ruwad-eng-may2011

ENTREPRENEURS

BOUTIQUE MUSCAT

TUTORIALS

MAXIMIZE EMAIL MARKETING

TOP SHOT THE FACEBOOK MAN

Ruwad Founding Member:

FOR THE NEXT GENERATION OF BUSINESS LEADERS

APR-JUN 2011 An

Barriers to the development of SMEs

Alam al-Iktisaad Wal A’maal

P r e s e n t a t i o n

Growth rate in 2010

Omanization policy for SMEs

Problems in raising funds

Difficulty in getting contracts from large public/private sector organizations

SME SURVEY

Exclusive qualitative findings about the SME sector

Apr-Jun 2011

From The Editor’s Desk BE POSITIVE There has been a lot of anxiety among the SMEs with path breaking changes taking place in the government policies and the changing dynamics for the private sector companies. Some of the SMEs have suffered temporarily during the period of unrest and many are going to bear the brunt in the coming months as result of the change in policies. It is not going to be easy for them for sure but there is a silver lining during these tough times.

CONCEPT Akshay Bhatnagar

MARKETING Business Head - SBU Kush Gupta

CONTENT Khalfan Al Rahbi Ghalib Abdullah Al Fori Turki Al Balushi

Marketing Team Jisha Velluvan

DESIGN Art Directors Sandesh S. Rangnekar Minaal G. Pednekar Designers Khoula Rashid Al Wahaibi Aliya Saif Al Wahaibi Senior Photographer Rajesh Burman Photographers Motasim Abdulla Al Balushi Sathya Das Production Manager Govindaraj Ramesh

CORPORATE Chief Executive Sandeep Sehgal Executive Vice President Alpana Roy Vice President Ravi Raman Senior Business Support Executive Radha Kumar Business Support Executive Zuwaina Said Al-Rashdi Distribution United Media Services LLC

Ruwad Strategic Partner

Published by United Press & Publishing LLC PO Box 3305, Ruwi, Postal Code - 112 Muscat, Sultanate of Oman Tel: (968) 24700896, Fax: (968) 24707939 Email: publish@umsoman.com All rights reserved. No part of this publication may be reproduced without the written permission of the publisher. The publisher does not accept responsibility for any loss occasioned to any person or organisation acting or refraining as a result of material in this publication. Alam Aliktisaad Wala’mal accepts no responsibility for advertising content.

Copyright © 2011 United Press & Publishing LLC Printed by Oman Printers Correspondence should be sent to: Ruwad, United Media Services PO Box 3305, Ruwi 112, Sultanate of Oman. Fax: (968)24707939

Recently, the government declared that an additional RO 1 billion will be spent during 2011, over & above the allocations made during the State Budget announced in the beginning of the year. It is an increase of almost 12.5 per cent over the planned RO8.1 billion public expenditure. This extra spending will boost the economy and lead to more business opportunities for the SMEs as well. The government will spend additional RO444 million to support the recruitment of over 40,000 Omanis in various ministries and related government bodies. Moving on, another RO473 million will be spent on providing unemployment benefits, increased pension and cost of living allowance. This will substantially add to the purchasing power of the existing and new work force. Don’t forget thousands of private sector employees have also benefitted from enhancements in their remuneration.

SMEs can benefit by providing the products and services which are desired by this burgeoning work force which has an increased purchasing capacity. We can always argue that the additional liquidity will be mopped up by large business houses. Despite this, smart SMEs will identify the need gaps in the market and create business opportunities for themselves. They can take inspiration from Mark Zuckerberg, the founder of Facebook, who created a simple yet powerful and scalable business from nowhere right under the nose of global giants such as Yahoo! and Google.

Do share your feedback with us.

Akshay Bhatnagar akshay@umsoman.com

CONTENTS NEWS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 COLUMN - RASHAD AL SHAIKH . . . . . 4 COVER STORY SME SURVEY . . . . . . . . . . . . . . . . . . . . . 6

INTERVIEW- MOSLIM BIN AMIR AL-EBRI, OCCI . . . . . 12 TOP SHOT THE FACEBOOK MAN . . . . 18

NURTURING SMES . . . . . . . . . . . . . . . . 10

TUTORIALS - MAXIMIZE ON EMAIL MARKETING . . . 19

SUCCESSFUL ENTREPRENEUR . . . . . . . 12

ASK THE EXPERT . . . . . . . . . 22

An Alam al-Iktisaad Wal A’mal Presentation

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

NEWS

FISHERY ORDERS IN PLENTY Public Authority for Investment Promotion and Export Development (called earlier as OCIPED) in coordination with the Directorate General of Fisheries Resources, Ministry of Agriculture and Fisheries had organized Omani fish exporters’ participation at the International Seafood Show held in Boston, US in March. Four Omani fish companies participated in the show and had a very good response for all the products that were displayed such as lobsters, lobster tails, shrimps, groupers, sea breams, emperors, jobfish, snappers and value added fish products. Al Marsa Fisheries obtained orders for $10,000 per week and in addition is also negotiating orders amounting to $500,000 per year. Al Bahihi Fisheries also secured an order for $150,000. Further orders amounting to $500,000 are under negotiation. Oman Fisheries informed that besides orders worth $150,000 being finalized, orders to the tune of $500,000 are being negotiated with the US and Canadian buyers. Sea Pride LLC also booked orders worth $300,000.

