#61 - November 2017

THE HERITAGE OF YOUR WEALTH...

ISSUE 61

ISSUE 61

DIGITAL DIVERSIFICTION

With better convenience and ease of selection, digital business is the way forward. – Adeeb Ahamed, Managing Director, Lulu Exchange Holdings

DIGITAL DIVERSIFICATION INSIDE Licensed and regulated by Central Bank of UAE

600 546656

www.nationalbonds.ae/prestige

Preserving the legacy of your business (pg 14) Developing the UAE with solid career plans (pg 16)

P14

P16

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FME 61 cover.indd 2

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ello and welcome to the latest issue of FinanceME and the final issue for 2017.

By the time I sit down to write my next editor’s letter, VAT will be in place and I’m sure the reality of its implementation will spark some interesting discussions.

This month’s Case Study touches on an important issue–intellectual property protection. Stevi Lowmass, CEO and Founder of The Camel Soap Factory has had to deal with other parties making counterfeit copies of her products as well as trademark violation. She spoke to FinanceME about how she took the sound advice to register the worldwide copyright in the early stage of setting up her company, to working with the Dubai Economic Department (DED) as well as the merchants selling the counterfeits without realising they were doing so. She also discusses her long-term plan to sell the company, preferably keeping ownership within the UAE, where the brand was born (Pg 34).

Another home-grown company featured this month is ALF Administration. We spoke to Managing Director Omaira Farooq AlOlama about how her Master’s in Criminology led her to starting a company that focuses on the skills development of UAE Nationals (Pg 16). Lowmass and AlOlama were both winners at this year’s Business Vision Awards, winning Top Manufacturer and Inspirational Person of the Year respectively.

Skills development is only one area of interest in our Employee Engagement feature. It also addresses how employees react if they perceive their management’s treatment of them to be unfair, as well as the direct impact disengaged employees can have on the bottom line (Pg26). Ravi Chandran, CEO of Liwa Minor addresses this as well as he takes us Behind the Scenes of The Coffee Club. He emphasises the importance of staff training and providing a clear career path to foster loyalty to the company (Pg 48).

On that encouraging note we are signing off for 2017, and we look forward to sharing some great stories with you in the New Year.

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16

26 48

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

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PUBLISHED BY

5

NEWS ANALYSIS Saudi supports its SMEs

26

6

FAST FACTS InternsME receives first disbursement from MBRIF

30

BUSINESS LICENCES Open for business

8

TOP TIPS Five ways to spot a toxic employee

34

CASE STUDY A sincere form of flattery?

38

FACE TIME Small business, big data

40

FRANCHISE Mojo magic

42

START-UP For the love of art

LEGAL FOCUS Keep it in the family

44

TECH FOCUS It’s all ‘appening!

CHALK TALK Omaira Farooq AlOlama

46

PRODUCT FOCUS Working women

CEO CHAT Digital diversification

48

BEHIND THE SCENES The Coffee Club

COUNTRY FOCUS Keeping up with Kuwait

50

LAST WORD Working together

10 12

14

16

18 22

EMPLOYEE ENGAGEMENT Employees–engage!

VAT WATCH GCC VAT–update

OPINION Accounting–better get started

C7 • M30 • Y80 • K40 PANTONE 871 C

Chairman SALEH F. AL AKRABI C45 • M35 • Y30 • K100

Chief Executive Officer TONY LONG Sales Director OMER HUSSAIN

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

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

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

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

Consultant ROBIN AMLÔT robin@cpifinancial.net

Get the next issue of FinanceME before it is published.

Full details at www.financemiddleeast.net

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

ISSUE 61

Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net

ISSUE 61 ISSUE 59

Creative Designer ANA MAKSIĆ ana@cpifinancial.net

MAKING GAINS

DIGITAL DIVERSIFICTION

With better convenience and ease of selection, digital business is the way forward.

ISSUE 59

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

– Adeeb Ahamed, Managing Director, Lulu Exchange Holdings

ISSUE 60

DIGITAL DIVERSIFICATION

Overall, we feel GAIN Capital is well positioned to extend market share globally in theour year, which inclu coming commitment to des our continued across the Middserving traders le East region.

– Glenn Steven s, Chief Execut

ISSUE 60

ive Officer, GAIN

Capital

INSIDE

tionalbonds.ae/prestige

Preserving the legacy of your business (pg 14) Developing the UAE with solid career plans (pg 16)

P14

P16 LETTING PEOPLE AND TECHNOLOGY CREATE THE FUTURE

FME 59 cover.ind bleed guide.ind d 1 d 1

16/04/2017 13:14 15:02 15/10/2017

INSIDE

17/04/2017

Accessing your lawyer onlin e (pg 14) Focusing on female health (pg 44)

14:58

The firm’s success can be attributed to investing in people and technology.

LETTING PEOPLE AND TECHNOLOGY

CREATE THE FUTURE INSIDE

Wearable art (pg 16) Assisting GCC job seekers (pg 42)

P16

P42 9/19/17 9:38 AM

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GAINS P14

Data Analyst NADINE ABOUZEID nadine@cpifinancial.net Finance Manager SHAIS MEMON, ACCA, CMA shais.memon@cpifinancial.net +971 4 3913727 Database Administrator RIZZA RECTO INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682 Administrative Assistant CAROL C. ROSALES carol@cpifinancial.net Tel: +971 4 391 3709

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

P44 6/28/17 3:58 PM

– Philippe Ghanem, CEO and Vice Chairman of ADS Securities

FME 60 cover.indd 1

MAKING

Advertising sales@cpifinancial.net

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 Traffic Media FZ LLC, Dubai, 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

Saudi

supports its SMEs

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audi Arabia’s Public Investment Fund (PIF) announced the creation of a $1.07 billion “fund of funds” to support the growth of small and medium-sized enterprises (SMEs). According to a statement the fund is designed to boost SMEs’ access to capital by investing in venture capital and private equity funds.

The mandate taken on by PIF is quite significant with a long-term view. Funds such as these are all elements in the overall equation required to stimulate sectors of the economy, especially the SME sector, according to Omer Saleem, Chief Financial Officer at Saudi-based business support agency, Proven SA. “It is our belief that liquidity within SME sector will boost investor confidence and subsequent investment. However, given the current inflated asset and commodity prices it will be critical to monitor closely the dissemination of funds and their effective value creation in targeted areas critical to the growth and health of the Saudi economy keeping in view the longterm vision of PIF mandate.”

Investments are expected to create around 2,600 jobs and contribute SAR 400 million to the GDP by the end of 2020. Those figures are expected to rise to 58,000 jobs and 8.6 billion riyals to GDP by the end of 2027.

The fund is one of a number of commitments which the PIF is taking

on under economic reforms designed to reduce Saudi Arabia’s dependence on oil exports. Saudi officials aim to use the proceeds from the sale of some five per cent of state oil giant Aramco, which they expect to fetch $100 billion for the PIF, to stimulate the domestic non-oil private sector and expand the fund’s global investments. Crown Prince Mohammed bin Salman, who is also chairman of the PIF, has said that 50 to 70 per cent of the fund’s cash would be invested domestically, according to media reports.

More important than the large amount of monies being made available is the signalling to the marketplace that Saudi Arabia desires entrepreneurs to realise their ambitions, said David Daly, Partner at accountancy firm Argent Gulf Consulting.

“Economic history teaches us that Government-driven preferential sector development will ultimately deliver sub-optimal results. This is due to pet sector coddling that pays lip service to market demand.

Should the Saudi Government use this welcome announcement to kick start a plethora of larger supporting and complementary private funds, the possibilities are immense.

By establishing a rigorous baseline in legal and regulatory governance, as indicated in the Government’s Public Investment Fund Program

(2018-2020), it could provide the confidence to unleash an era of SMEled innovation,” said Daly.

The growth of SMEs sector in KSA is central to achieving the Saudi vision 2030 for the future generations, said Nawaf Al Sahhaf, Chief Executive Officer of Saudi-based tech incubator the Badir Programme. “Venture capital is one of the necessary mechanisms to support SMEs, and the fund will assist in developing venture capital establishments. The fund is also an indication that the Government is interested in this important sector and its role in implementing Saudi Vision 2030, by increasing its contribution to the GDP from 20 to 35 per cent.”

He added that the new fund will play an important role in providing funding opportunities and open new channels to provide the necessary financial support for technical small and medium enterprises (SMEs) projects.

Since Saudi’s economic reform plans were introduced last year, the PIF has announced a considerable line-up of investments, including $45 billion in a SoftBank technology fund and $20 billion in a Blackstone private equity fund that focuses on US infrastructure. Plans were also announced to develop new projects in Mecca and Medina and redevelop Jeddah’s waterfront corniche.

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SHUTTERSTOCK.COM/PATRICE6000

Saudi Arabia’s Public Investment Fund is focusing on helping small businesses in the Kingdom to thrive

INTERNSME RECEIVES FIRST DISBURSEMENT FROM MBRIF

FACTS NOON INVESTS IN SAUDI YOUTH ENTREPRENEURSHIP WITH PUBLIC INVESTMENT FUND

UAE-BASED START-UP DEMOCRANCE SECURES $800,000 FUNDING

With digital marketplace Noon set to roll out in Saudi Arabia before the end of this year, the Kingdom will see a new era in youth entrepreneurship, according to Founder, Mohamed Alabbar. Alabbar said Noon will deliver on the goals of Saudi Vision 2030 with a digital enterprise that is underpinned by strong public-private sector partnerships and a focus on creating high quality jobs and business opportunities for young Saudis. “It also supports the development of the Saudi small and medium enterprises, another objective of the national transformation plan,” he added.

Noon will offer a number of products as well as catering to the needs of book lovers, adventurers and new parents. Customers in the Kingdom will soon be able to order from its website or the mobile app currently available for download.

Noon has already partnered with market leaders, SMEs, and startups, helping them capture a greater share of the e-commerce market in the Kingdom and the wider region.

Launched in the UAE earlier this October, Noon has been receiving strong response from the community.

Democrance, a UAE-based insurance tech start-up designed to make insurance accessible for those who need it most, raised $800,000 during its first round of funding. A number of investors participated, including Jabbar Internet Group, an investor in internet and tech companies in the Arab World, and Eos Venture Partners, a London-based global InsurTech venture capital investor.

“We are excited to implement technology through a social enterprise model and provide insurance to income groups that need it, but face numerous barriers in attaining it,” said Michele Grosso, Co-Founder and CEO of Democrance.

Worldwide insurance penetration stands at six per cent, while emerging markets reach only half of that figure. In MENA only one per cent of the lower-income population can access microinsurance. Democrance brings together insurance and telecommunication companies, allowing users to get access to insurance through their mobile phone, and has set a target to provide access to insurance to 15 million low-income people across the MENA region by the year 2020–a segment not insured before.

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The Mohammed Bin Rashid Innovation Fund (MBRIF) has announced internship job portal, InternsME.com, as the first disbursement recipient.

The announcement took place at a ceremony at the Youth Hub in Dubai, attended by HE Younis Haji Al Khoori, Under Secretary at the UAE Ministry of Finance, and top officials from the Ministry of Finance, MBRIF, RAK Bank, Emirates Development Bank, and InternsME.com.

“The biggest challenge facing innovation–focused companies and entrepreneurs is that securing the crucial funding required to sustain their business. MBRIF is the critical partner that links these individuals and companies to banks and financial institutions in order to help them take their business to the next level. With the Ministry of Finance acting as a guarantor, we have created a platform for companies and entrepreneurs to access funding via banks. With this first disbursement, we are demonstrating our commitment to the youth in the UAE,” said Al Khoori.

Launched in 2012, InternsME. com connects students and recent graduates to top employers across the Middle East for internships, trainee positions, part-time and full-time graduate job opportunities.

The portal helps bright young talent kick-start their careers while also helping companies recruit and grow cost-effectively.

Interns ME Chief Executive, JeanMichel Gauthier, said that MBRIF’s encouragement to innovative companies such as InternsME. com will further energise regional economies while enhancing the UAE’s global competitiveness and creating well-paying jobs for the younger generation.

Personal finance comparison website Souqalmal.com has raised $10 million in a Series B investment. GoCompare Group plc, which operates UK comparison website GoCompare, joins co-investor UAE Exchange Group and lead investor, and Saudi-based Riyad TAQNIA Fund (RTF) owned by Riyadh Bank.

“There are more opportunities coming out of Saudi. I do believe, having seen the three of us [Souq.com, Careem, and Souqalmal.com] do it, there are more opportunities to go out there and tell people about successful SMEs in the region, because a lot of investors do not even know that we exist here. The start-up ecosystem is getting bigger and it’s growing extremely fast. Fintech was only really spoken about a couple of years ago. Now there are a number of fintech hubs coming up. I think whoever is looking for funding should not just look within the region,” said Ambareen Musa, CEO and Founder of Souqalmal.com.

This announcement quickly followed the news of Amazon's acquisition of Souq and Didi's backing of Careem, in e-commerce and transport respectively, which Musa said should show investors that interesting things are happening in the region.

