Private Sector Qatar English | April 2014

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APRIL 2014

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Glowing success Qatar Shell’s powerful opportunities for the Private Sector p38

WHY EXPORT?

Getting the best from a classic option

SHAPING THE WORLD Power comments from Vikram Shroff

KEEP ON TALKING

Our Round Table on the strategy agendas for 2014

WE DON'T JUST WORK WITH THE BEST SUPPLIERS. WE ALSO WORK WITH THE BEST LOCAL SUPPLIERS. At Shell, we seek out ways to support Qatar's National Vision 2030 - in social, human, environmental and economic development. This includes helping Qatari entrepreneurs and encouraging growth by sourcing materials and services from local suppliers. At our state-of-the-art Pearl GTL plant, the need for large amounts of hydrochloric acid within the production process is met by Qatar Vinyl Company (QVC), a world–class chemicals and materials manufacturer. It’s just one example of Shell’s commitment to ‘local content’ in everything we do. To register your interest in becoming a supplier to Qatar Shell, please contact Qatar.Shell.Vendors@shell.com

@Shell_Qatar

Pearl GTL at Ras Laffan is the largest Gas-To-Liquids plant in the world.

ADVISORY BOARD Private Sector Qatar is pleased to introduce you to top industry champions who will be bringing added value to the publication. These key Ć‚IWTGU YKNN PQV QPN[ UJCTG VJGKT YQTNF ENCUU GZRGTVKUG DWV YKNN CNUQ QHHGT KPUKIJVU QP NGCFGTUJKR OCPCIGOGPV CPF ITQYVJ UMKNNU VJTQWIJ VJGKT EQPVKPWCN EQPVTKDWVKQP VQ VJG OCIC\KPG +V KU YKVJ ITGCV FGNKIJV VJCV YG YGNEQOG VJG HQNNQYKPI NGCFKPI RGTUQPCNKVKGU

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Abdulaziz Bin Nasser Al Khalifa %JKGH 'ZGEWVKXG 1HHKEGT 3CVCT &GXGNQROGPV $CPM

Professor Nitham M. Hindi &GCP %QNNGIG QH $WUKPGUU CPF 'EQPQOKEU Qatar University.

Dr. Ivan Misner (QWPFGT %JCKTOCP $0+

Vikram Shroff &KTGEVQT 4GICN )TQWR &WDCK

Raed Al-Emadi %JKGH 1RGTCVKPI 1HĆ‚EGT Silatech.

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Hamad Mohammed Al-Kuwari /CPCIKPI &KTGEVQT 3CVCT 5EKGPEG Technology Park.

Wael Sawan /CPCIKPI &KTGEVQT CPF %JCKTOCP Qatar Shell.

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MANAGEMENT Dominic De Sousa Chairman Nadeem Hood Group CEO Georgina O’Hara Group COO EDITORIAL Group Director of Editorial Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Group Managing Editor Melanie Mingas melanie.mingas@cpimediagroup.com +971 4 440 9152 Associate Editor Victoria Connolly victoria.connolly@cpimediagroup.com ADVERTISING Group Director of Sales Carol Owen carol.owen@cpimediagroup.com +971 4 440 9110 Commercial Director - Business Division Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 Media Sales Executive Ibrahim Parwaz ibrahim.parwaz@ cpimediagroup.com +971 4 440 9161 Media Sales Executive Emma Hughes emma.hughes@ cpimediagroup.com +971 4 440 9120 Event Sponsorship Manager Gill Fairclough gill.fairclough@ cpimediagroup.com +971 4 440 9120