RETAIL RENTALS CONTINUE TO BE HIGH

niche locations aimed at high-end consumers. These are

Rental rates in purpose built retail centres vary from

retail development at the Wave — both offer around 6,000

RO8 to RO32 per sq m on a monthly basis. Rental rates

sq m of leasing space. Elsewhere the supermarket sector

in retail units such as Muscat City Centre, the Wave

catering to peoples’ everyday needs continue to expand.

and the Royal Opera House are still high with retailers

The Lulu chain of hypermarkets has recently opened a

willing to pay the premium to be associated with these

33,000 sq m store in Salalah with additional chains planned

developments. 65 per cent of demand focuses at units in

for Buraimi, Nizwa and Khasab.

attracting significant tenant interest and high rental values.

Examples include the Royal Opera House Mall and the

the 100–200 sq m category, compared with 10 per cent at over 1,000 sq m. In 2010, it was estimated that Oman offered 300,000 sq m of leasable space within retail malls. The finding has been based on a recent report released by Cluttons, the real estate specialist.

The pace of retail mall development has slowed significantly, and Cluttons notes that it would appear that the appetite for further large-scale retail space has been slated to fall to a high degree in the short to medium term. Reasons for this include the fact that levels of per capita disposable income are relatively low in comparison to other GCC countries, and that Muscat is not seen as a shopping destination, unlike Dubai. The only large-scale retail mall currently under development is the delayed 60,000 sq m Tilal Grand Mall in Al Khuwair.

Interest remains good for smaller scale retail malls in

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YOUNG ENTREPRENEURS IN MAKING The Research Council (TRC) has developed a programme to run business incubators in six Muscat schools. The scheme will be implemented later this year. The objective behind the exercise is to convert students’ ideas into marketable products. Atleast 2,000 students drawn from grades seven to ten are expected to participate in this RO1.1 million unique programme which is backed up by the Ministry of Education. The drive has been aimed at inculcating the culture of innovation and entrepreneurship at an early age among the Omani youth. Depending on the success of the pilot project, the programme will be rolledout in more number of schools at a later stage.

Apr-Jun 2011

ODB LENDS RO36.8MN IN 2010 monetary value of the education and health loans reached RO3.13 million with 8.5 per cent of the loans’ total capital value. The bank also provided 142 loans for the tourist, vocational and different general services with a 4.1 per cent of the total loans. The value of the loans was RO5.13 million and this constituted 13.9 per cent of the total monetary value of loans.

ODB provided 178 loans for the timber, papers mills, printing, publishing and recasting industries with a combined value of RO3.02 Oman Development Bank (ODB) provided loans amounting to RO36.8 million to a total of 3,465 projects during 2010. The fisheries sector took the lion’s share receiving 1,610 loans, 47 per cent of the number of loans provided by ODB. The value of these loans was RO4.75 million, comprising 12.9 per cent of the total monetary value of the loans.

million. The bank granted 24 loans for the textile, leather and footwear industry with a value of RO88,000. ODB also granted 141 loans for the machines, equipment, communication and transportation industries with a value of RO3.08 million. The bank financed 29 projects in the food and beverages industry with a value of RO2.57 million. ODB also financed 15 projects in the petrochemical industries with a value of RO870,000.

On the other hand, the agriculture and livestock sector received 1,106 loans accounting for a 31.9 per cent share of the total number of loans provided for all the economic sectors, representing RO5.32 million and 14.5 per cent respectively in value terms. From the value standpoint,

NAWRAS INTRODUCES NEW ENTERPRISE PLANS Every Nawras business customer activating a minimum

the mining, construction materials and manufacturing

of five new mobile post-paid lines before May 29, 2011

and basic minerals, attracted RO8.87 million towards 135

is eligible for free national voice calls and SMS among its

loans. These loans constituted 24.1 per cent of the

employees for three months, according to a press release

total monetary value of the loans granted to the

issued by the company. The monthly subscription fee is

economic sectors.

also waived-off for three months. At the end of the Nawras Business Group offer period, the company’s telecom

ODB provided 85 loans for the education and health

administrator will receive an e-mail alert. At that point, a

sectors in 2010. These loans constituted 2.5 per cent of the

decision can be made to continue the service for the normal

total loans provided by the bank during the last year. The

minimal subscription of RO3 per line for voice or RO1 per line for SMS or RO4 per line for a combination of the two.