Ivo Detelinov, Vice President and Head of Private Equity Funds at Riyad Capital echoed the optimistic sentiment that this announcement could well boost the profile of SMEs. “There is an understanding that the region must move away from [its dependency on] oil and Vision 2030 is just one example.

Then there is a number of ministries– commerce, labour, finance–with multiple projects, within Saudi Arabia but the UAE as well. Each of those countries has an SME authority. There is recognition that there is a funding gap for the SMEs, banks may or may not loan and SMEs need equity, not debt.”

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FAST FACTS

Dubai CommerCity, a AED 2.7-billion joint venture between DAFZA and wasl Asset Management Group, has been launched in the Umm Ramool area. Dubai CommerCity, the first free zone dedicated to e-commerce in the MENA region, is intended to promote Dubai’s position as a leading platform for international e-commerce and to support economic diversification and smart transformation strategies.

Dubai CommerCity has a plan to attract more foreign direct investments (FDI) through an integrated portfolio of products and services according to the highest international standards. It is intended to be a coherent environment that promotes entrepreneurship through a modern ecosystem that facilitates the conversion of creative ideas into reality. The project will help foreign investors establish a presence and expand in this field and allow young innovators and entrepreneurs to pursue promising opportunities within the e-commerce sector, which serves as an ideal platform for establishing start-ups and sophisticated projects in line with efforts to make Dubai the smartest city in the world.

“Dubai CommerCity complements the expansion plans and achievements led by DAFZA aimed at attracting foreign direct investments to Dubai, driven by its vision, ‘The free zone that goes beyond,’ in cooperation with wasl Asset Management Group with which we have a successful partnership,” said HE Dr. Mohammed Al Zarooni, Director General of DAFZA. The new free zone will also drive steadily growing private investment activities supporting the region’s startups which have already exceeded $870 million, especially as most start-ups are involved in e-commerce, IT and internet-based services, of which the UAE has the largest share in the region.

SOUQALMAL.COM ATTRACTS INTERNATIONAL INVESTOR

S

DUBAI COMMERCITY FIRST REGIONAL E-COMMERCE FREE ZONE

ITY ACROSS TH TIV EG C A CC ME

MILLION EMPLOYED BY GCC SMES

30% OF UAE GDP

28%

OF BAHRAIN GDP

22% OF KSA GDP

17%

OF OMAN GDP Source: BLOOVO.com

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THEY GOSSIP

TOP TIPS

THEY TAKE CREDIT FOR OTHER PEOPLE’S WORK

One of the most frequent complaints we hear in our employee engagement surveys is that somebody on the team ‘takes credit for my work.’ Letting this behaviour continue will undermine trust within your department.

One thing about toxic employees is that they are always eager to hear and share the latest dirt, and the gossip they are most excited about includes anything negative. Spreading critical, destructive gossip may release endorphins that some people get a charge from, but it will kill team morale.

THEY ‘MAKE THE ROUNDS’

Toxic employees often ‘make the rounds’ of leaders in the organisation.

This does not mean that employees shouldn’t be able to have relationships with higher ups other than their manager, but you’ll notice the toxic spend very little time chatting with peers or those under them. They will spend an inordinate amount of time working the upper rungs on the ladder.

five ways to spot a toxic employee

Toxic employees can do damage to your team and spotting them soon is essential, according to Chester Elton, Partner and Founder of employee engagement training and coaching provider, The Culture Works

SHUTTERSTOCK.COM/BY STOKKETE

THEY ASK A LOT

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Who demands more money, more attention, more perks?

More often than not, it is the team’s whiners, not its stars. The toxic team members are generally the one who are constantly saying how underpaid, overworked, and underappreciated they are. The next time one of these individuals makes an ultimatum, call their bluff–“You are right, you probably could make more money at a competitor.

I wish you all the luck in the world.

Should we say Thursday is your last day?”

THEY DO NOT ROOT FOR OTHERS

Sadly, toxic employees tend to treat people above them like gold, but their teammates less so. They are too busy to chip in and help others out, you never hear them cheering for teammates to win, and in most cases they have only a superficial veneer of interest in your clients.

VAT WATCH

GCC VAT-update

While the executive regulations are due to be published soon, the Federal Tax Authority has released some updated information concerning VAT Deadlines • Businesses with a turnover exceeding AED 150 million must apply for registration before 31 October 2017.

• Businesses with a turnover exceeding AED 10 million must apply for registration before 30 November 2017.

• All other business entities that exceed the AED 375,000 threshold, must submit their application before 4 December 2017.

• Businesses are advised to keep these deadlines in mind to avoid not being registered when VAT goes live, which is scheduled for 1 January 2018.

• In order to register, businesses are required to set up an online account on the FTA website and complete the online registration form.

SHUTTERSTOCK.COM/DUNCAN ANDISON

Place of supply • The place of supply will determine whether a supply is made within the UAE, in which case the UAE VAT law will apply, or outside the UAE for VAT purposes.

• For a supply of goods, the place of supply should be the location of goods when the supply takes place with special rules for certain categories of supplies, such as water and energy and cross border supplies.

• For the supply of services, the place of supply should be where the supplier is established with special rules for certain categories of supplies, such as cross border supplies between businesses.

taxable at the standard VAT rate of five per cent.

• Supplies of residential properties will generally be exempt from VAT. This will ensure that VAT would not constitute an irrecoverable cost to persons who buy their own properties. In order to ensure that real estate developers can recover VAT on construction of residential properties, the first supply of residential properties within three years from their completion will be zero-rated.

VAT will be charged at zero per cent in respect of the following categories of supplies • Exports of goods and services to outside the GCC; • International transportation, and related supplies; • Supplies of certain sea, air and land means of transportation, such as aircrafts and ships; • Certain investment grade precious metals, such as gold and silver of 99 per cent purity; • Newly constructed residential properties, that are supplied for the first time within three years of construction; • Supply of certain education services, and supply of relevant goods and services; • Supply of certain healthcare services and supply of relevant goods and services.

Real estate

categories of supplies exempt from VAT

• The VAT treatment of real estate will depend on whether it is a commercial or residential property.

• Supplies, including sales or leases, of commercial properties will be

• The supply of some financial services (clarified in VAT legislation); • Residential properties; • Bare land; and • Local passenger transport.

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VAT grouping • Businesses that satisfy certain requirements covered under the legislation will be able to register as a VAT group. For some businesses, VAT grouping will be a useful tool that would simplify accounting for VAT.

Penalties Examples of actions and omissions that may give rise to penalties include: • A person failing to register when required to do so; • A person failing to submit a tax return or make a payment within the required period; • A person failing to keep the records required under the issued tax legislation; • Tax evasion offences where a person performs a deliberate act or omission with the intention of violating the provisions of the issued tax legislation.

The full list of violations and penalties is available on the FTA website.

SMEs • No special rules are planned for SMEs. The FTA will provide materials and resources available for these entities to assist them in their enquiries.

VAT between the emirates • Businesses will likely need to complete additional information on their VAT returns to report revenues earned in each emirate. Guidance will be provided.

• It is expected that the rules will be relatively straightforward for most businesses and will be based on the location of the transaction.

Source: The UAE Federal Tax Authority

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OPINION

Accounting

–better get started With VAT a few months away, Arshi Kaura at Legends Accounting discusses how small business owners can get their financial reporting in order

S

ME owners must maintain good financial relationships with their suppliers, customers, and their employees. Suppliers enjoy working with companies who are good pay masters; they are likely to go the extra mile to provide quality service.

Proper accounting practices will help ensure timely and accurate payments to suppliers, otherwise overpayments and mistakes may impact cash flow. With the looming implementation of VAT in the GCC, which requires businesses to keep proper financial records, this is more important than ever.

WHAT YOU NEED TO KNOW Depreciation and amortisation of tangible and intangible assets are often not taken into proper consideration.

All businesses need assets to operate and when an asset is purchased it sits on the balance sheet and is not immediately expensed in the profit and loss (P&L) statement. These assets fall under two categories–tangible and intangible.

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Tangible assets can be physically touched, such as such as computers, vehicles, and furniture, and intangible assets are useful for the business but cannot be touched such as software or a website.

When tangible assets are written off in the P&L account, it is called depreciation; when this is done for intangible assets it is known as amortisation. It is important that assets are depreciating or amortising the same as per the life of the asset.

To determine the life of an asset or period over which it is to be depreciated or amortised, the nature and type of business and the usage of asset should be considered.

If a business buys a computer for AED 3,600 and the expected life of computer is three years it will be depreciated at AED 100 per month over 36 months. A car purchased by car rental companies will have a life of around two to three years, while a car purchased by a company for its director will have a longer life of about four or five years.

Providing for employee requirements such as government mandated gratuity and health insurance, as well as extras such as airfares if they fall under the company’s policy, also need to be kept in mind.

These amounts should be provided for monthly to avoid a sudden lump sum hit on the P&L account.

It is also important for business owners to understand the concept of accruals and prepayments. Accruals provides for incurred expenses while waiting for the invoice from the supplier for services, such as monthly accounting fees and utility bills. Unpaid salaries to employees also fall under accruals.

Prepayments cover expenses, such as medical insurance, in advance.

It is normally paid upfront for the full year. Instead of charging the complete premium in the month of payment made, it is expensed over the period of insurance cover, normally 12 months.

For example, if a company pays a medical insurance premium of AED 24,000 for 12 months, rather than charging the whole amount of AED 24,000 in the

Customer invoices must be issued on time every month, and proper follow up for timely payment must be a priority to ensure the business maintains proper cash flow.”

–Arshi Kaura, Managing Partner, Legends Accounting

P&L account, the full prepayment will be booked in the balance sheet and each month AED 2,000 will be charged as an expense over 12-month period.

Post-dated cheques (PDC) are often neglected due to non-accounting. It is essential to keep a tab on PDCs owing to the ramifications if the cheques are not honoured. Ideally it is better to make payments via direct bank transfers rather than paying through a cheque or post-dated cheque, to avoid any issues with them bouncing.

However, all businesses face situations where they may have to issue a postdated cheque for expenses such as rent. In this case the business owner must maintain a separate list of PDCs issued and should update this monthly, and refer to this list while preparing or updating the cash flow as well.

Managing cash flow is one of the biggest pain points for SMEs. Customer invoices must be issued on time every month, and proper follow up for timely payment must be a priority, to ensure the business maintains proper cash flow.

Accounting not only helps management utilise their resources properly, but also keeps everything on track, leading to the growth and success of business. By making sure to analyse the monthly performance of their business through monthly reporting, a business owner can take corrective and timely action if required as well as plan their business strategy accordingly.

SOFTWARE When setting up their accounting system, an entrepreneur needs to select the appropriate software for the business’s needs. Accounting software can either be cloud based or a desktop installation.

With more businesses becoming mobile, and with staff working remotely, many business owners opt for cloudbased accounting software, such as Xero, Quickbooks online, and Netsuite.

The major advantage, particularly for a smaller business just starting out, is that cloud-based software allows users to pay a nominal monthly subscription.

This also allows accounting to be easily

outsourced, either to an individual or an accounting firm. Outsourcing this activity can save a business owner a lot of time, especially in the early stages of the business when they are performing a lot of the business functions alone.

Once the business becomes more established, the larger lump sum payment for the desktop version of accounting software may be more feasible, and a fulltime employee can be brought on board to perform the task in-house.

Regardless of the working arrangement, the business owner needs to make sure the person responsible for managing accounts is aware of expectations placed on them and how their work will be monitored. A proper chart of accounts to suit the business type and needs should include where data such as time sheets, stock movement, online sales, and project management will be captured. It is advisable to opt for software that integrates these with the selected accounting software to minimise administrative burden and avoid duplication of work.

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LEGAL FOCUS

Keep it in the family Siobhan Crick, from asset manager, SANNE, discusses the different approaches taken by GCC families to succession planning

C

ollectively, the largest GCC familyowned businesses generate around $100 billion annually, according to a recent study by the Gulf Family Business Council (GFBC) and McKinsey & Company.

In the GCC, between 70 and 80 per cent of the private sector belong to this category, making family-run enterprises the backbone of regional economies, according to research by Orient Planet. The study highlighted key issues such as corporate governance and succession continue to challenge family-led enterprises in the region.

Furthermore, governance, financial and succession worries are turning into challenges due a number of factors, such as the force of globalisation, the rising number of family members in each generation, the growing size of the company, and the difficulties associated with succession planning.

There is a growing trend in the GCC for families to consider a more international approach to asset diversification and bringing their business in line with international

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governance standards when it comes to succession planning.

Family governance generally covers areas of estate planning, leadership transition during the generational change, recognition of family fairness and establishment of family protocols. The dynamics of family firms is inextricably linked to the life cycle of families, and governance mechanisms need to react to changes and developments during that life cycle to help conserve the family legacy.

Dynastic planning can be difficult to address because it requires sensitive discussion, not only between siblings and different generations of family members, but often between the principal and the advisors. Families often already have a strategy in place, only to find on closer inspection that it is no longer fit for purpose. This can be due to changes in family dynamics, within the regulatory landscape, or the direction of the business.

While structuring has always been more prevalent outside the GCC, largely due to local tax regimes, a renewed

use of vehicles such as trusts for their original purpose–asset protection and the passing of generational wealth– is becoming the norm. GCC families are also diversifying interests through cross-border activities, particularly by acquiring global real estate and private equity investments, through structures based on the asset’s location.