FROM THE EDITOR One of the key challenges for the private sector - one that both external observers and local analysts have long been aware of - is the need for better awareness of the role of Corporate Governance and Best Practice. The days when businesses could simply plough a lone furrow and ‘do their own thing’ are not simply passing - they’re long gone. The private sector businesses that will thrive in today’s climate are those where Best Practice is not only encouraged, but inscribed in compliance with accepted international benchmarks. This is one of the reasons why the recent announcement by Shell regarding the launch of seven new tender opportunities is so important. More than being RWTGN[ VJG EQOOGTEKCN UKIPKĆ‚ECPEG QH VJG VGPFGTU VJGOUGNXGU YJKEJ QH EQWTUG can be considerable), it’s the fact that Shell will work with the successful applicant for a considerable ‘incubation’ period, mentoring the business on qualitative requirements such as the need for Best Practice protocols and a comprehensive understanding of factors such as risk management and international safety UVCPFCTFU 6JKU KU CP QRRQTVWPKV[ HQT RTKXCVG UGEVQT Ć‚TOU VQ DGPGĆ‚V HTQO VJG YQTNF class understanding of benchmarking that a global player of this calibre can bring to bear. It’s the growing prevalence of initiatives of this kind that will eventually tip the balance and ensure that far from Governance issues being perceived as a ‘luxury’, they will instead be part of the DNA that shapes the way even relatively humble Ć‚TOU ECP VJKPM RNCP CPF CEV It’s also appropriate that we’re able to give coverage of this new tender initiative here in the ‘new look’ Private Sector magazine. The magazine has in essence been re-launched to provide extremely relevant economic data, working as a very RTCEVKECN nVQQN MKVo VQ CFXKUG CPF KPHQTO Ć‚TOU JGNRKPI IWKFG VJGO VJTQWIJ VJG OC\G QH FCKN[ EQOOGTEKCN EJCNNGPIGU ;QWoNN Ć‚PF C IQQF FGCN QH RTKOCT[ TGUGCTEJ YKVJ data never previously published - and insightful comment from acknowledged industry experts. We’ve also combined analysis with a number of very practical ‘how to’ features, tackling some of the factors that many business owners and directors will need to execute in their day-to-day lives. Our goal is to create a magazine that is not only truly valuable to private sector entrepreneurs, but which can be a powerful force for advancement and professional development in the sector itself. Enjoy this issue of Private Sector Qatar!

MARKETING Head of Marketing and Events Julia Jagiello julia.jagiello@cpimediagroup.com +971 04 440 9131 DESIGN Head of Design Glenn Roxas Production Manager James Tharian Distribution Manager Rochelle Almeida Data Manager Rajeesh Melath

i>` "vwVi PO Box 13700, Dubai, UAE Tel: +971 (0) 4 440 9100 Fax: +971 (0) 4 447 2409

Paul Godfrey Senior Editor

Talk to us: E-mail: paul.godfrey@cpimediagroup.com Twitter: @PrivateSectorQA Facebook: /PrivateSectorQatar LinkedIn group: Private Sector Qatar qatar.smetoolkit.org/qatar/en

WWW.PRIVATESECTORQATAR.COM/EN PRESENTING PARTNER

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CONTENTS

01 ADVISORY BOARD A high-powered panel of industry leaders who bring world-class expertise to the publication. 03 EDITOR’S NOTE Paul Godfrey on the pivotal role of corporate governance and best practice in shaping the future of private sector enterprises. Entrepreneurship Profile 08 MOST ‘ADMIRED’ LEADERSHIP COACH Our exclusive feature on world-class expert, leadership coach, and venture capitalist – Mark C. Thompson. 12 SHAPING THE WORLD Vikram Shroff talks to PSQ about how KHőV HVWDEOLVKHG DQ LQŶXHQWLDO UHSXWDWLRQ as a formidable SME champion.

“If we look around the world at those nations where the SME space is most developed, we see repeatedly that a supportive government is the catalyst.” p12

Enterprise 18 TALK IT UP In a special roundtable feature focused on the future of the private sector enterprise, we present insights from some of Qatar’s leading personalities. 22 BUILDING A BRIDGE TO PRIVATE ENTERPRISE An exclusive spotlight on the upcoming IASP 2014 world conference and its impact on the private sector. Business Education 26 ENTREPRENEURSHIP EDUCATION Supporting the young business men and women of Qatar in their bid to enter the new world of private enterprise.

CONTENTS

Qatar’s projects market having significant activity in 2014 with infrastructure and transport contract awards expected to peak at USD 24 billion p34

As the world is progressing WRZDUGV PRUH ĹśH[LELOLW\ and advancement in trade transactions, the demand for new approaches has increased DPRQJVW ([SRUWHUV ,PSRUWHUV and Banks. p44

Do you want a lender who will keep their distance and simply ask for set repayments? p64

An effective succession plan has the ability to make any transition as smooth as possible, without disrupting business operations p68