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

COLUMN

MARKETING: THE KEY TO SUCCESS RASHAD JAFFER AL SHAIKH

M

arketing in small and medium enterprises (SMEs) is an issue of debate among both academics and practitioners. Theories on development of marketing in SMEs are limited. Even the existing theories are often dependent on the application of classical marketing models to smaller businesses.

Complex marketing theories may not be appropriate for small businesses and probably would not aid in the understanding of their markets.

Generally SMEs try to gain competitive edge based on quality and service, and in a few cases on price.

Marketing is also used to some extent

by SMEs to meet their targets. Generally, SME marketing is largely done through networking or a combination of transaction, relationship, interaction and network marketing.

Recently, the use of Internet marketing and e-commerce have also become popular among SMEs. Marketing in SMEs relies on personal contact networks and is often driven by the particular way an owner-manager does business. Thus, marketing in SMEs is likely to be haphazard, informal, loose,

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unstructured, spontaneous, and reactive.

Similarly, networking with customers usually involves building a relationship with one or two key individuals in those companies. Should those individuals leave then the relationship with the company would dissolve.

SMEs invest considerable time and effort in maintaining good relations with regular clients, as effective networking means maximum marketing opportunities. But to succeed in the current world of increased competition much more is needed. Ability to think strategically and a Marketing led approach will contribute greatly to the success of small business.

Studies carried out on the relationship between planning sophistication and performance in small businesses in developed countries clearly showed that those SMEs with greater planning sophistication also showed greater growth in sales. SMEs with a sophisticated planning process including written business plans reap the benefits of these efforts in the long term. Firms who adopt a marketing philosophy/ marketing orientation and convert it into actions will have superior performance.

Studies in the UK have found that marketing orientated UK engineering

firms recorded higher profits. Similar studies in Hong Kong showed that successful SMEs gave a higher priority to marketing, particularly strategic marketing planning, than other business functions in their overall approach to business.The same is now evident in Omani market as well.

The experience shows that even startups with well defined business plan and structured marketing strategies have been able to achieve the desired goals, whereas others have not been a success It is found that ‘Marketing Led’ companies seem to have more employees and had significantly greater turnover than companies in the other categories. This suggested a positive relationship between marketing activity and financial performance and growth of the companies in terms of turnover and number of employees.

Marketing Led’ SMEs were more likely to have a marketing department, an active business plan and a marketing database. This generally helps to achieve a higher turnover and development of the company.

The author is a board member of the Fund for Development of Youth Projects.

FOR THE NEXT GENERATION OF BUSINESS LEADERS

COVER STORY

SME SURVEY AN EXCLUSIVE RUWAD STUDY OF THE SME SECTOR IN OMAN BASED ON THE FEEDBACK FROM 70 ENTREPRENEURS

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Apr-Jun 2011

I

n a recent survey done by Ruwad, Small and Medium Enterprise (SME) owners have clearly expressed that Oman has an attractive atmosphere to empower this segment but more coordination and less procedures are required.

With SMEs constituting more than 90 per cent of the enterprises (in numbers) in Oman, SME sector is playing a major role in supporting the national economy, increasing local investments, providing job opportunities and supplying the market with different services and products.

Ruawd survey has been based on a survey of 70 small and medium entrepreneurs. The majority of those surveyed believe that Oman has the right environment for this sector to flourish.

On the other hand, 49 per cent of the studied cases see the need for lesser and quicker procedures by the government bodies to provide the required permissions to SMEs. In the survey, 30 per cent respondents think that the biggest challenge they are facing is lack of finance and financial support. Internationally also SMEs face the similar problem. Number of international studies have pointed out that shortage of capital is the biggest problem the SME sector faces. The financial institutions especially nonbanking financial institutions (NBFCs) demand higher interest from the SMEs compared to the large enterprises.

Banking on the loans from the banks doesn’t make a difference too; the story remains the same for the SME owner.

In the survey, 30 per cent respondents think that the biggest challenge they are facing is lack of finance and financial support

Lower coordination among organizations supporting SMEs, comes next in the list of challenges for SMEs according to 23 per cent of the respondents. ‘Difficulty in access to credit’ comes next as per 21 per cent of the respondents. On the other hand, 19 per cent of those surveyed said that ‘Lack of proper marketing skills’ is one of the main barriers for the development of the

FUNDING CONSTRAINTS OWN CONTRIBUTION TOO SMALL 10% NO PERSONAL CONTACT IN LENDING INSTITUTIONS 13%

INSUFFICIENT COLLATERALS 23%

POOR DOCUMENTATION 7%

PREVIOUS CREDIT RECORD 6%

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

COVER STORY

sector in Oman. While 16 per cent noted that SME products and services are not competitive enough in the market.