Female entrepreneurs are also looking for creative and bespoke solutions to protect their legacies.

Women want their children to be financially secure and not bare financial or legal stress that can occur after a loved one passes away.

Having built an empire, the next step to financial legacy is to provide for intergenerational wealth.

The need for robust private client and structuring solutions with a global capability is becoming a core requirement as GCC families’ businesses take on a wider international footprint.

Increasingly, women entrepreneurs are involved with co-investment structures to take advantage of within their region and offshore. Special Purpose Vehicles

Dynastic planning can be difficult to address because it requires sensitive discussion, not only between siblings and different generations of family members, but often between the principal and the advisors.”

– Siobhan Crick, Director Private Clients, SANNE

(SPV) from various jurisdictions are popular, often through Shari’ahcompliant arrangements.

A key difference for GCC clients is the application of Shari’ah law, which will affect planning and related operations for the individuals involved, their families and their business interests. We have seen first-hand how simple Mudarabah and Istisnah financing structures can be used for Shari’ah-compliant solutions. These types of structures are being used more and more, and a reduction in the use of them is unlikely.

There has also been a greater uptake in the use of Dubai International Finance Centre (DIFC) Special Purpose Companies (SPC) that are incorporated under the laws of the DIFC. These may only be used for exempt activities which include acquisition, holding or disposal of any asset, obtaining financing, granting of security, providing indemnities to shareholders or subsidiaries, acting as trustee or the financing of another SPC. A key reason for SPCs being so attractive is that no corporation tax

will be payable on them until at least 2054, which has been guaranteed by law. Most interestingly, 100 per cent foreign ownership is permissible under current legislation.

TRUSTS It is still a developing area for principals to consider using trusts for succession planning, which includes establishing a holding structure that governs the ownership of shares and other assets, and clearly sets out the family members’ rights and responsibilities.

Through the introduction of more flexible options, such as foundations or private trust company structures, the principal can continue to still retain an element of control while engaging with independent directors who sit alongside them. These individuals, who may include other family members, can form advisory boards or a family council. These groups are put in place to ultimately improve the governance of the business.

Another popular topic within the region is foreign ownership restrictions, allowing only GCC

nationals to own certain types of local assets. These planning opportunities remain challenging today. That said, there is an appetite to structure family assets as demonstrated by the introduction of new vehicles, such as DIFC Trusts.

GCC clients are generally reticent to proceed to implementation until they have been tried and tested by others. For this reason they tend to favour Jersey and Guernsey as the preferred jurisdictions with regard to trusts, and to a certain extent Jersey and Guernsey foundations alongside the Dutch foundation.

When planning for the future of the company and the family, a business owner has to ask themselves what kind of legacy they want to leave.

Appointing external executives tasked with ‘internationalising’ such business can ensure the founder’s vision lasts for generations. Their succession goals can be achieved by finding a trusted service provider with a global reach, who understands that the entrepreneur has their own goals, dreams, and aspirations for the business.

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CHALK TALK

OMAIRA FAROOQ ALOLAMA The Emirati Managing Director of ALF Administration is passionate about developing the skillset of UAE Nationals in an effort to contribute to the development of her country I went to the University of California, San Francisco. I did a double major in psychology and political science for my Bachelor’s. In my junior year I had to take an elective course by Professor Esther Madriz called ‘The Art of Criminology’. I just thought it was going to be one of those CSI classes and wondered, how boring could it be?

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At our first class she told everybody we were going to take a trip. There were about 15 of us. We got on the bus and we went to the Santa Clara penitentiary which was about an hour and a half outside of San Francisco. She said we were going to learn what it means to be a criminal and what it means to differentiate

between reforming and punishing a criminal. When I did my Master’s in New York I would always keep in touch with Esther.

We all fell in love. Every single one of us ended up getting a Master’s in criminology; that is how much she impacted us. She believed that reforming a person would add so

Emirati youth are eager. They want to work; they want to improve, and slowly the way people view young UAE Nationals is changing."

– Omaira Farooq AlOlama much more value to society than punishing that person and locking them away for a set amount of years.

In 2002 the UAE Government started taking note of what UAE Nationals were studying in the US. We had to report back to the UAE embassy. The Government was looking at where these UAE Nationals could add value in the country when they came back.

When I graduated in 2003, we received an email saying I needed to come back to the UAE. The Government was heading up different departments in the health sector.

One of them was a psychology and psychoanalysis unit and there were not a lot of UAE Nationals in that field.

So my father–without consulting me– said, 'Sure, she’ll be there!'

I left in 2006 when I was offered a position by Dubai Holding. A lot of the team were either US born, raised, or educated there so we all seemed to mesh; we were on the same wavelength. It was a lot of fun but I felt there was something more I could do. When I went to training with the rest of the team I would notice many of them weren’t connecting with the trainer. The trainers came from different parts of the world–America, South Africa, Egypt, Lebanon, India.

Each and every one of them was really good and I would enjoy their classes. I do not know if it was my background that just made it easier to mix with different cultures, but I would watch a lot of my UAE National colleagues get bored, sit on their phone, or just walk out of class. Something wasn’t clicking.

In 2010 I decided to speak up.

I asked one of the younger Nationals why they do not enjoy the training courses and they said well they did not have a connection to the trainer.

That got me thinking.

I remember Esther’s comments; she would always say that you had to have a connection with someone.

I sent her an email and it bounced back which I thought that was odd. I contacted a fellow student who was with me in college and asked if anyone had been in touch with Professor Madriz because I would really like her advice on something. She told me she had passed away from breast cancer. That woman really shaped me. Regardless of who else she may have shaped in the world, she made an impact on me. Then and there I thought, 'What is my legacy? What am I leaving behind as Omaira?'

In 2011 I told my dad I was going to open a training company. He asked me what kind of training company. He said, 'You want to leave a legacy, what is going to set you apart from every Tom, Dick, and Harry? There are many training companies here. I know you because you’re my daughter. I did not know you why would I hire you over somebody else who has been doing training for 25 years, with a large number of employees?'

I said I would have a training company that only works with UAE Nationals. I would also work on training and developing them, while working closely with the companies that hire them. Furthermore I do not mind if they do not pay me as much as they pay

other training companies, but I will only work with them if they promise to show me a career path for the UAE Nationals.

We started from scratch. The first question was how we could give back to the communities. As a divorced woman, the first group I thought about was divorced and widowed women; I would go to places out of Ras Al Khamiah and Fujairah and talk to these women to find out what was going on their lives. Many of them are divorced or widowed and do not have an income. I said I would buy them a computer and teach them basic skills. Some were apprehensive; some were willing to try.

We are never going to be a huge corporation. We do not want to be; although I feel we could do a lot more if Government entities backed us up a bit. Participants have to pull their weight to stay in our classes. If they miss more than one class, they are not welcome back. We have a waiting list of Emiratis who want to join us.

We have students who were working high school graduates who thought they would never get anywhere. In fact, we recently received a call to say that one of them applied for university, went in for the entrance exam, passed that and is already in his first semester.

Emirati youth are eager. They want to work; they want to improve, and slowly the way people view young UAE Nationals is changing. Tomorrow if I’m not here, I know I have done something for my people.

At this years’ FinanceME’s Business Vision Awards, Omaira Farooq AlOlama was the winner of the Inspirational Person of the Year.

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CEO CHAT

The convenience of digitalisation will eventually enable us to move slowly away from the brick and mortar setup as well as the physical need for cash.� – Adeeb Ahamed, Managing Director, Lulu Exchange Holdings

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DIGITAL DIVERSIFICATION Adeeb Ahamed, Managing Director, Lulu Exchange Holdings, discusses the considerations made as the company develops its online presence

What market gap was Lulu Exchange started to fill?

Lulu Group International is one of the most recognised brands in the Middle East, and the group had, for quite some time, wanted to take its pedigree of service excellence to the financial services industry. The thrust behind starting Lulu Exchange came from its employees and loyal customers who wanted fast, safe and reliable financial services.

Retail businesses around the world, including the likes of Walmart, Sainsbury’s and Tesco’s have all have, at some point in time, diversified into the financial sector. I believe that it was a natural development for the group.

Moreover, we did not want to stay in the bracket of just being a remittance service provider; we wanted to establish ourselves as a one-stop payments solutions provider. Over the years, we have increased our portfolio and services, with the help of the latest technology and the need of the hour.

Lulu Exchange launched in September 2009, off the back of the financial crisis. Why did you launch the business then, and what hurdles did you face, and how did you overcome them?

There are always risks involved in any business that you take up, be it at the

heights or lowest points of the market.

After moving to the UAE in 2008, it was a challenge setting up Lulu Exchange, as my previous experience lay in hospitality. But taking each task at a time, we were able to launch Lulu Exchange successfully on the back of our distinctive offerings, with a team that stood by our vision. There were the initial hiccups that are relevant with any new venture.

To cite an example, it was previously a requirement from authorities to open branches for which licences had been given in the same calendar year. This was quite a challenge for us, because we had to mobilise resources, commit to suitable premises, and complete the process within the deadline. Now we have an entire year from the approval of the licence to get our branch up and running.

Secondly, as we began in a challenging environment, it took us time to get the required traction to break even, but gradually we got our foothold and we have never looked back.

We are proud to say that in the span of just over eight years, Lulu Exchange has spread to over 170 branches across UAE, Oman, Bahrain, Kuwait, Qatar, India, Seychelles, Bangladesh and the Philippines with more than 1500 employees.

What were the regulatory challenges that had to be overcome and how did you manage this?

Guidelines from the regulatory authorities allow the sector to become more streamlined. More than being challenging for us, the regulations allowed us to become more efficient, technologically up to date and ensured everyone in the sector kept on a level playing field.

We had close coordination with the industry body, the Foreign Exchange and Remittance Group (FERG), which provided guidance for any issue that we had.

FERG has over the years held regular meetings and taken up issues with various regulatory and government authorities with the objective to enable easier operational norms and created a more conducive business environment for our industry in the UAE. Were there any unforeseen challenges along the way that you could not have anticipated?

What were they and how did you address them?

Challenges, whether expected or unexpected, are a part of any business.

A challenge flexes our minds because it brings us to the current limit of our thinking and forces us to learn and adapt. Through our well-knit team, cont. overleaf

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CEO CHAT cont. from pg. 19

we have always strived to tackle any oncoming tasks and have strived to sustain our growth momentum.

When we started our business, we made it a point to register each and every customer that came to the premises for transaction. It was initially difficult, as it was a bit different from the industry standard that was followed.

But the process allowed us to further reinforce our know your customer (KYC) system, while also strengthening our anti-money laundering (AML) and compliance facilities.

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Do your wage and salary administration services assist smaller companies in any way?

If so how?

Our wage and salary administration services cater to all types of companies.

The Wage Protection Scheme (WPS), launched in 2009 by the Ministry of Labour and the Central Bank of UAE is a pioneering programme that fosters employee productivity and loyalty and protects the rights of workers within the UAE by ensuring timely and accurate payment of wages and salaries.

They have helped streamline payments to the workers across sectors and our product MyPay:MyCard–the WPS compliant debit card–provides a holistic and simplified payroll management system for companies, as seen by its rapid adoption among a sizeable number of companies and catering to more 200,000 employees.

We have relationship managers for company specific assignments to take care of the requirements. Furthermore, we also have provision to instantly pay the salary on request from the

The one-stop financial services company has grown from a single branch in Abu Dhabi to over 170 outlets spread across nine countries.

companies, as we have kept sufficient funds with the authorities to take care of such eventualities, thereby providing a better service than other players.

What has been your strategy to grow the business and expand its portfolio of offerings?

Many initiatives have been taken up both in the public and private sector for moving towards a digital tomorrow we but also believe that the financial services industry will incorporate this technological shift. While brick

and mortar establishments will not completely disappear, a major chunk of business will shift to the digital platform. With better convenience and ease of selection, digital business is the way forward.

The evolving landscape of financial services depends on the demands of the customers and their involvement with technology. Apart from the traditional players like banks and exchange house, the payments industry is today a very competitive space–technology companies, hardware manufacturers, telecom companies are all trying to get a piece of the pie.

The convenience of digitalisation will eventually enable us to move slowly away from the brick and mortar setup as well as the physical need for cash. It will also bring down the cost of operation, creating a more sustainable turnover margin.

The UAE government is ranked number one in digital adoption among Middle Eastern countries and matches the digital frontier countries according to Digital McKinsey and Euromonitor International. They have spearheaded various digitisation initiatives, such as expanding broadband coverage, creating a unified smart-city platform as well as creating a hub for fintech startups. All these and more makes UAE a model nation to follow when it comes to the use of technology to promote social money.

The GCC already has the infrastructure in place to support sophisticated digital transactions between individuals, as well as between consumers and financial institutions.

We have always strived to be at the forefront of technological developments and to offer state-ofthe-art services in all our branches.

We are in the advanced final stages of

our app that encapsulates all services that are available in our brick and mortar branches, and are awaiting approval from regulators. Regulators have their own evaluation process to look into various aspects of the mobile app, including cybersecurity.