Analysis 30 EXPORTING – YOUR NEXT STEP TO GROWTH Senior correspondent Aparna Shivpuri Arya offers advice on using a strong export strategy to take your business to the next level. 34 BRICK BY BRICK – BUILDING QATAR’S INFRASTRUCTURE We highlight the challenges and the opportunities. Business Opportunities 38 A TIME OF OPPORTUNITY Qatar Development Bank and Qatar Shell hosted a keynote event dedicated to seven important tenders - the SME Business Opportunity Workshop Trade and Finance 44 ROADMAP – TRADE FINANCE TRENDS AND THE DRIVERS OF CHANGE Experts from Doha Bank shed light on the current scenarios and presents a compelling survey of market data‌ 50 EXPORTING TO EXPAND How Qatar’s SMEs are looking to grow via international markets‌ 52 LAYING THE FOUNDATIONS FOR BRAND QATAR Key initiatives that aim to make

profound differences in the make-up of the Qatari economy. Business Toolkit 56 SOCIAL MEDIA: ‘BIG’ OPPORTUNITY FOR ‘SMALL’ BUSINESSES Achieve social media success in ten simple steps. 60 YOUR STARTER FOR 10 Top sales and marketing tips that are easy, practical and effective. 62 P FOR PEOPLE, P FOR PROGRESS Sound HR strategies that every SME should implement. 64 GETTING FINANCE SUPERCHARGE YOUR BUSINESS AND SECURE THE FUNDS YOU NEED Our keypoint guide will help you maximise your chances of attracting funding. 68 SUCCESSION PLANNING – SAFEGUARDING YOUR BUSINESS FOR THE FUTURE Is your business ready for any sudden, unexpected changes? Downtown 73 A SENSE OF TURBULENCE We explore the work of one of the Arab world’s most distinguished artists, Mona Hatoum.

Most ‘admired’ leadership coach - Mark C. Thompson p.8 Shaping the world - Vikram Shroff p.12

ENTREPRENEURSHIP PROFILE www.privatesectorqatar.com/en

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ENTREPRENEURSHIP PROFILE

MOST ‘ADMIRED’ LEADERSHIP COACH MARK C. THOMPSON

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Entrepreneurs in the region are often struggling to secure any funding they possibly can to transform their ideas into successful businesses. There’s no denying of the fact that this is a top priority. But – something that they completely ignore, sadly to their own peril, is the importance of connecting with a mentor; an experienced industry expert who can offer guidance on core management issues. And, who better to turn to than a world-class expert who has worked with some of the top entrepreneurs in the world? In an exclusive interview with Private Sector Qatar, Mark C. Thompson addressed these queries and offered excellent advice on how you can be the next entrepreneurial genius‌

Mark, what are some common traits that you find in every entrepreneur? Is there is a predefined template? “If there’s a common part of DNA in every entrepreneur, I would say it’s appetite for risk and competition. You may be an introvert or an extrovert; no matter what your personality type is, you need to have that sense of doing something special and creating an impact on the world. And this requires a competitive edge.�

Just about every entrepreneur is looking for ways to defy the initial roadblocks – colossal risks, scarce resources, limited capital – and emerge triumphant on the top. In this quest for success, however, he or she often overlooks the fundamental principles of management, leadership and business growth. Here, ZH žOO WKLV JDS E\ VSHDNLQJ WR ZRUOG UHQRZQHG H[SHUW leadership coach, venture capitalist and bestselling author – Mark C. Thompson.

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Having worked with some of the top entrepreneurs in the world, would you say entrepreneurial geniuses like Steve Jobs are born or trained? Is it nature or nurture? “Steve Jobs was born an entrepreneur. He was an artist. The story of Steve Jobs is one of the hardest. He was always coming back to industrial design, always having this Edison or Picasso like vision on how to reorganise what engineers had worked tirelessly create complexity into – he made it simple and aesthetically beautiful – concepts that people never imagined around engineering.

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“THE IDEA OF ENTREPRENEURSHIP IS NOT ABOUT EVERYBODY WANTING TO BE DOING THEIR OWN THING, IT’S ABOUT FINDING A PRODUCT OR SERVICE THAT CHANGES THE GAME IN THE MARKETPLACE AND IMPROVES PEOPLE’S LIVES OR OFFERS A BETTER VALUE EQUATION FOR THE CUSTOMER�

So, to answer your question, that entrepreneur was born, not made. “The biggest problem that you don’t learn to solve at management school is how to manage and motivate great people to do the work for you. Entrepreneurs and managers have to learn to evolve that skill over time. If you want to scale your business, you need a room full of people willing to put everything they have into your business. In fact, a great example is that of Richard Branson, who often says – we don’t have to be stars as individuals but we have to be a star as a team. Remember, nothing worthwhile ever gets done alone.�

Do you think the increasing push towards entrepreneurship is at the cost of good old management skills? If everyone becomes an entrepreneur, who will be responsible for the daily business activities? “I think this is a great question because it shoots down to the deep mythology of the meaning of the word entrepreneur. Going back to my previous analogy, I don’t think an entrepreneur is a lone wolf. The idea of entrepreneurship is not about everybody wanting to be GRLQJ WKHLU RZQ WKLQJ LWÂśV DERXW ÂżQGLQJ a product or service that changes the game in the marketplace and improves people’s lives or offers a better value equation for the customer. It’s innovation, that’s what entrepreneurship is to me. And, to achieve this you need to have a fantastic team. Remember, nothing great was ever built alone.â€?