Ten per cent admitted that lack of management skills has a major role to play.

Financing Issues Almost 36 per cent of the SME owners blamed the financing institutions for having unfavourable policies in giving

Almost 36 per cent of the SME owners blamed the financing institutions for having unfavourable policies in giving loans to SMEs

FUNDING SOURCES NON BANKING FINANCE COMPANIES 14%

FAMILY 34%

loans to SMEs, while 44 per cent of them believed otherwise.

Most of them claimed that they faced many problems while raising funds.

The challenges included insufficient collaterals and non-acceptance of project proposals said 23 per cent of the SMEs interviewed. Interestingly, 13 per cent believed that personal contact in lending institutions has a role to play in raising the needed funds. Other problems in raising funds included small contribution by the owner, poor documentation and poor previous credit record (10 per cent, 7 per cent and 6 per cent respectively).

On the other hand, financial institutions are facing many risks while financing SMEs in different phases of these projects.

As a result, banks are more conscious when approving the projects to fund.

Competition and Policies Competition and marketing are other areas where SMEs are struggling. 34 per cent said that uncompetitive products & services and lack of management skills are affecting the progress of the sector. With small investments involved, the SMEs enjoy fewer risks. On the other hand, they are considered to offer a better environment in the development of an individual’s management and leadership skills as well as giving him a good marketing experience.

Such an environment motivates an individual to run his own business that reduces the pressure on the public sector in creation of more jobs.

COMMERCIAL BANKS 16%

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Regarding the Omanization policy, 57 per cent expressed their satisfaction with the policy in the SME sector while 30 per cent responded that they were

Apr-Jun 2011

not satisfied with it. In terms of business opportunities, 43 per cent said that they are facing challenges to get contracts from both public and private sectors whereas 21 per cent informed that they don’t face such problems.

Moving on, 57 per cent felt that there are not enough events for SMEs to network and showcase their business. Almost 51 per cent said that it is difficult for their business to be highlighted in media channels.

alternative resources like families to raise the needed funds.

Financial performance Talking of the state of the business, half of the respondents said that they are making profits whereas the other half reported that they are just breaking even or running into losses. In terms of the business size, 50 per cent SMEs had an annual turnover below RO25,000. This shows that a very high percentage of the

Sources of Support There are number of governmental organizations in Oman playing a major role in supporting the SME sector such as Business Diagnosis Center of MoCI, Sanad programme of MMP, Maward Rizq of MSD, Knowledge Oasis Muscat that is being supervised by PEIE, Oman Development Bank (ODB) and Public Authority for Investment Promotion & Exports Development (formerly known as OCIPED). There are other semigovernment and private organizations contributing in encouraging the sector.

They include OCCI, Fund for Development of Youth Projects (Sharakah) and GroFinIntilaaqah programme by Shell providing business development support services for the SMEs. The survey results showed that 34 per cent SMEs had to take the help of their families in raising finance for the business whereas 16 per cent got the funding from banks and another 14 per cent from other financing institutions.

Those 34 per cent who had to resort to family for the financing of their ventures said that complicated procedures followed by the financing institutions including banks forced them to explore

SMEs are very small.

Even though realizing that Internet is one of the most popular means of marketing of the business, the survey has shown that half of the SMEs don’t have a website for their enterprises. While 36 per cent of the respondents do have their website.

Most of the owners are dedicating their time fully to their own business while 29 per cent hold jobs in other public or private organizations.

BARRIERS TO THE DEVELOPMENT OF SMEs

35

30 30% 25 23%

20

21% 19%

15

16%

10

5

0

LACK OF FUNDING

LACK OF DIFFICULTY COORDINATION IN ACCESS AMONG SME TO CREDIT SUPPORTING ORGANISATIONS

LACK OF UNCOMPETITIVE MARKETING PRODUCTS & SKILLS SERVICES

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

GUEST COLUMN

NURTURING SMEs IN OMAN NOAMAN ABDUL MAJID

O

man has been enjoying sustained economic growth in recent years despite a severe downturn in many economies in the region and elsewhere. As the regional markets recover, cross-border investments gain momentum and diversification efforts by the Oman government bear more fruits; there will be stronger domestic consumer demand within the country across all economic sectors.

The venture capitalists typically operate by providing the much needed financial and management support to start-up and early stage companies 10

It will spur the entrepreneurial spirit within the educated youth and business houses to explore new territories in the business world.