Since the app involves the transfer of money, they need to make sure that the platform is a robust one.

We are on track to move nearly 30 per cent of our transactions on to the digital platform by 2020.

What are your thoughts on VAT coming into the GCC? How will it affect your company and what steps have you taken to ensure you are ready?

The introduction of VAT is an inevitable transition for any growing economy. The impact of such a tax depends on the guidelines issued by the respective countries and the amount of tax that will be levied.

If the tax amount is of a very small percentage, it would not have a significant impact on the residents.

The leaders of the GCC countries have always looked after the welfare of its residents, who are an integral part of this region’s economy. I am confident that any decision affecting businesses in the GCC are decided by the individual country’s visionary leadership after careful thought and thorough research.

While it is too early to comment on how VAT will affect businesses, steps should be taken by companies to effectively transition to a tax payable environment in the next couple of years. Nonetheless, GCC countries are investing billions of dollars into developing infrastructure, such as airports, malls and metros. Coupled with the upcoming global events such as Expo 2020 Dubai, we can expect a huge influx of foreign workers, which all points towards a positive outlook for the region.

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COUNTRY FOCUS

KEEPING UP WITH KUWAIT SHUTTERSTOCK.COM/BY PATRICE6000

The Kuwaiti Government has made amendments allowing for streamlining the company registration process, while setting up an incubator to help them grow

K

uwait’s economy grew by an estimated three per cent in 2016, following higher oil production and implementation of the Development Plan, with a partial recovery in oil prices over the past year easing pressure on fiscal balances slightly, according to GCC: Economic Outlook–April 2017 by the World Bank.

The report added that OPECrelated oil production cuts should slow Kuwait’s GDP growth to 2.5 per cent in 2017, down from three per cent in 2016. Both current account and budgetary pressures should ease on the back of a partial recovery in oil prices and rising output, with the baseline assuming gradual implementation of spending and revenue reforms including the introduction of GCC VAT in 2018.

Under the framework agreement signed by each of the GCC member states, two of the countries have to

22

implement VAT from 1 January 2018 in order for it to be enforceable. The Kingdom of Saudi Arabia and the UAE have both committed to this deadline and denounced any rumours of delays.

Kuwait is likely to implement VAT from 1 January 2019, along with Bahrain and Oman, and an announcement was made on 7 August 2017 that the cabinet approved the draft bill.

Pratik Shah, Resident Partner and VAT Expert at W T S Dhruva Consultants, said that legislators are likely to take references from VAT legislations published in KSA and UAE; thereby ensuring uniformity in provisions as much as possible. He added that it is likely that there will be a study done to analyse the economic activity in Kuwait to determine the potential number of VAT registrants and revenue based on VAT roll out in UAE and KSA. The most critical requirement will be to prepare IT systems for online services, to enable

them with the required hardware and network bandwidth.

“Businesses are mapping their transactions footprint vis-à-vis VAT guiding principles laid down in the framework agreement and other jurisdictions such as KSA and UAE. They are also working on resource planning and their overall VAT implementation roadmap to ensure that the prescribed timelines are met,” said Shah.

One of the reasons for the delay in implementation by Kuwait is that the Government is seeking to minimise the impact of VAT on citizens and lowincome earners. Finance Minister Anas Al-Saleh said the Ministry was studying alternatives to safeguard low-income individuals from the negative impacts of economic reforms linked to lower revenues from oil, according to media reports.

Expected VAT revenue for Kuwait at five per cent would equate to

Kuwait has approximately 60,000 registered companies of which around 25,000 can be considered SMEs. The number of SMEs in Kuwait is high and small business employ approximately 23 per cent of the country’s total workforce, this number is less than half of SME employment figures for both high income and emerging economies, according to the World Bank. However, in spite of these numbers, small and medium enterprises contribute only around three per cent to the country’s GDP. This numbers are worrying when compared to emerging economies where World Bank statistics suggest that SMEs comprise 50 per cent of the economic activity in the private sector while contributing to 40 per cent of GDP figures.

In 2015, the IMF indicated that SMEs account for about 50 per cent of licences granted to new businesses in Kuwait but receive only about 2.3 per cent of total corporate loans.

SMEs are ‘underbanked versus the rest of the world’, according to recent data by the Kuwait Institute for Banking Studies (KIBS), with SME credit comprising only seven per cent of total bank financing in Kuwait compared to World Bank estimates of 13 per cent in developed and 26 per cent in developing countries.

Berkeley Research Group (BRG), under commission by the Kuwait Foundation for the Advancement of Sciences (KFAS) and KAMCO Investment Company, studied the different considerations facing Kuwaiti entrepreneurs in terms of cont. overleaf

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approximately 1.4 per cent of GDP, according to IMF calculations. While VAT is tax neutral and doesn’t directly affect businesses, it will have an impact on compliance costs and cash flow management, two areas that if mismanaged could potentially cripple an SME. It is paramount for small business owners to take into account the impact of time of the supply because VAT is chargeable at the earliest date of supply, issuance of an invoice or full or partial payment.

The delay in implementation provides an advantage to Kuwait’s SME sector because the longer lead time allows for proper preparation for VAT registration. SME owners also have the opportunity to observe how the sector navigates VAT implementation in the UAE and Saudi Arabia.

COUNTRY FOCUS

cont. from pg. 23

setting up, financing, and possibly relocating their companies.

According to BRG’s research, Kuwaiti Nationals have several options to raise capital for new entrepreneurial ventures available, including private money; Kuwait has one of the highest savings rate in the world. However, there are some structural barriers that include banks’ concern about the management skills of SMEs and perceived high risk of default create difficulties in raising fund for expansion and development, overseas incorporation of SMEs and some typical concerns of having debt in the business.

The Kuwaiti parliament approved of the proposed amendment of Companies Law No. 1/2016 in April this year, which eases procedures

for establishing companies and attract investments from young entrepreneurs. Investors are no longer required to deposit capital before establishing a company. The establishment of companies used to take 61 days which was reduced to four. This latest amendment has shortened the time further to one day.

At the end of August 2017, it was announced that the National Fund for Small and Medium Enterprise Development is reviewing a new policy to improve procedure for obtaining a licence or land under full Government support.

Chairman of the Board and President Abdullah Hamad Al-Jouan said that the Funds's new strategy relies on working with various

government establishments to make it easy for the young entrepreneurs to own their own business, according to media reports. One of the focus points of the Fund is to increase the GDP of SMEs in Kuwait and the new procedures to be set in place are likely to decrease the processing period by 60 per cent, the list of documents required to set up a new enterprise has been reduced from 15 to seven.

The Fund was established under Law 98 of 2013 to assist young entrepreneurs develop businesses, combat unemployment, and boost the growth of the private sector. The Fund has a total capital of KWD 2 billion and will finance up to 80 per cent of capital for feasible small and medium projects submitted by Kuwaiti nationals. As of

LONDON

“This is the room where I think, the room where I dream, the room where I design.

Now, this room is limitless.”

Erich, Architect

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the end of June 2016, the Fund has financed 307projects,including 178 small businesses.

INCUBATING CREATIVITY The World Bank Group estimates that the creative industry (CI) contributes as much as seven per cent to global GDP, with an expected growth rate of about 10 per cent a year, and Kuwait’s CI base isn’t far behind that of other high-income, fast developing economies. These figures are in spite of the limited initiatives offered for working in the SME sector, which has about 35,000 individuals. Kuwait’s CI is one of the largest non-oil sectors in the country and equates to around 24 per cent of the value of the non-oil manufacturing sector and 72 per

cent of the business services’ sector.

The Lattanzio Consortium (made up of three enterprises from Italy) conducted research for the Fund found that the CI has reached a considerable size; it is approximately 1.5 times that of food and beverages manufacturing, five times that of machinery manufacturing, and eight times that of plastics.

A Creative Industries’ Hub opened in January 2017 to support earlystage businesses or start-ups in market entry, as well as in business development for improving their competitive edge, by offering two two programmes: an incubation programme for start-ups and a business development programme for businesses. Applicants with different levels of experience are

welcome, though they are only open to Kuwaitis who are at least 21 years old.

Entrepreneurs seeking to take part in the business incubation programme had to submit their creative portfolio or initial business idea. The business development programme is designed to assist SMEs to reach their full potential; applicants had to have completed at least two years of operations.

Both programmes offer a co-working space at the CI Hub, coaching, mentorship, business and creative skills training, and networking.

The programmes are offered by the National Fund and implemented with WithFounders accelerator, Istituto Europeo di Design (IED), and Lattanzio Advisory.

2016 POPULATION: 4, 437,590

3% – SMES CONTRIBUTE TO GDP 23% – WORKFORCE EMPLOYED BY SMES 7% –TOTAL BANK FINANCING FOR SMES IN KUWAIT

2016 KUWAITI POPULATION: 1,351,955

(30.47%)

2016 NON-KUWAITI POPULATION: 3,085,635

(69.53%)

60,000 – REGISTERED COMPANIES 25,000 – COMPANIES DEFINED AS SMES

35,000 – INDIVIDUALS WORKING IN KUWAIT’S CREATIVE INDUSTRY

Source: World Bank Group and Kuwait Institute for Banking Studies (KIBS)

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EMPLOYEE ENGAGEMENT

EMPLOYEES –ENGAGE! Employees who feel appreciated while working in a healthy environment will go above and beyond to ensure the business succeeds

R

ecent research revealed that more than 80 per cent of employees in the Middle East and North Africa (MENA) region claimed to feel very engaged at work.

An industry poll which reported on employee engagement in the region revealed that 57.1 per cent employees believed that their company’s management makes job satisfaction a top priority. Engaged employees are willing to go the extra mile for their company, driven by passion and a profound connection that motivated them to desire success.

Many small firms generally see employee engagement as abstract, or reject it as something they do not need, assuming that fewer staff means processes can be informal, but this can leave many issues to go under the radar.

But smaller businesses, with fewer

26

team members, can address the issues of employee engagement quicker than a larger company which has a number of cumbersome processes.

Larger companies tend to be tremendously political places; one of the things that people get frustrated or disengaged about is that they feel unfairly treated, according to Lewis Garrard, Occupational Psychologist at employee assessment organisation Mercer-Sirota. The reason for that is large groups in a bigger organisation are political entities: groups of people influencing each other to get stuff done. There are almost winners and losers, even though there shouldn’t be.

“What I often see when I work with smaller organisations is that it is really clear who the leader is, and that person plays a bigger role in the staff’s overall engagement and their positive attitude

towards work. Because it tends to be a less political environment, SMEs can do better. They can create better work experiences for people because the team is less likely to feel unfairly treated. It is more likely to feel like a community than a big company is,” said Garrard.

Rachel James, Head of Marketing and corporate training firm Biz Group said that the key to establishing high levels of employee engagement is making sure that every single person feels connected to the overarching purpose of their organisation. By understanding their own role in achieving that purpose, they can measure their own success and progress.

Communicating (and repeating) that overarching purpose should be easier for smaller organisations.

If an employee is not engaged, they naturally start to feel their role is insignificant and that ‘it’s just a job’, doing the bare minimum, until it is the right time to jump ship and look for the next best opportunity.

– Khaled Fathi, Managing Director, Inspativity

“Individuals can review their job role and connect their responsibilities to that higher purpose. Whether it is through a line manager, a mentor or even a peer these responsibilities can tracked discussed and measured which will instantly improve engagement levels,” she said.

Further advantages SMEs have to engaging their employees include getting to personally know everyone in the company as well as arranging postwork social events, said Khaled Fathi, Managing Director at Dubai-based HR consultancy Inspativity. “This regular need for interaction accelerates the norming stage of a team and in turn increases cohesion quite rapidly. It’s easier to relate to others, identify common interests and relate more to others when the interaction is on a daily basis. As most of our clients are medium to large enterprises, we consistently observe that even with a larger number of employees, those within a single team tend to bond together and know about each other more than the wider population.”

Ibrahim Colak, Co-Founder of online market place mrUsta added that fewer employees, open workspaces, and more manageable offices all lend credence to the advantages of engagement within a smaller organisation. “Smaller businesses also allow more transparency when it

comes to the impacts and decisions made by the employees; this exposure gives ownership to everyone within the organisation of the ramifications of their own actions and allows everyone to grow in parallel with the business.”

It is not enough that SMEs lend themselves to better employee engagement, small business owners are still required to make a concerted effort to leverage the advantage of their size by cultivating a high-performance work environment. Colak said this starts with hiring the right talent, providing them with clearly defined departmental and organisation-wide targets, and allow for total visibility and transparency across all touch-points.

Next, small business owners need to get to know their staff as quickly as possible, including their likes, interests, preferred way of working and aspirations.

Fathi advised that small business owners engage them in what they really enjoy and be receptive to ideas on how to grow the business and improve existing processes; demonstrate empathy and understanding to their specific needs and anticipate them whenever possible.

“Act as a role model. Employees would look up to the leader, particularly for enthusiasm and passion towards the business. It is crucial that they constantly feel they have a north star to follow, and that the captain is always hands on deck. In his book Originals,

Adam Grant suggests that it is better to cherish differences and look at things from different perspectives that to ask new employees to conform and behave just like everyone else,” said Fathi.