What is the formula for unstoppable growth? “As I just mentioned, constantly reinventing yourself is the formula for unstoppable growth. This is actually Richard Branson’s business model. He takes existing businesses that have

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become slow and complacent and reinvents them. He adds energy to them so that they get back to where they started from and are back to doing what they were special at – he reinvents. Let’s take an example. At Intel, they always have a new chip that is going to come out and cannibalise their own chip – that’s the formula for unstoppable growth. It’s like do onto yourself before others do onto you! But, I should add here that this is pretty hard to do because once you have success you tend to become more risk-averse.�

Why do you think companies get complacent after they’ve tasted success? “Because it’s comfortable and defensible. For instance, when you want to do something new, you go to the company’s board of directors and say now I want to mess with what’s working. Their reaction won’t be very welcoming. But, in reality, if you aren’t doing constant research and development, someone else will come along the way and do it and invent something new!�

What are some key factors you look for when investing in a startup or small business? “I think venture capitalists tend to be risk-averse – which I understand is a bit ironic – because as a venture capitalist you are taking a whole lot or risk anyway. I like to look at the history of the individual raising this capital. I consider leadership traits and I like to see a new way of approaching a business. This is of abundant VLJQLÂżFDQFH EHFDXVH RWKHUZLVH DOO you are doing is going with very little capital into a very competitive business; I need a fresh new approach. What’s going to be the game-changer and how can you demonstrate that to me? So, to summarise, I look at experience, differentiation, and game-changing value.

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“Another important thing to mention here is that an entrepreneur needs to put some thought into who (venture capitalist) they want to work with as well. In reality, the business owner has more experience as he or she is dealing directly with the customer. On the other hand, the VC or the investor probably has a broad perspective depending if they’ve had any prior experience in the industry. What I would suggest to an entrepreneur, in this regard, is to get VPDUW PRQH\ 'RQ¶W MXVW JHW WKH ¿UVW ¿QDQFH WKDW¶V EHLQJ UDLVHG RU JLYHQ WR you. Select an investor as carefully as you would hire somebody, so ‘hire your money’. I know it’s hard to raise capital but dumb money can often be more GDPDJLQJ LQ EXVLQHVV ´

What are some common mistakes aspiring entrepreneurs and SME owners make in the process of building their business? “I think that it’s important to understand that you as an entrepreneur are both an asset and impediment to your business. There are three common errors that I see HQWUHSUHQHXUV PDNH YHU\ RIWHQ ´ Mark further explains these three mistakes: Hire great talent: One area that entrepreneurs aren’t naturally good at – and don’t necessarily learn at management school – is recognising and attracting great people to work within their company. Entrepreneurs need to employ people that are passionate about the business and are willing to give their 100 per cent to it.

Stay ahead of the curve: Mark also suggests introducing innovative solutions within your business – such as high-tech mobile applications that augment the overall experience of a customer. Constant innovation, especially during the early stages of business, is extremely important.

“SELECT AN INVESTOR AS CAREFULLY AS YOU WOULD HIRE SOMEBODY, SO ‘HIRE YOUR MONEY”

You are the co-author of the popular publication - Admired: 21 Ways to Double Your Value alongside Bonita S. Thompson. Tell us a little bit about your “Admired” analogy. How is this important within a company? “The reason we use the word ‘admired’ is because a lot companies work really hard to get on Fortune’s Most Admired list. The idea behind this is not just because they want to be admired but because the companies that are admired have brands that are WKH ¿UVW RQHV WKDW FRPH WR PLQG ZKHQ you think of a particular product or service. For instance, when you are looking for a cool consumer electronic item, Samsung immediately comes to mind. It de-risks the value equation – I know what I’m getting when I get a coke or a McDonalds Burger – now that’s being admired. So, it’s about the intrinsic values that make consumers UHDFK RXW WR \RXU SURGXFW ¿UVW ´

Delegate: A calamitous mistake that entrepreneurs tend to make is not being able to share responsibility. Entrepreneurs tend to look at their business like a baby and want to nurture its growth all by themselves. Although it might not be as intuitive as it seems, delegating tasks to experienced professionals at different stages of business growth is crucial.