As the economy grows and diversifies, there will also be demand for businesses that can cater to the local market in a more customized manner. Consequently, there will be tremendous opportunity in the private sector for setting up and expanding Small and Medium Enterprises (SMEs) in production and services sectors.

sustained, diversified and long term economic growth of any country. United States economy offers prime example in this regard. According to Kaplan and Lerner (2009), “While very few companies receive VC funding, a very large fraction of start-ups that make it to the public company stage are venture capital-funded……

Since 1999, over 60 per cent of IPOs have been VC backed. This is an extraordinary percentage considering that only 1/6th of 1 per cent of all companies are VC-backed.”

The venture capitalists typically operate by providing the much needed financial and management support to start-up and early stage companies. Within MENA region, several investor groups and private entrepreneurs have realized the potential of SMEs and reportedly developing investment models focusing exclusively on this business segment.

In order to capitalize upon these opportunities, the private sector requires constant institutional support in the form of ‘Financial and Knowledge Capital’. Such an institutional support is even more crucial for SMEs which generally have limited access to (a) long term capital and (b) sophisticated management expertise to adopt organizational best practices.

Abraaj Capital, region’s largest private equity group has acquired Riyada Enterprise Development, a Jordan based SME investment and development platform. Riyada is now being expanded and positioned as a one stop shop for all SME business requirements. Within Oman there are several investment companies that project themselves as providing venture and growth capital for viable businesses.

The absence of these two factors prevents some of the finest business ideas and entrepreneurs from realizing their optimum business potential.

Development of SMEs is most crucial for

However, there is an overwhelming focus of many such companies on the real estate sector due to good returns in a relatively short period of time. Further, many of them have not been

Apr-Jun 2011

able to develop the in-house capacity to evaluate, structure and manage their non-real estate projects. As a result any new or existing business is left with only a few options to raise long term equity capital. In some cases, where funding is available, the incoming investors do not infuse any value-added management expertise into the business.

Going forward, what we need in Oman is a greater number of investment vehicles that specialize in SME investments. These organizations should not only provide financial support to the SMEs but also help them in developing best practices, systems and procedures so that these SMEs can evolve into more competitive outfits.

SMEs generally cannot afford the services of high skilled full time employees or some of the leading names in management consultancy business. As a result, they fail to devise and implement appropriate business strategies which are most suited to the dynamics of their business.

A specialized SME investment platform with topclass business management resources at their

disposal can be a centralized server which can be accessed by various workstations at a fraction of cost. It would prevent the need of duplicating the same expensive resources at every unit which is back-breaking for any upcoming business outfit.

This investment model can especially do wonders for service sector ventures including those in education, healthcare, information technology, business support services etc. which require less capital expenditure but very high level of management and technical skills.

Business ventures in food and agriculture, retail and other similar sectors can also benefit hugely from such an investment platform.

These investment vehicles can be highly instrumental in creating job opportunities and further raising the living standards of local youth and communities. With ever-increasing economic activity across MENA region, the potential for such investment platforms is tremendous provided that they are structured and managed in the right manner.

The author is country manager - Oman for Pak Oman Investment Company. He can be contacted at noaman.majid@pakoman.com

A specialized SME investment platform with topclass business management resources at their disposal can be a centralized server which can be accessed by various workstations at a fraction of cost 11

FOR THE NEXT GENERATION OF BUSINESS LEADERS

SUCCESSFUL ENTREPRENEUR

FASHIONABLE NETPRENEURS THE SUCCESS OF ANY BUSINESS IDEA DEPENDS ON HOW THAT IDEA IS CONVERTED INTO A REALITY. RUWAD SPEAKS TO HAZAR AL ZADJALI AND HANADI ABDUL AZIZ AL ZADJALI, THE FOUNDERS OF BOUTIQUEMUSCAT.COM, ON HOW THEY HAVE DONE IT SO SUCCESSFULLY The journey between the conceptualization of an idea and its execution successfully under the real market situations is long and unpredictable. Success is preceded by numerous challenges and obstacles. Similar is the story of Hazar Al Zadjali and Hanadi Abdul Aziz Al Zadjali when they founded Boutique Muscat. “In the beginning we purchased a number of products through the Internet and offered for selling at our website. We did not expect to achieve success but we were astonished with the huge demand for our products within two weeks of the website’s launch.

We offer just one piece of each product to maintain the uniqueness.

Currently we sell apparels, shoes and fashion accessories but we are keen to add new items that are not available in the market here. The idea behind the venture was to start an electronic business but unfortunately it is not easy to turn this dream into reality here although e-commerce has become very popular in many areas in the world,” said Hazar and Hanadi. Talking further about their experience, Hanadi said, “In the initial phase, we observed that many didn’t understand the idea as they preferred traditional shopping route rather than making a purchase online.