What can really hinder a highperformance work environment, according to Colak, is the natural tendency to micromanage–a trap that many start-ups fall into. If the owner of the start-up comes from a corporate background, they need to learn to let go micromanagement which they may have experienced in their previous roles, and give authority to their employees. It is them, of course, that hired the talent in the first place.

GETTING THEIR OWN BACK Social Justice Theory or Equity Theory is a very long-standing area of organisational psychology which states if a component of the workforce feels unfairly treated, they tend to respond in kind by trying to balance out that equation by treating the company unfairly in their own way.

It is easy to see Social Justice Theory alive and in action within customer service departments. The results are easy to measure, said James, because these days–especially when it comes to client servicing–organisations are often expected to be available around the clock. Adding an increasingly educated and picky digital-savvy cont. overleaf

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EMPLOYEE ENGAGEMENT cont. from pg. 27

audience is putting more pressure on companies to match exceedingly high-maintenance expectations with experiences.

“If you and your business’s employees can handle the pace, you’re going to have an office full of happy people high fiving each other and telling inspiring tales around the water cooler.

This is the ideal sort of environment for engaged employees to thrive in.

It will be a very different story if your company’s employees cannot keep up with these demands. Everyone might be left feeling exhausted, demotivated and frustrated,” she said.

Google re:Work has published all Google’s HR policy documents as well

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as keeping an updated blog featuring a piece where researchers looked at how somebody reactswhen they feel unfairly treated. When discussing counter-productive work behaviours, it was the group of highest performers who are more likely to react negatively if they feel slighted by their boss or feel that they have been treated unfairly, by ‘righting the wrong’.

“The staff who feels they have been treated unfairly tend to respond in kind by trying to balance out that equation by treating the company unfairly in their own way, like stealing stationery, which gets expensive. Employers will also find that these employees really use their sick days, which is why policies

do not control absence. If people do not want to come to work, they’re just not going to come. A policy isn’t going to discourage them,” said Garrard.

Beyond trying to scores points of their employer, disengaged employees could have a direct correlation in the decline of the business once they interact with clients and customers, added Colak. A lack of employee engagement only serves to negatively affect drive and motivation. Within a small business, this can be dangerously contagious and detrimental to the bottom line. Disengaged employees feel they are unimportant to the success of the business or unrecognised for their efforts. Either way the results are the

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Disengaged employees will have a negative impact on client relationships as well as the bottom line of a business.

same: an organisation doomed to failure.

James illustrated with an example of a customer, whose car has broken down and she has called a company for help, a scenario which could play out in one of two ways.

In the case where a call centre agents arranges a tow truck and rental car in under an hour, factors such as how long it took for that call centre agent to answer the phone, or communicate clearly, become irrelevant. The client wanted immediate help from the company and she got it.

“It’s likely that the call centre agent was actively engaged on the call. Not only that, but the organisation probably functioned well as a unit, with

the right procedures and functions in place to get things done quickly and efficiently in an environment where the difference between an angry customer and a happy one is just an imaginary thin line,” she said.

On the other side of that imaginary thin line, the call centre agent could have been disengaged and apathetic on that call, or working in a stressful and disorganised environment surrounded by toxic people not motivated enough to craft solutions quickly, without the autonomy to make the decisions necessary for a quick resolution.

Feeling overwhelmed, the call centre agent could have passed the buck by transferring the call to a second call centre agent in the same head space and physical place, who did the same. If none of the call centre agents addressed the client’s needs, she would be left sitting alone in her broken car on the side of the highway. The result would be a stressed, angry, and dissatisfied customer two minutes away from disconnecting, calling a competitor, and leaving the first business forever, equating to a direct loss of revenue.

“If an employee is not engaged, they naturally start to feel their role is insignificant and that ‘it’s just a job’, doing the bare minimum, until it is the right time to jump ship and look for the next best opportunity. It also impacts the desire to proactively and effectively deliver promptly, feeling that they and what they do do not matter to the company,” said Fathi.

It is a terrifying thought to think of a disengaged pilot, taxi driver or bank teller, he added. The impact for those examples is simple to imagine and could be easily quantified. Yet, every organisation, regardless of its industry will be affected if employees are not engaged. From productivity, to commitment, quality of output or even being more client-focused, less engagement means being more careless towards peers, strategy, values and the company as a whole.

HOW TO BETTER ENGAGE EMPLOYEES • Start a dialogue about employee engagement, introduce it into the common language used in the office and ensure all employees know what it means to be engaged.

• Start measuring employee engagement– establish the engagement metrics most important to the organisation to keep track.

• Start a daily huddle to bring the whole company together for 10 mins per day, just to touch base, communicate, share and learn.

• Celebrate success and failures. Shout out and recognise when someone has excelled, and treat failures as learning experiences, and take away the fear of admitting mistakes.

• Understand employees’ specific needs, aspirations how they feel about the company and what they would like to see or change and act on it. Employees typically spend most of their days away from their families and friends, and with work colleagues. It is essential to build the same cohesion as they would typically have for relationships outside work.

• For an SME, having the flexibility to operate within set guidelines enable employees to take ownership and deliver efficiently, without the unnecessary pressure that some managers may force on them. They also feel the freedom to innovate and devise new ways of improving their work.

• Be clear and transparent about expectations and what the employee is required to do. Taking a more trial-and-error approach is recommended until a synergy is established, to better define the best employee-company relationship.

• Be completely transparent with targets and the progress of the business as a whole, and take everyone’s input to heart.

• As incentive–and if possible–allow them to benefit with the company’s growth by giving them shares/equity.

Source: Rachel James, Head of Marketing, Biz Group; Khaled Fathi, Managing Director, Inspativity ;Ibrahim Colak. Co-Founder , of online market place mrUsta

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BUSINESS LICENCES

OPEN

FOR BUSINESS The UAE offers many entrepreneurs the opportunity to embark on their business endeavours, but selecting the right licence and heeding good advice is critical

T

he UAE has been listed as one of the world’s most improved economies for doing business in the World Bank’s Ease of Doing Business rankings for 2017. It was ranked as the 26th-easiest country in the world for doing business, up eight places from 34th last year, and positioning itself in the top 30 for the first time. In the UAE, SMEs account for more than 94 per cent of the operating companies, amounting to around 350,000.

The first task for a new business owner is to identify the business activity of their project as well as the best jurisdiction for their new business: ‘mainland’ or one of the 30-plus economic free zones spread across the UAE, said Hani Naja, Senior Associate in the Corporate Practice Group at legal firm Baker McKenzie Habib Al Mulla. “Each licencing option presents its pros and cons and this decision should be made very carefully. We often see young entrepreneurs fall into the trap of

setting up a business that does not help them achieve the geographical reach they want.”

Determining the growth plan of the business, as much as possible, is essential, agreed Amanda Perry, Managing Director at business set-up consultancy, Vital Corporate Solutions.

It is essential to invest in a licence that can support business scalability.

Alternatively, a business owner can choose a licence that is affordable in the present and, whilst not scalable for the long term, supports the company’s cash flow needs for the shorter term to enable the company to grow, and then invest in a licence that is compatible to a larger longterm business.

“Other considerations are the demographics of your business and your clients. Free zone licences are affordable and flexible and a perfect fit for many businesses but, for example, if you want to directly trade in Dubai, you will need a Mainland Economic Department licence. It’s important to

understand your rights and obligations to the business you are about to incorporate so make sure you get good advice. Get a second opinion if necessary and engage the services of a professional to make sure it’s done it right,” said Perry.

Once the jurisdiction has been determined, a number of secondary considerations a new business has to make when weighing up which is the correct licence for their company, specifically that it covers their business activity sufficiently.

They should also select a licence that will enable them to obtain the appropriate number of visas for their business, according to Steve Mayne, Managing Director at business set-up consultancy CREATIVE ZONE. Business owners should also determine whether or not they require physical office space, and also who their customer base is likely to be, as these can determine which licence will be most suitable. cont. on page 32

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BUSINESS LICENCES

cont. from pg. 30

Once the licence is selected, a number of other criteria need to be taken into account, the most important being to comply with foreign investment restrictions in the UAE. The UAE Commercial Companies Law mandates that corporate entities must be at least 51 per cent owned by a UAE National or by an entity that is wholly owned by UAE Nationals. In addition, certain commercial activities can be carried out exclusively by UAE nationals or entities wholly owned

by UAE Nationals.

“The UAE (mainland) has been ahead of the curve and removed the requirement of a minimum capital for the most common type of corporate vehicle: the Limited Liability Company or LLC. This has reduced the pressure

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on small and medium investors who can now inject a capital that is ‘sufficient for the realisation of the objectives of the company’. The majority of free zones still require a minimum capital but we believe this requirement will be appeased soon,” said Naja.

Depending on whether a business owner elects to set up on the mainland or in a free zone, different documentation may be required, but Naja said that in in general they should be prepared to submit personal and corporate documentation, as the case may be, for the shareholders of the new business, an application form to set up the company, list of activities, and a lease agreement, among others.

Perry added that while the specific requirements vary between licencing

authorities in the mainland and in the free zones but typically a business owner will be required to supply their passport, proof of address, relevant qualification certificates if required by the industry, in the case of legal, financial, consultancy, or education activities, as well as a business plan or summary of activity. Where the activity is regulated by a third party, further detailed information and evidence of the business may be required.

Some activities in certain free zones and mainland require a deposited amount of share capital and in specific instances this capital maybe diverted after licencing, and for some companies, this must be ringfenced. The Dubai Multi Commodities Centre Authority (DMCC) Free Zone

requires AED 50,000 paid up share capital to be submitted by all relevant shareholders; some finance-related mainland licences will require paid up share capital.

FREE ZONES There are a number of benefits to operating within a free zone, most notably that they offer 100 per cent foreign ownership, which has gone a long way to provide a suitable business landscape to foster foreign investment. Further advantages include certain tax exemptions which may vary somewhat free zone to free zone; full capital repatriation.

The most important feature each free zone offers is a specialised infrastructure which is adequate to the type of business: Internet City for dotcoms, Media City for media and advertising, MASDAR City for innovation, JAFZA for industrial and logistics, and DIFC/ADGM for financial services.

“Strictly speaking, a company operating out of a free zone is limited to do business within the free zone itself or outside of the UAE. A free zone company, with some exceptions, is not allowed to conduct business in the mainland without setting up a presence in one of the Emirates,” said Naja.

Mayne added that licence holders operating from a free zone should be aware that they should not transact with companies or customers that are based outside of a free zone. “Free zone companies are free to transact with other free zone companies in the UAE, and any company or customer based outside of the UAE. If they wish to operate within the local market, they will need to establish a local branch, or transact through a local distributor.”

Penalties for operating outside the scope of the business licence can

be severe, including fines of varying denominations, depending on the violation, as well suspension of the licence until the issue is rectified.

In the beginning of September this year, the Dubai Financial Services Authority (DFSA) warned residents in the UAE about fake Dubai International Financial Centre (DIFC) commercial licences being sold by a business management company based in the UAE, making it paramount that business owners looking to set up in the country vet their service providers properly.

There are a number of steps a business owner can take to do this, including: requesting to see the service provider's trade licence and making sure they are licenced to provide the required service; visiting the service provider at their offices, because dishonest service providers generally do not have a proper office structure; asking the service provider for proof of previous experience and references; attending the authorities with the service provider (at least initially) to ensure the job is being done; paying government fees directly, and not through the service provider, and paying the service provider's fees in instalments, with the bulk after the licence is issued, said Naja.

“This is not the first time this [sale of fake licences] has happened and it’s worrying. My suggestion is to ‘stalk’ the service provider online, check their social media accounts and their history on social media, not just their recent posts. Google the company and Google the management of the company individually,” said Perry.

She added that in these cases, business owners need to trust their instincts because they should work with a provider that has several years under their belt, because fake licences only really get discovered one year later at renewal time.

PITFALLS SME OWNERS NEED TO CONSIDER WHEN EMBARKING ON THE LICENCING PROCESS • Not having a clear initial investment cost plan Many SME owners embark on a new business without having a clear understanding of the associated costs, which include licencing costs, fees for lawyers and service providers, and office rent.

• Not documenting the legal relationship with their business partners Many SMEs start among friends and family and documenting the business aspect of a relationship is critical so that each investor is fully aware of their rights and obligations towards the business, third parties and each other.

• Not ensuring the bank understands and supports your business If they do not, your business banking and therefore your business will be interrupted if the bank needs to suspend your account whilst they gather information and due diligence.

• Not understanding how the licence works Many young businesses fail because owners did not understand their legal obligations such as the expense of an audit or thirdparty approval.

• Not ensuring that they have the correct licence Seeking advice from an experienced consultancy firm is a good idea, to determine exactly what licence should be applied for.

• Not ensuring that their business activity is correct It is not uncommon for a business owner to select an activity for their licence which might not actually be suitable for the work that they are doing.

• Not allocating time to complete the process Many people do not anticipate how long certain tasks can take, and how much time can be lost standing in queues. Appointing a PRO to handle this can save a lot of time, enabling the business owner to focus on their business.