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ENTREPRENEURSHIP PROFILE

SHAPING THE WORLD Vikram Shroff is no stranger to the world of private sector entrepreneurship: as a Director at Regal group - one of the UAE’s EHVW NQRZQ GLYHUVLŵHG businesses - he’s established a powerful and LQŶXHQWLDO UHSXWDWLRQ DV D formidable and ethicallydriven SME champion. As we welcome him to the Advisory Board of Private Sector Qatar, this is a perfect opportunity to gain the views of a seasoned expert whose skills not only supercharge the businesses he’s pioneered but have led to a strong appreciation of the unique climate for SMEs across the GCC nations… 12

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What do you see as the prime factors currently influencing the SME sector in the region? “This is an interesting question, because it seems to me that one of the most important elements is often overlooked. One of the prime factors is the role of Government itself, and if we look at states like Qatar and the UAE, we can see that their governments recognise how important the SME sector actually is. If we look around the world at those nations where the SME space is most developed, we see repeatedly that a supportive government is the catalyst. Singapore is a classic example. Here in the GCC, it’s proving to be the awareness and encouraging attitude of governments that is driving the expansion of SMEs. For example, there are so many government-backed initiatives , not to mention a very healthy and encouraging attitude to entrepreneurship courses and training.”

Do you believe that Qatar can play a key role in the SME space for the GCC as a whole, given the dominance of fossil fuel in the economy? “Yes I do. My view is that Qatar can become a Champion of the SME sector. The current predominance of the fossil fuel sector is precisely what is driving the government to look forward and anticipate the need for exponential growth in the private sector.”

What do you believe are the key elements that make a business an attractive investment proposition? “There are two factors that are especially important. The first is innovation. Innovation is what is going to take an SME to the next level.

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IF WE LOOK AROUND THE WORLD AT THOSE NATIONS WHERE THE SME SPACE IS MOST DEVELOPED, WE SEE REPEATEDLY THAT A SUPPORTIVE GOVERNMENT IS THE CATALYST.

Vikram Shroff, Director, Regal Group, Dubai

It’s what distinguishes the best from the also-rans, and what really attracts not only investors, but - just DV VLJQLÂżFDQWO\ FXVWRPHUV (YHU\ 60( RZQHU RU 'LUHFWRU QHHGV WR ask whether their business offers a solution that is comprehensively different from that offered by DQ\RQH HOVH Âł7KH QH[W DVSHFW LV FDVKIORZ ,WÂśV the presence of strong cashflow that, perhaps more than anything else, will leverage a favourable decision IURP D ULVN SDUWQHU RU LQYHVWRU )RU example, banks used to be assetbased in terms of their lending criteria, but now they are very much FDVKIORZ IRFXVHG 7KH UHDOLW\ LV WKDW even if you have assets, they will have to be refinanced before they can help you meet your financial REOLJDWLRQV :KHUHDV ZLWK JRRG cashflow you can not only meet your current outgoings, but leverage VXEVWDQWLDO IXUWKHU ERUURZLQJV &DVKIORZ LV NLQJ ´

Do you see more SMEs looking to do business internationally, outside the region - or is the GCC still the primary focus?

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“The reality is that I don’t see the majority of businesses looking outside WKH *&& WKH 60( VHFWRU LV VWLOO YHU\ PXFK *&& IRFXVHG 7KLV PD\ FKDQJH LQ WLPH EXW QRW DW WKH SUHVHQW ´

Is there one particular style of business in the SME space that you see moving ahead of the rest? ³<HV GH¿QLWHO\ LQ WKH DUHD RI 6HUYLFHV WKHUHœV GUDPDWLF JURZWK KHUH ,W PD\ well be because in the developed, cosmopolitan hubs we live in, the pace of life is so fast and people need service SURYLGHUV WR VDYH WKHP WLPH /LIHVW\OH pressure is so intense, and a service business with a strong, innovative FRQFHSW FDQ DWWUDFW D ORW LI LQWHUHVW ´

Do you see increasing adoption of the principles of Corporate Governance/Best Practice among SMEs? ³7KH UHDOLW\ LV WKDW PDQ\ 60(V VLPSO\ don’t care about Governance and Best Practice issues - they’re too busy

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NO ONE KNOWS QATAR LIKE WE DO.

.......