The main problem we faced was the lack of effective banking solutions that could make the e-purchase and selling transactions possible in a convenient manner. We had to take the items to customers and get the payment directly from them.”

“One year after the launch of the website, we set up a brick and mortar retail shop to provide our customers with an opportunity to inspect the items before taking the purchase decision. This has enabled us to avoid the botheration of taking the items to the buyer’s house or office. Simultaneously, we have continued to make attractive offers on our website. We have received more than 2,000 visitors till date,” she added. “We do believe that difficulties are unavoidable in the field of business but the kind of difficulties we faced were very tough. We were about to quit the idea. We tried to get finance for the project but unfortunately failed to get

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any offer with low interest rates. To get a loan from the bank, you should be fully dedicated for running your business. Moreover, the size of loan offered for such projects is very low and not sufficient enough. Another challenge for us was the increasing rent rates,” she informed. Hazar added, “Even the advertising market was not conducive. The advertisement rates were high and we couldn’t afford them. We tried to publish our ads through the Internet. We also organized events and exhibitions to attract more customers.”

“We currently sell locally manufactured products such as shoes and accessories. We have also leased part of our store to Omani females with interest in business at a nominal cost. This has helped us to achieve two objectives -- firstly encouraging the young entrepreneurs and secondly, supplement our income also,” she added. On a concluding note, she said, “We need more support and facilities so that we could avoid incurring losses and remain competitive in the market. If SMEs receive the desired support from relevant authorities, their contribution to the growth of our national economy could be raised significantly by adding momentum to the market.”

For more information, visit www.boutiquemuscat.com

FOR THE NEXT GENERATION OF BUSINESS LEADERS

INTERVIEW

FISHING – IN TROUBLED WATERS MOSLIM BIN AMIR AL-EBRI, CHAIRMAN-FISHERIES COMMITTEE, OMAN CHAMBER OF COMMERCE & INDUSTRY TALKS ABOUT THE CHALLENGES FACED BY THE FISHERIES SECTOR IN OMAN

How many small and medium enterprises are operating in the fisheries sector?

There are about 415 small and medium enterprises working mainly in the activities of fishing and fish marketing in the local market.

Many of them market their products to several Arab markets apart from countries such as China, Japan, Korea, India, Germany, US, etc.

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What are the major challenges faced by the fisheries industry in the Sultanate?

There are many challenges facing fisheries sector in the Sultanate. The most important of them are weak guidance services and lack of awareness of professional fishing. There is lack of scientific knowledge among the majority of fishermen of modern fishing methods and

Apr-Jun 2011

techniques. There is inadequate training and absence of fishing skills development.

The training workshops and seminars on the development of fisheries are rare. The fishing harbours and landing facilities are few. In addition to that, other challenges include the absence of rest houses. Many facilities are not equipped with necessary services for the selling of fish. There is an absence of adequate infrastructure and markets in close proximity to allow fishermen to unload their catch of fish and market it directly. There is a lack of information and research on fisheries’ business. Investment are also low in fisheries.

In your opinion, what kind of support should be provided for the development of fisheries?

To grow and develop the sector, companies engaged in fishing and their marketing needs a wide range of support such as equipping fishermen with suitable sized boats fitted with good engines and safety gears, optimization of boat operation by upgrading its equipment, and developing fishing methods and techniques to achieve optimum exploitation of fish resources.

There is a need to set up markets equipped with all necessary facilities for fish marketing and near ports and harbours. Additional landing facilities and harbours should be built on the coastal line so that fishermen could unload their catch easily. More rest houses for fishermen should be built providing necessary facilities such as fishing tools, fuel, water, ice, boat maintenance and net repair etc.

It is required to provide make fishermen more professional and expert in exploiting far away resources, using bigger fishing boats and operating modern tools and equipment for long period fishing. A rich informative database must be created that should include

all necessary basic information of maritime fishing to determine and assess fish inventory, seasons of reproduction, identify types and classes of fish and develop awareness and guidance systems to correct faulty practices in professional and commercial fishing.

Professional institutes should be established to impart industrial training to attract larger segments of the society. There is a definite need for promoting the awareness of the economic significance of maritime fishing and its role in creating job opportunities.

What is the role of the OCCI fisheries committee?

The committee plays several roles with the objective of further developing this important sector. We undertake studies on fisheries and do marketing activities. We provide proposals and recommendations for resolving the issues, if any. We coordinate and communicate with government entities and related organizations to provide services and technical support to fishermen.

The committee further studies issues and find solutions for them in coordination with competent entities. In addition to that, the committee discusses drafts of laws on fisheries and gives required recommendations.