Source: Hani Naja, Senior Associate in the Corporate Practice Group, Baker McKenzie Habib Al Mulla; Amanda Perry, Managing Director, Vital Corporate Solutions; Steve Mayne, Managing Director, CREATIVE ZONE

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CASE STUDY

A SINCERE FORM

OF FLATTERY? When Stevi Lowmass discovered her product was being copied and sold, she took a number of steps to address the situation

S

tevi Lowmass, the CEO and Founder of Dubai-based manufacturer The Camel Soap Factory is dealing with trademark violation for the third time in almost three years.

“I was recently sitting with my trademark lawyer and he did a random worldwide search on the company. Somebody who came over to our factory from Brazil and signed a distribution contract with us, has registered our trademark in Brazil under her name, which means one thing. She is looking to produce locally, and sell counterfeits there. We were introduced to her through Dubai Exports, and the representatives are horrified. There was no way for them to predict that, and it is not something they could have prevented,” said Lowmass.

The first intellectual property violation Lowmass encountered occurred almost over two years ago.

A chance WhatsApp message from a friend revealed that her soaps had

34

not only been counterfeited, but were being sold in Dubai.

“A friend sent me a photo and a message saying ‘Look what I found in the Madinat!’ and I thought it was great. But I noticed something about the texture of the jute bag. I zoomed the photo as much as I could and the bag just did not look like the bags I use; the weave was too wide,” said Lowmass.

She went to the Madinat, saw the soaps and her heart sank. She bought one and realised it was from a company she had previously supplied.

On revisiting the company records, she saw that their orders had stopped around two months previously. The counterfeit products were also labelled ‘Made in Thailand’.

At that time Lowmass knew somebody who was setting up a law firm, specialising in intellectual property, and they needed a win.

Even though the legal costs were quite considerable, the firm assisted

Lowmass at a discounted rate. To get a conviction on any issue regarding trademark infringement is expensive and almost impossible for a small company to settle the issue in court.

“He and I went down to the Department of Economic Development (DED) and as luck would have it, a new gentleman had started on the job that day so he was quite eager to assist us. We showed him the two products and told him where they were manufactured. At the time, my bags said ‘Made in the UAE’ and that has subsequently changed to ‘Made in the Middle East’ for a number of reasons.

This gentleman from the DED said they would conduct a raid the next day, and they did. The seller received a fine,” said Lowmass.

The second time she discovered counterfeit products was handled a bit differently. Lowmass visited the shops and explained the problem to the owners. They were a little bit shocked and said they do not know the

I do not mind competitors as long as they are being tested the same way I am and paying the same fees I am, and getting the same approvals so we are on a level playing field.

– Stevi Lowmass, CEO and Founder, The Camel Soap Factory

difference between the real and the counterfeit soaps and they had never seen a Camel Milk Soap salesman.

Lowmass sent a salesman to the stores and provided certificates of authenticity and her sales increased to the point where the fake products were more or less squeezed out of the market. She added that the shop owners have been very obliging; some of them genuinely did not know they were selling counterfeits. “We’re still working with them and I hope this continues to work. I’ve even been asked what they should look for. The products all have expiry dates, production dates, batch numbers, the full name and address of the manufacturer and if they cannot find that, they are likely buying a product that is not certified.

They do not know what it will do to their skin.”

Although Lowmass has never had to address intellectual property infringement in the courts, she was advised early in the development of

the company to register a worldwide copyright, because registering the trademark in each country would have been unrealistic. Her lawyer will write a cease and desist notification to the distributer in Brazil. Lowmass said it was strange that trademark lawyers in Brazil did not check against the copyright registers in the first place.

In 2016 Gulf countries increased intellectual property fees by an estimated 6,200 per cent, making the fees for patent, trademark, design and copyright some of the most expensive in the world. The fee in the UAE went up to $2,725–a 99.9 per cent increase, according to the announcement in the official gazette in March last year.

Trademark legislation is used around the world to protect businesses from copycat traders who may seek to steal ideas and images. With such prohibitive costs, it’s an important expense smaller businesses may not be able to afford, and may even forget about until their business gains traction.

If another party registers the trademark, the original business owner will have no recourse. Lowmass said if there was one way the Government could help SMEs, it would be to reconsider the price of copyright registration.

To be copied, on one hand, is quite flattering, Lowmass said. The people who are creating these counterfeit soaps are copying the logo and the stamp, so clearly there is value in the brand–it is not just a case of people selling camel milk soaps. “I do not mind competitors as long as they are being tested the same way I am and paying the same fees I am, and getting the same approvals so we are on a level playing field.”

RULES, REQUIREMENTS, RED TAPE Manufacturing is a heavily regulated industry and Lowmass went through a number steps to get her ISO certification. She submitted soaps to Dubai Municipality for approval and they cont. overleaf

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35

CASE STUDY Stevi Lowmass was able to show the Department of Economic Development the difference between her product and the counterfeit. cont. from pg. 35

requested her Good Manufacturing Practice (GMP) certificate because they would not approve the product without it, and it cannot be issued without an ISO certificate.

The Camel Soap Factory was certified through SGS, a global inspection, verification, testing and, certification company; it took about three months and had a number of implications. First, changes had to made to the premises– walls, doors and sheeting had to be put in, and a long list of smaller changes had to be made as well, costing the company around AED 80,000. Lowmass is grateful for going through it though, because it made her start to focus on the manufacturing process.

36

Making soaps with camel milk was no longer a successful hobby–it was a business.

“Having the ISO has made a difference to how we operate; everybody is now focused on quality in way that they were not before.

It’s changed how we process and do things; it makes me write things down. Every stage of our process is documented and I think there is real value in that,” she said.

However, Lowmass suggested that certain processes between the DED and the Minstry of Economy (MOE) could be more streamlined. Federal legislation seems to be aimed at big manufacturers and it’s possible that it

was formulated under the assumption that foreign manufacturers would come in and set up on quite a large scale. “I do not think the Government considered that local businesses would try and set up manufacturing bases. As a smaller business I find some of the requirements to be a bit cumbersome.

A lot of the regulations are in Arabic and it’s impossible to get everything translated,” she said.

One example of the difficulties faced was trying to reclaim input taxes. By the time all the necessary registration and administration fees have been paid, the company would be down a large part of its revenue.

One way to support smaller

manufacturing companies is to make it easier to pay back the duties.

FROM MAN TO MACHINE The Camel Soap Factory is selling close to 250,000 soaps per year, an impressive amount considering they are still made by hand. Lowmass said the team constantly looks at how they can do things better and faster. “When you do things by hand you have to make sure you do them as efficiently as possible. I have a really good team–they’re smart; they’re all thinkers. They all look at what they’re doing and ask how they can do their task a little better.”

She has revisited her business strategy and what is apparent is that The Camel Soap Factory cannot continue to grow as it is forever. It also isn’t a case of growing the business simply by acquiring larger premises because that is resource intensive. The Camel Soap Factory has thrived in the gift sector, but Lowmass is looking to create a more commercial soap. It will still be a natural product, but will likely be pressed and packaged by machine.

Parts of the manufacturing process either have to be automated or new products have to be developed to achieve the rather aggressive targets Lowmass has set for the next five years.

Lowmass has looked into utilising contract manufacturing–and there are sufficient contract manufacturers in Dubai–that can allow the company to extend its product range without having to invest in big equipment. The alternative is investing in equipment and changing her premises.

Regardless of which route she chooses, Lowmass has said that in 2018 she will look for funding. She realises that it could be challenging because manufacturing is not an investor’s first choice of sector, with a lot of enthusiasm being shown for tech companies.

“I understand the excitement about tech companies; I like technology, but

there are certain basic needs that just cannot be met by technology.

I think the Government could be doing so much more to encourage smaller manufacturers because manufacturing is what really generates massive revenues for countries in the long run.

If you lose your manufacturing base, you do not have a lot. The countries with really strong current accounts are all manufacturing countries, such as Germany, China, and Japan. I think another reason for the lack of interest is that people chase big profits; and manufacturing is really about having steady incline. It is highly profitable if it is done properly,” said Lowmass.

Looking forward into 2018 with the implementation of VAT, Lowmass is aware of the implications it will have on her working capital. Although her accounting software supports the VAT changes, there are a couple of issues pertaining to imports that her accountant is confident can be dealt with manually.

The real knock-on effect is going to be on product pricing. As a manufacturing business the company operates on tight, tight margins, and cannot absorb five per cent. Lowmass said she will have to raise the product prices. Her concern is that January to March are her busy months, and the consumer will look at the price and say, “That is AED 3 too much!” She does think the shock will be short-lived, once consumers adjust to paying VAT. As part of her long-term strategy, she would like to sell The Camel Soap Factory to an Emirati in about five years’ time.

Having created the company to supply a specifically Middle Eastern product, she doesn’t want to see it taken over by a foreign entity. It’s a home-grown company that belongs here.

At this years’ FinanceME’s Business Vision Awards, The Camel Soap Factory was the winner of the Top Manufacturer category.

THE PROBLEM

• Stevi Lowmass discovered that her camel milk soaps had been counterfeited and were being sold.

Her logo and jute bag had been copied and store owners did not know the different between the real and fake products.

• A Brazilian distributer has registered the trademark in Brazil, which means she wants to produce and sell locally manufactured counterfeits.

THE SOLUTION

• Lowmass registered the worldwide copyright to the company in the early stages of the business set-up, so had legal recourse to copyright violations.

• She is rebranding and tweaking the logo to make it harder to copy.

The jute bag will have a new pattern that will be unique to company, so not only will consumers recognise immediately that it is a genuine camel soap product, the bag will be a lot more difficult to copy.

• Lowmass works with sellers to provide certificates of authenticity so they do not inadvertently stock counterfeit products.

THE RESULT

• The Brazilian distributer will be sent a cease and desist notification, and the rebranding will make the trademark she registered in Brazil useless.

• Working with sellers to ensure they stock real products has squeezed counterfeit products out of the market.

Source: Stevi Lowmass, CEO and Founder of The Camel Soap Factory

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FACETIME

SMALL BUSINESS,

BIG DATA Simon Kirby at Qlik looks at how analysing data can help SME owners avoid pitfalls and grow their business

W

hile SMEs make up the majority of Middle East enterprises, they tend to fall behind in digital technology adoption. Among these SMEs a mere 18 per cent in the UAE and 15 per cent in the Kingdom of Saudi Arabia are digital, according to a recent report by Digital McKinsey. There is huge potential for Big Data analytics to enable digital transformation, with the Middle East business intelligence market set to more than double to an estimated $12 billion by 2020, according to a recent report by MicroMarket Monitor.

Big Data as a term was coined around the idea that not only do companies have lots of data inside their organisation, but now there is lots of data outside organisations thanks to likes of social media and public data sets, said Simon Kirby, Director, SI Industry Solutions– Financial Services at business intelligence and visualisation software provider Qlik. Governments are making more and more data

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readily available, and when combined with internal data, some astonishing analyses can be done. The question is, “How?” “Often the problem facing companies is that internal data is numeric and structured while social data is not, and combining it all remains a challenge. Hadoop, the free technology that underpins big data, is a way of holding a lot of structured and unstructured data. Once all this data is stored in one place, it gets complicated because unless a user knows how to implement Hadoop, they will have to go through a specialist, such as IBM or Hortonworks–good technology, but costly,” said Kirby.

Many small business owners may feel that they do not generate enough data to warrant investing in analysis tools, and will generally stick to using Excel spreadsheets because everyone knows how to use it and it is readily available.

“The problem with Excel is that it is tricky to join more than one

data set together and to analyse the data. If you want to analyse more than a million records it becomes very challenging because Excel can accommodate about 1.1 million records. If you want to analyse more than that you need to look at alternatives,” said Kirby.

With the right tool any amount of data can be input and visualised, and the user can see how good the data is. Kirby said the biggest problem with data is the quality. There are many ways of entering addresses and different date formats, depending on the region, and that data needs to be brought together. Analysing it will provide some really useful insights, really quickly. All the questions a user wants to ask of the data are suddenly answered very easily, particularly when one question will often lead to another.

“This ability to ask questions is useful for SMEs to weigh up the impact of external effects. SMEs can be wiped out by external events, such as a seismic market shift that they did not see coming, weather conditions,

or even 2015’s drop in the oil price.

Most small business are so focused on growing and driving profitability, they very rarely stop and look at the big picture and ask what if something were to happen and what it would do to their business. With the right data, it’s very easy to do that kind of analysis,” said Kirby.

Qlik recently implemented geomapping technology into their product, and was used by a small cycle shop in the US. The owners had five stores in a particular location and they wanted to open their sixth; they did not know where to put it. They analysed the population of the region, then overlaid the population with the road structures of the area, then added the average drive times from where people lived to potential places to put the store. They wanted the new store to be within a 15-minute drive for the largest number of people without being too close to existing stores, and without being too far away for the management to run it.

“By analysing the available data they were able to pinpoint exactly

the right location for their new store and when they opened it, they hit the right target and their sales numbers started off strong straight away. They also discovered that one of their stores was in completely the wrong place, so they shut it down and moved it somewhere else,” said Kirby.

