They have an incredible way of thinking about these games and excelling at them."

introduced y in 2005 who agic: The gu a h it w s d n M ie r and late “I became fr s and Dragons, table, we me to Dungeon yed so much–at the dinner through d pla Gathering. We online, argued over rules, an mmunity co s g le in ru m d ga ke l al chec es we found a sm.” Google search in Dubai

Omar Sharif AlAli

The Geeky Geeky Lizard Lizard staff staff offer offer The figurine-painting lessons. lessons. figurine-painting

“In 2012 Dubai SME gave me my retail licence. We joined MEFCC (Comic Con) where we had a table and the community just grew. The owner of a coffee shop offered us his premises for weekends when his shop was quiet. We eventually took over the mall food court. In 2015 I approached the Khalifa fund and they approved us for funding. They did not believe us when we told them about the fan base, but interest has been growing, helped by the popularity of comic book movies.”

Geeky Lizard also caters to mainstream preferences.

"The UAE law states clearly that we cannot have social gatherings or tournaments unless it’s a seasonal event such as the Dubai Shopping Festival. If anyone can just host a gathering, we’re taking business away from event companies. UAE nationals have a majlis in their homes where they can host get togethers. Expats do not have that space which is why a local game store like mine is needed. We’re in talks and writing letters to Government offices to approve of what we do, because gaming stores are being told that having tables and chairs are for product demos. Once the customers sit down to play, that is not a demo anymore. So we are in a bit of limbo until the correct permits come through from the Government to hold tournaments." WWW.FINANCEMIDDLEEAST.NET

LAST WORD

Milking it for what it’s worth MUSTAFA KOITA, FOUNDER & CEO OF KOITA, DISCUSSES HIS SHORTCOMINGS AGAINST THE ROCK, JUGGLING THE TASKS OF A GROWING SME, AND A PARENT’S DESIRE FOR THEIR CHILD’S APPROVAL With new customers for example, we spend a lot of time researching them to ensure we customise our pitch. In addition to all this getting enough sleep is absolutely crucial.

How do you strike a work-life balance?

What does your current role involve on a day-to-day basis?

I’m the Founder & CEO of a growing SME. Therefore, my role is everything and anything with a pinch of fire fighting each day. Right now, we’re focused on growing our international business which requires more travel, and also, continuously transforming the organisation for scalability.

What plans do you have for the business over the next 12 months?

We plan to expand in three ways. We will increase our product range to include more customer-driven but innovative stock keeping units (SKU). Second, we plan to expand geographically into new countries. Third, and most important, we will expand the team. Human Resources (HR) expansion is the toughest but also the most exciting when you find the right people.

How do you prepare for the day ahead? By planning a week ahead! Again it depends on who the meetings are with.

It’s extremely difficult in the beginning. There are so many people that give advice on this topic, but when you are in the early SME phases, there is no chance at balance. The best way is to grow your company to a stage where you can afford more (quality) employees, and only then will you get an opportunity to experience true balance.

What is your leadership style?

Being totally transparent and the most important theme I promote is that “I am not the boss”. I’m just a guy who’s here to support my employees become more productive and happier. It’s fostering the mindset of employee empowerment– and that is it.

What does your average day look like? I work out at 6am, drop the kids off at school around 7.45am and try to be in the office by 8.15am. I have an average of five of six meetings a day; so when I arrive at the office, I blink my eyes and the next thing I know it’s night time.

Describe your biggest failure in business and what it taught you.

This sums up my philosophy in life– failures are not failures, they are lessons that we learn from. I assumed, as we do in the US, that my customer would pay on time! This was when I first moved to the UAE over 10 years ago. Since then I’ve learned the importance of not just

payment terms but the enforceability and guarantee of payments!

What's the most important lesson you've learned in the last year?

I’ve learned that growth is good but not always great. As your revenues and geographies grow, you must have the infrastructure–people, processes, and technology–and cash flow to support it.

WHAT IS THE BEST ADVICE YOU WERE EVER GIVEN?

To read this book called Focus. It’s got some old examples; the principles are still relevant today.

WHAT IS YOUR FAVOURITE MUSIC?

Old school stuff such as A Tribe Called Quest, Prince, and anything that makes you want to dance!

WHAT MOVIE OR NOVEL CHARACTER DO YOU MOST IDENTIFY WITH?

I wish I was like The Rock. But I’m probably more like “The Pebble” next to him!

IF YOU RULED THE WORLD, WHAT WOULD YOU CHANGE?

I would ban all weapons and ask everyone to perform one random act of kindness each week.

WHAT SUPERPOWER WOULD YOU LIKE TO HAVE?

Being like Wolverine would be great. The real power of this would be that my son would finally think I was cool.

Comprehensive Leasing Co resized.indd 1

21/05/2017 16:10