We propose programmes and policies for Omanization and training in fisheries sector to support the development.

The committee is concerned with traditional and modern fishing, natural fisheries, counter improper fishing, fish farming, fish food industries and exports. The committee provides support to fishing training institutes and encourages Omani youth to benefit from different training programmes. This helps to strengthen the qualified national workforce engaged in this business.

There is a need to set up markets equipped with all necessary facilities for fish marketing near ports and harbours 15

FOR THE NEXT GENERATION OF BUSINESS LEADERS

TOP SHOT

THE FACEBOOK MAN

social networking website with a user base of over half-a-billion.

Today it may seem a great success story but it wasn’t easy for Mark in the initial years. How it all happened? Harvard didn’t have a student directory with photos and basic information, known at most schools as a face book. Mark wanted to build an online version for Harvard but the school “kept on saying that there were all these reasons why they couldn’t aggregate this information,” he said. “I just wanted to show that it could be done.”

T

he journey of Mark Zuckerberg, the maverick entrepreneur, is nothing short of a Hollywood movie script!

He is just 26 year old and already worth $13.5 billion. He has been the youngest billionaire in the world. He was the TIME person of the year in 2010.

Every top investment firm wants to invest in his company which has a valuation of $50 billion. Some of you may not know him but probably most of you must be using his creation – Facebook.

His example amply proves that no one can stop an idea whose time has come.

If you are passionate about what you believe in and have the persistence to

18

succeed despite odds, sky is the limit.

Mark has succeeded where biggies such as Yahoo! and Google have failed. He didn’t have any Ivy League degree or backing of a rich father to start with. He started with zero money!

Mark was a child prodigy and had great interest in software programming. One of his tutors once said, “It is difficult to stay ahead of him”. At an age when kids play with computer games, Mark was busy ‘creating them’.

In February 2004, he launched Facebook from his Harvard dormitory room.

Initially it was meant for the college students and later on he expanded the scope of the website. In just seven years, it has emerged as the most popular

So one night, he hacked into Harvard’s student records. He then threw up a basic site called Facemash, which randomly paired photos of undergraduates and invited visitors to determine which one was “hotter”.

Four hours, 450 visitors, and 22,000 photo views later, Harvard yanked Mark’s Internet connection. After a dressing-down from the administration and an uproar on campus, Mark had to apologize to his fellow students. But he remained convinced he’d done the right thing.

Facebook.com was thus launched on February 4, 2004. Mark didn’t have enough resources and financial muscle to start with but he collaborated with his like-minded friends to work on the site. Rest is a history! Many attribute the wave of transformation seen in the Middle East and North Africa in the last six months to Facebook. He is not only bringing people face to face but changing their fate too!

Jan-Mar 2011

TUTORIALS

MAXIMIZE ON E-MAIL MARKETING SLIGHTLY DIFFERENT MESSAGES CAN LEAD TO VERY DIFFERENT RESULTS, SAYS JOANNA L. KROTZ WHO WRITES ABOUT SMALL-BUSINESS MARKETING AND MANAGEMENT ISSUES. SHE IS THE CO-AUTHOR OF THE MICROSOFT SMALL BUSINESS KIT

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any business owners by now have tried a round or two of e-mail marketing, and more than a few of you are less than satisfied with the results.

Figuring out what really works is a challenge.

Nevertheless, you should know this: E-mail marketing remains such an affordable and potentially cost -effective channel that it’s foolish to let the whole thing slide. Here are some ideas to revamp your efforts and net a stronger return on investment.

Offload the burdens Options for outsourcing the more tiresome chores of e-mail marketing have become a lot more effective than doing it inhouse. Offerings are flexible. You can harness software that offers customizable templates to create and distribute your content. You can outsource selected components, such as editorial services for content generation. Or you can hire outside providers to track visitor behavior patterns and preferences, including what kind of messages lead to higher conversion rates or which search engines lead to traffic likely to opt in and actually purchase.

Figure out why you’re sending the e-mail. Then define success. Is it when a recipient opens the message? Or clicks onto a landing page? Or is it a conversion measurement?

Get focused on your message Effective e-mail marketing usually has one of three goals: • Make special offers, such as discounts or time-sensitive deals.

• Send invitations to events, seminars or organizations.

• Keep in touch or make contact, for information, transactions or on behalf of a community or organization.

Slightly different messages can lead to very different results. For instance, one online retailer tested three messages, one all text, the other with the same text and an image of a young woman and the third with the same text and an image of a young man.

Demographics for the marketer were young men.

Before drafting messages or buying lists or meeting with designers, make sure you and everyone on the team is clear about the desired goal.