Analysing even a modest amount of data can influence the way that a business owner shapes their decisions.

It allows them to take stock of the business and see if they are making money, where you’re making money, and what can help them make more.

The ability to analyse data allows an owner to ask questions of their business. They can develop a goal, choose a direction, develop a strategy, and use realistic check points to measure where they are in terms of their business goals.

“We know of an SME in this region that spent $100,000 on software, which is a considerable amount for an SME. Their return on investment was millions because they we able to analyse data that hadn’t been

able to before. They were able to make decisions incredibly quickly.

They could reduce cost and increase revenue because they began to look at factors influencing revenue drivers, and doing more of those and less of other things and that is when the income began to grow,” said Kirby.

Kirby said an SME owner can spend less than $5,000 and be up and running really quickly. Sometimes asking the right questions and asking people for a bit of help can have a huge return on investment.

“The technology to properly analyse data is readily available and can often be downloaded for free and even used in the cloud. It is only as a business starts to grow and a business owner needs to start sharing their data with other parties that they should consider buying the software,” said Kirby. He added that if a small business owner wants the support, maintenance, and expertise of the software, it is worth paying for it. They can also bypass a number of expensive problems in the long run.

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SHUTTERSTOCK.COM/JUERGEN FAELCHLE

Analysing available data can help business owners anticipate threats and change the course of the business quickly.

Firas Hurieh, CEO, AlJeel Capital says bringing the Shakey’s brand to the UAE will serve the previously side-lined Filipino community

W

ith around 850,000 Filipino nationals living in the UAE, and around 500,000 in Dubai alone, their community is one of the most underserved in terms of brand availability, according to Firas Hurieh, CEO, AlJeel Capital.

The company has recently acquired the UAE franchise for fast food brand Shakey’s, following a joint venture deal with Shakey’s Pizza Asia Ventures.

The project began in March 2017, following a number of trips to the Philippines, which has over 200 branches of Shakey’s, and continues to grow in popularity. Hurieh realised it was a brand to which the community was emotionally attached and he pursued the rights to bring to Dubai quite aggressively. The brand is set to launch in December 2017.

“We want [the stores] to be accessible to the community. All our locations will be next to public transport–either the metro or bus stations. Although it will resonate with the Filipino community, the convenient locations will draw other nationalities as well,” said Hurieh.

Hurieh elected to have the 372-square metre flagship store in

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a free standing building rather than a mall to avoid being constrained by mall operating hours. He added that the consumer behaviour of the Filipino community was taken into account when selecting a venue that could seat 180.

“It’s a place where friends and family can come together. Members of the Filipino community tend to live in close proximity and will often dine together in larger groups, whereas other expats will dine in twos, or threes, or fours. We want the venue to be a place where everyone can come together,” said Hurieh.

The company will also focus on its delivery during the day to reach the surrounding offices, because not everybody has an hour lunch break, or they need a quick bite. “We have a strong, large fleet in place to ensure that deliveries are made. We’re going to have a fully-fledged infrastructure which will include an application to make placing orders as easy and convenient as possible,” he said.

Finding the site was quite some work requiring due diligence–the team considered their target community and made sure the area had sufficient

day and night traffic. Their chosen location, in Burj Aman, is in a busy area, with a number of commercial offices, is close to a mall and accessible by public transport, and offers sufficient parking. Following a full pitch to the developer, the project was ready to move ahead.

The brand has its own DNA in terms of the wood used, the style of the chairs, and its overall look and feel of the interior. The layout and measurements of the store were given to the designers, who went to the Philippines to design the kitchen fit out. The building materials and the food inventory have been secured in terms of local suppliers that have the same products. The chairs for the restaurant will also be manufactured in Dubai.

Hurieh said it is essential to keep the menu consistent because consumers know the product and deviating from it would be disappointing.

This is such a priority that certain products are being brought in from the central kitchen in the Philippines to Dubai, which includes the sauces, the spices and the seasoning. Mojo’s Chicken, fried chicken and potatoes,

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FRANCHISE

MOJO MAGIC

If you do not have happy, well-trained staff, customers will identify that very quickly and they know it before they even try the food because their first impression is emotional.

– Firas Hurieh, CEO, AlJeel Capital

is a popular dish on the menu and the secret ingredient is the breading. The breading is sent from the Philippines directly to the chicken supplier in Dubai, who in turn will deliver everything to the restaurant.

Operating in the F&B sector for a number of years has meant that AlJaleel Capital has a solid operations team that has been able to handle the product in terms of supply chain and fit out and design. The team knows what each supplier is capable of delivering, and the same goes for selecting contractors.

“The contractor has to deliver on time and ensure there are no delays, and that each stage of the timeline is executed. That is important because we have to ensure that each stage follows the regulations set out by the Dubai Municipality, while matching the look and feel of the brand standards,” said Hurieh.

PEOPLE ARE KEY Hurieh said that regardless of what type of business someone is running, happy staff will ensure that the business succeeds. Loyalty is created by paying staff the right wages, supporting them, and making them feel like they are part of the organisation, and not merely a tool.

While management can be hired locally, the decision has been made to bring the leaders of each section of the business–from the person in

charge of the pizza dough, to the store manager–from the Philippines.

“They already know the Shakey’s business and can bring that essence to the stores in Dubai. I really noticed it when I was in the Philippines.

From entry to senior levels of management, the staff knows the brand and the business model inside out. Eating out is all about service. When you see the staff greeting customers in a friendly way, customers feel good.

If they leave feeling good they will return. If you do not have happy, welltrained staff, customers will identify that very quickly and they know it before they even try the food because their first impression is emotional,” he said.

The numbers at AlJeel’s other restaurant concept attest to this approach. With over 500,000 customers served across the branches, feedback indicates repeat customers make up 65 per cent, and that level of customer loyalty is the goal for the Shakey’s franchise as well.

Under the UAE franchise agreement the goal is to open 10 Shakey’s outlets over the next six or seven years, with the second and third locations already identified. There is a view to expand to Abu Dhabi soon. By investing in the staff as each branch opens and the company expands, Hurieh hopes to see the staff grow with the company.

WWW.FINANCEMIDDLEEAST.NET

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START-UP

FOR THE LOVE OF ART

Lurdh Allam, Co-Founder and Director of Art Smiley is helping artists cease the struggle for survival

Aruna and Lurdh Allam are making purchasing art as easy as possible.

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rt Smiley, a platform for up-andcoming artists to showcase their work, was an idea sparked by a family gathering. About a year ago, art lovers Lurdh Allam and his wife Aruna attended his niece’s graduation from art college. The majority of the graduates stated they had no desire to pursue a career in art, owing to the lack of support available to artists and that they may not be able to survive doing it full time.

As an art enthusiast, Allam said he can only purchase art if he attends an exhibition, and the prices are prohibitive if he wants to buy art regularly. Art collection is a niche hobby that only people within a certain income bracket can actively pursue. Everybody wants to decorate their homes, but they cannot always afford art.

“I realised there were two problems I could solve. I can encourage an unknown artist who wants a platform to showcase their talent to the world, while at the same time I can assist the average art

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lover who cannot always access art immediately,” said Allam.

Aruna, a web designer, made the suggestion that they develop an e-commerce platform for art.

The immense support from the art community that followed their survey convinced them they had a good idea.

The business was registered at DTEC in December 2016 and the website went live in May this year.

Art Smiley currently features around 200 artists, and will accept artists who are unknown and who produce original, contemporary works. At the moment the platform features some sculptures as well as some pieces of Islamic art.

The company works with a curator who will assess the quality of each piece as well as the price point.

“Sometimes artists may price their work a little bit too high or too low for the market and we will advise them accordingly, but at the end of the day, the artist has the final say on the price. We add the mark-up to cover our administration and transport costs

so the artist has a hassle-free service.

Artists can join the website for free and do not pay any fees,” said Allam.

Buying art off the platform has been made easy as well. Once potential buyers have registered their profile with their details and shipping information, they can select and pay for their piece through the website’s payment gateway.

If the buyer is based in Dubai, Art Smiley offers a framing service. If the buyer is based anywhere else in the UAE, they can buy a painting on a stretched canvass.

Beyond the UAE, paintings are shipped rolled up, otherwise the shipping costs would be prohibitive.

The website is fully integrated with Aramex, which ships globally. In the event that the buyer wishes to purchase a sculpture, the Art Smiley team will contact them directly to discuss the bespoke packaging requirements and the costs associated with it.

EXPANSION

Allam has an agreement with the Hilton Hotel in Business Bay where a space has been allocated to display some of the artworks on a consignment arrangement for hotel guests. It is working well and DTEC has expressed an interest in doing something similar. He has recently had an enquiry for 1,500 pieces, each measuring two by 2.5 metres.

He has also started to approach investors because the business aim is make art accessible to every community, and when people think of decorating their home or office, he wants them to think of Art Smiley first. He added that there is a Bahraini investor who has shown interest, and he hopes to be able to exhibit new artists in cities outside of the UAE very soon.

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real estate investment made safe and simple A REIT, or Real Estate Investment Trust, is a company that owns real-estate properties and generates incomes from these properties. It allows anyone to invest in real estate in a safe and simple way: through the purchase of shares.

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TECH FOCUS

IT’S ALL ‘APPENING! Yasmine Rasool, Co- founder of Arabic emoji app HALLA WALLA gives sound advice to anyone wanting to develop their own

M

ost great ideas sprout from frustration, or a dissatisfaction with what is available or has been done in the past. The best app ideas are those in which a solution to a problem is developed.

Skype, for instance, created a solution for communicating long distance, while Facebook helped millions reconnect and share photos, stories, and videos.

Before developing an app, ask if it solves a problem. Who is it targeting? Will it be of use to a wide variety of people? These are important questions that should be considered in the development stage of the product. Everyone can have a good idea–it is how it is executed and how it is marketed that is important.

Launching a successful app that grabs its audience’s attention is not easy and most entrepreneurs launch several apps before finding their lucky break.

As of March 2017, there are close to a million apps each on iOS and Android app stores according to market research portal, Statista.

Being successful in a digital world requires innovation, engagement and perfecting a product while frequently

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adding extra building blocks. It is vital that the product has the potential to grow with new additions and add-ons.

In August 2016, Instagram launched Instagram Stories as a free add-on that allows users to upload temporary videos and photos, which disappear from users’ feeds after 24 hours. In the first five months of the add on, Instagram hit 150 million users, quickly surpassing Snapchat’s daily usage and eventually contributing to slowing down the company’s growth by 82 per cent. By frequently creating new features a product can be kept relevant in the market.

While developing an idea, user profiles need to be compiled which describe the type of user the app will target, as well as the user’s perspective on how to use the app. By having an understanding of what the app will be set out to do, the owner can then sketch screen mock-ups to allow their idea to come alive, and help them further visualise their concept.

The tech world can be cutthroat, so it is important to get the idea right from the start, and that the intended audience is understood through

market research. Without research, there is no product.

Conducting frequent focus groups is vital to determine how best to approach building the app. As a start-up, getting a focus group together can be as simple as gathering family and friends, utilising social media platforms as a tool to find people who want to participate, or organising a brainstorming session with fellow start-up companies at shared working spaces in the city. The description of the target group must be as clear as possible to ensure the right people are approached.

Once the focus group is established, conduct research through questionnaires, round table meetings, brainstorming sessions and any other suitable form of research. Be thorough with market research and ensure nothing is left to chance. Multiple focus groups provide more data to explore.

APP DEVELOPMENT Finding the ideal developer and designer is vital and can be the hardest challenge. Too often tech companies will try to condescend or cheat an entrepreneur if they sense that they

are inexperienced in the field, and it can take time to find the right team.

The right team will have an interest in educating the business owner and furthering the concept, will believe in the brand, and will invest passion and energy into it.

Do not just look locally; sometimes the best team can be in the least expected places, and can involve a number of things: connections, word of mouth, reading tech blogs, magazines and online forums, and a dash of luck.

Once the right developer is found, hold on to them for dear life because they are the key to the brand’s development.

The priority is to get the minimum viable product (MVP) in the hands of the customer–fast! Once a real demand for the brand has been established and the business owner continues to see traction, development and maintenance can be taken over in-house.

A developer account can be created with Apple and Google by registering through their website and paying the annual app store fees of $99 for Apple and $25 for Google. The actual process of uploading to the app stores is often done by the app’s developers.

There is a one-in-a-million chance that the app could be the next Facebook or Twitter. If the goal is to build a business, a clear monetisation strategy is needed. Creating a free app can have its advantages–users are more likely to download a free app than a paid one, and it can monetised later down the line with in-app purchases.

One such example is Clash of Clans, one of the app store’s more successful free games. Users need to buy addons in order to grow their army and get up in the ranks of the online league.

The game’s developer, Supercell, reported revenue of $892 million in 2013, showing the effectiveness of this method.

Releasing an app for free will not result in making an income immediately but it will set up the app in the long run by building a database of loyal early adopters who will support the brand from the start if the product hooks them in. Alternatively, if the brand is one people already recognise, they will be more willing to spend the cash to purchase a new product. Sticker packs for iMessage, for example, are often made by brands like MTV and Cartoon

Network with a price tag, as they know their audience will spend the money.

Asking what it costs to develop an app is a lot like asking what it costs to buy a house or a car. The answer depends on many factors.

Development costs can range from between $10,000 to $100,000 or more, depending on the complexity and overall features involved.

What matters is how ambitious and passionate the business owner is to bring the project to life. Often, investments in early stages can lead to products not living out to their full potential as the main focus can be lost when multiple party opinions come into the picture and this should be avoided. Once the product is exactly as the owner would like it to be, then they should look into investment to seek growth.

Building a successful app is extremely hard work but if the right choices are made, and the entrepreneur can stick with the right people and pay close attention to research and detail, and has a lot of persistence, they will have a good chance at success.

WWW.FINANCEMIDDLEEAST.NET

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The key to developing a successful app is having a solid idea and the right team.

PRODUCT FOCUS

WORKING WOMEN National Bank of Fujairah has made moves to accommodate the financing needs of their female Emirati clientele

Zainab Zainab Hussain Hussain Ahmed Ahmed Ibrahim Ibrahim

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ccording to the 2015 Female Entrepreneurship Index developed by the Global Entrepreneurship Development Institute, one of the weakest areas identified for the MENA region, and the UAE, was access to Tier 1 financing, pertaining to debt capital and financial literacy.

Further information available from the Ministry of Economy suggests that the rate of women setting up businesses rose from a rate of 0.1 per cent in 2006 to 1.4 per cent in 2011. Today, according to the Ministry, approximately half of the SME sector is managed by women. Although hard data remains difficult to come by,

46

the Government has flagged this segment as a national priority, according to Zainab Hussain Ahmed Ibrahim, Unit Head, Elham at National Bank of Fujairah (NBF).

She added that focus groups that were organised by NBF led to the conclusion that Emirati businesswomen and entrepreneurs greatly appreciate more support for their aspirations.

As such, NBF Elham, a collection of banking services for Emirati businesswomen, was established in 2015 against a backdrop of growing national awareness of the economic contributions made by this demographic.

“Whilst the UAE has issued countrywide directives committed to easing the transition of Emirati women into the corporate world, statistical and anecdotal evidence suggest that local female entrepreneurs, regardless of their strong ability and desire for success, still face challenges in receiving the appropriate support for their businesses,” said Ibrahim.

When developing the product to cater for their business needs, the bank had to consider several different factors, from its mission and commitment, to supporting the local economy.

“Through various discussions with our Emirati clients and female relationship managers it was obvious that although the entrepreneurial spirit is very much alive in the UAE, many Emirati women entrepreneurs are not aware of, or do not have ready access to, the working capital, financial tools and expert guidance that would otherwise be available to other business owners,” said Ibrahim.

She added that Emirati businesswomen play an increasingly crucial role in the future of the UAE, and as a customer segment, it is certainly deserving of greater attention from the local banking sector. Just as the government is actively pushing for greater inclusion of talented local women into the socio-political and economic spheres, the team at the bank felt that there is much more that NBF can do on the ground to support the growing number of female Emirati businesswomen.

In many cases, a number of Emirati women work from home without establishing business premises, while many others have reported a lack of financial literacy to meet the minimum requirements of corporate lending.

“This particular segment of banking faces many challenges on an

It [NBF Elham] aims to level the playing field for aspiring Emirati female business leaders and pave the way for their greater participation and success in the local economy.

– Zainab Hussain Ahmed Ibrahim, Unit Head, Elham at National Bank of Fujairah

ongoing basis. The fact that we are targeting a niche segment within the market only emphasises that local sensitivities will naturally resurface, and that communication across the board requires a unique approach that specifically targets Emirati businesswomen,” said Ibrahim.

She added that since the UAE is a male-dominated market, women often find it challenging to break out and obtain the required financing for their new business ideas.

Many even lack the confidence or business knowledge that would help them develop their ideas into established companies.

“Many NBF Elham clients have not approached banks for corporate facilities in the past, and are excited by the prospect of developing business with this unique solution. The fact that NBF Elham actively supports women by offering banking and advisory solutions; financial literacy workshops; engaging activities to further develop and educate Emirati women; as well as a dedicated team of Emirati relationship managers to maintain a solid relationship with clients and provide them with the support they need, the offering has received a great deal of interest in the market,” said Ibrahim.

However, Emirati businesswomen still prefer traditional banking to modern-day solutions including online banking. Enthusiasm towards the online offering will still require sometime before it catches up with that of the traditional offering.

NBF Elham caters to a wide spectrum of clientele, not just existing NBF customers. Financial solutions are available to small corporates with turnovers of less than AED 10 million to larger companies with turnovers greater than AED 40 million.

There has been an interest in NBF Elham from clients in various industries including but not limited to design, engineering, education, and trading.

Current accounts can be opened for corporates with businesswomen working under the Intlaq scheme [an initiative by the DED to encourage more UAE nationals to set up businesses from home], as well as for newly established companies and for well established businesses.

There are different qualifiers for current and new businesses. An existing company can only apply for an NBF Elham account if the company or a share of the company is owned by an Emirati businesswoman. It is a must for the Emirati businesswoman to be an active partner in the business, said Ibrahim, particularly when it comes to business operations and decision making. Supporting documentation required includes a valid trade licence, a passport copy, and the Emirates ID of the business owner.

For new companies, standard procedures apply. The bank will do its due diligence; take a look at the business model and assess collateral or guarantees. Once these are in order, the bank will then provide credit facilities according to the business’s needs and cash flows.

From a lending perspective, the core principles remain; credit facilities will be provided to businesses with established track records and viable business plans.

“NBF Elham will ensure that the entrepreneurial spirit amongst Emirati women is matched with their access to working capital; financial tools; and expert guidance. It aims to level the playing field for aspiring Emirati female business leaders and pave the way for their greater participation and success in the local economy,” added Ibrahim.

She added that NBF Elham is a programme that aligns with government directive in pushing for greater inclusion of talented local women into the sociopolitical and economic spheres, while encouraging a stronger entrepreneurial culture within the country as well as partnering with Emirati businesswomen as they achieve further breakthroughs in their respective industries.

“Despite the statistical and anecdotal evidence that suggests that local female entrepreneurs, regardless of their strong ability and desire for success, still face challenges in receiving the appropriate support for their businesses–with more than 44 per cent of women stating they feel a lack of support, and with a success rate of only 40 per cent of female business-owners–NBF Elham still aims to help female entrepreneurs overcome such challenges and contribute towards the growth of the UAE economy,” said Ibrahim.

The programme supports the UAE’s government ambition of becoming one of the world’s top 25 countries for gender equality by 2021.

WWW.FINANCEMIDDLEEAST.NET

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BEHIND THE SCENES

The

Coffee Club Ravi Chandran, CEO, Liwa Minor discusses the direct correlation between investing in staff and seeing bottom line growth in the brand We Wefocused focusedon onhiring hiring staff stafffrom fromZimbabwe, Zimbabwe, Kenya, Kenya,South SouthAfrica, Africa, Albania, Albania,and andMacedonia.

Macedonia.

These Thesenationalities nationalitiesare are naturally naturallygood goodat atcustomer customer service; service;they theycan cansolve solve problems problemsquickly, quickly,and and they theycan caninteract interactvery verywell well with withother othernationalities; nationalities; they theycan canentertain entertainthe the kids; kids;their theirconversations conversations with withthe theguests guestsare arevery very fluent, fluent,whereas whereasother other nationalities nationalitiesmay maynot notfeel feel very verycomfortable comfortabletalking talkingto to guests guestsso sofreely.” freely.”

Ravi Chandran

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“We have our own academy with trainers and our staff goes through the training system for the first three months and they have an assessment. When a person joins the company, regardless of the position, they learn everything. Service staff must cook, and the kitchen staff must serve customers. This cross training means that they understand the business very well. If we are understaffed in the kitchen somebody from service can assist in the kitchen, whether to make eggs benedict or to a steak. If we need help in the front, a member from the kitchen can step in and help.”

t s with ingredients. We do no “We follow standard recipe t that has been selected and deviate from any ingredien es for any val from the brand principl approved. We need appro do not ser ve that product.” changes or else we

“I always focus on innovation and with innovation. I tell them I wan how we can differentiate from the competition. We try to get our inventions have come from crazyt the crazy suggestions first and then the normal suggestions. Somstaff involved Chinese tourists; they make up ideas. We have an outlet in Sheikh Zayed Grand Mosque and the e of the best and Arabic, but the some of these80 per cent of our customers there. Our menu board and posters re are plenty of the fridge rather than ordering a tourists cannot read, speak, or write English. So they would pick were in English coff som Arabic and Mandarin and added ee and talking with our staff. So we changed all the menu boards ething from a number. Customers can either point it out on the sheet or they into English, can use the number which is easier for them.”

“Sometimes customers come in and their phone battery is dead. In some restaurants they will take your phone away to charge it, or they might not have a charger at all. We have power packs in every restaurant. The customer can stay connected while they enjoy their meal. The product is the core, but the focus is the overall experience.”

“We will train our staff and if they are doing well they can get promoted within six months or a year. If we decide to open another branch, a staff member who has been for a year could become a supervisor, for example. We try to put them on a fast track by saying ‘You’re really talented, you’re really good, and we want to reward you’. They are also happy because their salary will increase and their title will improve, so they want to stay. Service levels are not on a par in the region and that is because companies generally do not invest in their staff. They look at short-term profits. They do not want to invest in training, which is an expense that pays off in the long run.”

WWW.FINANCEMIDDLEEAST.NET

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LAST WORD

Working together TAREK BAYAA, CHIEF COMMERCIAL OFFICER, BAYZAT DISCUSSES GIVING HIS TEAM AUTONOMY TO DRIVE THEIR OWN, AND THE COMPANY’S, SUCCESS current output and arranging strategies to meet demands. At Bayzat, no two days are the same! It is a very dynamic environment and the team is very agile.

What is the most challenging aspect of what you do?

Trying to stay ahead of the game by anticipating the needs of our clients– even before they know it themselves, is a challenge. The other challenge is providing the right amount of guidance to the team to enable them to recognise opportunities and get deals signed.

It is important for me to create the right balance to make sure the team aggressively meets their revenue goals.

Every person is motivated in a different manner and my job is to find that right way to drive success.

What is your leadership style?

Tarek Bayaa

Very simply, I consider each member of the team to be the CEO of their own territory. As long as they get their tasks done, I do not interfere.

How do you prepare for the day ahead?

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

My day starts with meeting my sales leaders and representatives to discuss key deals and plan our approach. I also keep a very close watch on the client experience and make sure I am well connected with the service and support side of the business. I am also closely involved in monitoring new market opportunities. Setting up and attending client and investor meetings, liaising with our sales team to understand their successes and obstacles, reviewing

50

I have a good breakfast and gym session, and make sure my calendar is thoughtfully laid out to give me ample time to review and digest the information received throughout the day.

If you were to thank one person for helping you become the person you are today, who would it be and why?

My parents have always encouraged me to pursue the things I was interested in. They instilled me with the tools and means to be where I am today.

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

Rather than calling it a failure, I would term it my biggest lesson. I learned not to spread myself too thin. I love trying to do multiple things at once; however I learned to focus all my time and energy into achieving one goal.

DEFINE SUCCESS IN FIVE WORDS. Vision, fulfilment, persistence, consistency, discipline.

WHAT IS THE ONE QUALITY A POTENTIAL EMPLOYEE SHOULD HAVE? Drive.

WHAT MOVIE OR NOVEL CHARACTER DO YOU MOST IDENTIFY WITH? Atticus Finch, To Kill a Mockingbird.

WHAT WOULD YOU MOST REGRET NOT HAVING DONE BY THE END OF YOUR LIFE? I would regret not exploring all the countries of the world.

IF YOU RULED THE WORLD, WHAT WOULD YOU CHANGE?

I would change our reliance on money.

WHAT SUPER POWER WOULD YOU LIKE TO HAVE? If I could fly it would save a lot on airfares.

Introducing NBF Elham Specialised banking for Emirati businesswomen

In the UAE, women play an increasingly vital role in society and business. As a firm supporter of the country’s socioeconomic progress for over 30 years, National Bank of Fujairah is pleased to introduce NBF Elham, a business unit dedicated to providing bespoke solutions to Emirati businesswomen.

Leveraging the bank’s business expertise, local insight and experienced female Emirati relationship managers, you can be assured of NBF Elham’s support as you continue to break new boundaries.

Find out how NBF Elham can help you realise your ambitions and achieve greater success.

Call 8008NBF(623) or visit nbf.ae.

FME 61 cover.indd 2

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THE HERITAGE OF YOUR WEALTH...

ISSUE 61

ISSUE 61

DIGITAL DIVERSIFICTION

With better convenience and ease of selection, digital business is the way forward. – Adeeb Ahamed, Managing Director, Lulu Exchange Holdings

DIGITAL DIVERSIFICATION INSIDE Licensed and regulated by Central Bank of UAE FME 61 cover.indd 1

600 546656

www.nationalbonds.ae/prestige

Preserving the legacy of your business (pg 14) Developing the UAE with solid career plans (pg 16)

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