The result? Click-through rates for the image of the woman were highest. Not surprising. But upon investigation, the message with the man, while lower in click-throughs, had the highest conversion

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

TUTORIALS

rate — that is, more recipients actually purchased items. Peer persuasion, I’m guessing. But the moral is: Be clear about why you’re trolling and then test, test, test.

Try some next-generation ideas Once you decide on the strategic response you want, consider these mailing tactics.

Cut through clutter: Using Flash animation, streaming media with embedded audio and/or sound files and innovative HTML design can help you stand out. Of course, make sure you don’t overload anyone’s in-box.

Make subject lines count: Don’t get cute.

Don’t be familiar. Don’t trick people into opening a message — you’ll make them mad. Promise a benefit or value in the subject line. Then make sure to deliver.

Automate metrics and act on results: Set up a seamless cycle that leverages the data you collect. For instance, an e-mail goes out, click-throughs go to a especially designed landing page that controls the flow of information and drives orders. Response data is then re-introduced into the database to enrich it with specific customer data. It is not just about measuring opens, clickthroughs and opt-outs. One can look at conversion rates, sales and ROI (return on investment).

Create a call to action: Ask the recipient to do something — it’ll get you a better response. Suggestions include: Click on a link for more information. Register to receive a special offer. Go a website to qualify. Download a white paper. You can also offer games or other web download, including newsletters, screensavers and the like.

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Personalize, but don’t scare anyone: Inexpensive software now lets you identify returning customers and stay up-to-speed on buying history, likes and dislikes, geographic region and more. All that makes customers feel special — so long as you don’t cross any privacy lines.

Invest in viral reactions: Most markets include a group of influential users who will spread the messages you craft. Mine your customer database and spend a bit more for high-quality e-mail lists. Then test a few times to find the world-of-mouth folks who will spread your glad tidings.

Target the message: Too many marketers send out messages with misspelled words, typographical errors or just plain boring stuff. The e-mail should be written by a professional writer who understands the principles of human influence and the psychology behind how memory and eye movement through online pages can work.

Make it easy to subscribe (and unsubscribe): Don’t ask for gobs of information on registration forms. People will click off. And make it just as convenient to unsubscribe. Then be scrupulous about keeping lists up-to-date. Never send e-mail to recipients who don’t want it.

Time the message: When customers receive your message might make a difference, depending on the business.

People often e-mail for business products on Wednesdays. But these e-mails would get buried over the weekend and are often discarded.

Test!: Any or all of these techniques will help your e-mail marketing programme succeed. But remember, if you don’t test before you send, with a partial sample or a test group, you’ll never know what really works. source: Microsoft.com/business

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FOR THE NEXT GENERATION OF BUSINESS LEADERS

ASK THE EXPERT

TIFFIN SERVICE BUSINESS I want to start a lunch box service targeting the offices in and around CBD area in Muscat. Do I need a permission or license from the relevant government bodies? If yes, kindly brief me on the process to start this business. Secondly, if I want to scale up this business in the future do you think banks will lend money to me?

Rajeev: All business services require appropriate Government approvals, no matter how small or large they are. I suggest your starting point should be the Ministry of Commerce and Industry, or even alternately the Oman Chamber of Commerce and Industry (OCCI). I am confident that they will be able to help you out.

As regards your second question on potential interest from banks, after you have scaled up your business, I think there should be some interest. Some banks are now focussing on small and medium enterprises (and have set up departments with this clear focus), and they will be the people to approach.

medium enterprises and I suggest you should also look at such institutions.

Inputs from the Editor: It is a good idea to start a business providing tiffin service in the CBD area. However, you must study the market properly before venturing into it. Currently, many restaurants located in CBD and Ruwi areas provide such services.

Many established catering firms also have a substantial clientele in the area.

If you look at the profile of the companies operating in the CBD area, many large entities are exiting from the banking sector. Many banks are moving their headquarters and other departments from this area to newer locations. BankMuscat has done it already and many other banks are expected to follow suit.

This may affect the demand for tiffin services in the short-to-medium terms. However, if you could identify your niche, say providing ‘home-cooked food’ or a particular kind of cuisine catering to the taste of a certain community, you may be a winner!

I am aware that Oman Development Bank focuses on this area. BankMuscat has specifically set up a department to target this segment, and there will be a couple of other banks too.

In addition, there are a couple of other institutions (such as Sharakah and Intilaaqah etc.) which try to assist the small and

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Rajeev Singh, Partner

Please email your queries on entrepreneurship to akshay@umsoman.com and they will be answered by Rajeev Singh of Ernst & Young

If you could identify your niche, say providing ‘homecooked food’ or a particular kind of cuisine catering to the taste of a certain community, you may be a winner!