Operating in Qatar since 1979 we’ve been helping businesses here grow for decades; delivering express solutions on-time, every-time. dhl.com.qa

ENTREPRENEURSHIP PROFILE

growing and getting on with their lives! But this is a short-termist view, because you can’t have all the exciting things, like Mergers & Acquisitions activity, growth of an international network, or eligibility for an IPO, without paying very good attention to the raft of ethical and compliance issues. The moral of the story is, if you don’t get your house in order now, you’re really limiting what you will be able to achieve later on.”

What led to your commitment to developing the Entrepreneurs’ Organisation (EO)? “An individual can shape the world - as we’ve seen so many times! Understanding what drives and characterizes the individual entrepreneur is a very important process that we can all benefit from, and I wanted people to be able to get closer to classic entrepreneurs from every walk of business life. The Entrepreneurs’ Organisation (EO) really facilitates that process. Yet it also plays another important role: no-one is an island, and the EO makes it easier for entrepreneurs to communicate with each other, crossfertilising their ideas and talents. Plus, it does so on an international basis, bringing in a very wide pool of leaders from across the globe.”

In your own business life, is there one decision that you’d like to reverse if you could? “I think we all have a regret of that kind, and for me it was that I got a bit too defensive in my business practices during the recession. I should have used the opportunity to get ahead of the competition a little more, but I held back. As the great industrialist Henry Ford said: “There’s no better time to make your money than when everyone else is losing theirs.”

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WITH GOOD CASHFLOW YOU CAN NOT ONLY MEET YOUR CURRENT OUTGOINGS, BUT LEVERAGE SUBSTANTIAL FURTHER BORROWINGS. CASHFLOW IS KING.

What do you see as some of the classic lessons that SME owners/ directors can learn from the CEOs that the EO represents? “You have to be prepared to learn from everybody - another peer can always teach you something new. Peer-topeer learning is very important and can save you a vast amount of time in terms of wrong directions and mistakes. No matter how successful you are, there is always something new to learn, and the EO gives you a better number of opportunities to do precisely that. If you feel that you already know everything there is to know about your business, you may be right, but on the other hand, you may learn something that completely transforms your ability to deliver growth and performance.”

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Talk it up... Exclusive insights from our expert round table p.18 Building a bridge to private enterprise p.22

ENTERPRISE www.privatesectorqatar.com/en

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ENTERPRISE

Talk it up...

EXCLUSIVE INSIGHTS FROM OUR EXPERT ROUND TABLE

What are the operational issues and the strategy agendas that are keeping the private sector world talking? This month’s round table discussion focuses on the future for private sector enterprise in the region. Associate Editor Victoria Connolly put together this ‘hard talk’ session. In what business sectors are we seeing the most advances made in private enterprise? 1.

What does the future hold for small and medium sized enterprises in the region? 2.

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WAEL SAWAN Managing Director and Chairman of Qatar Shell Companies It is very encouraging to see the increase in private sector enterprise in Qatar, both in the service sector and increasingly also in manufacturing. Each new Qatari entrepreneur serves as a powerful role model to his – and very often her – peers. Developing the private sector is a key element of the Qatar National Vision 2030 and at Qatar Shell we aim to play our part in at least two ways: firstly by inspiring school and university students to consider entrepreneurship as a career option

through the Enterprise Challenge Qatar that we run in partnership with Bedaya; and secondly by working with QDB to promote specific procurement opportunities for our Pearl Gas-to-Liquids plant to Qatar SMEs. A strong local private sector helps not only to diversify the country’s economy, but also to strengthen and shorten our supply chain. So with numerous benefits for the country, for large multinationals like us, for the Qatari business community and for individual entrepreneurs, I believe the growth of the SME sector in Qatar has very bright prospects indeed.

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ENTERPRISE

GAIL GOSSE Dean,  School  of  Business,  College  of  North  Atlantic  â€“  Qatar Carbon based commodities and government funded infrastructure projects continue to have a major impact on Qatar’s economy. Indicators are that this will not change for the foreseeable future. Sectors providing products and services, which are required to produce commercial and project goods and services, continue to advance. These include: construction and trading equipment, machinery, supplies, materials, recruitment of an international labor force (both skilled DQG XQVNLOOHG EDQNLQJ DQG ÂżQDQFH legal and accounting, and export and import (be it land, sea, or air). Growth of, and demand created by, the expatriate population surges. This in turn impacts GDP and per person disposable income which then advances sectors such as: commercial and residential real estate, and retail (food, home furnishings, automotive, clothing, entertainment, travel, etc.) This demographic change is also fuelling sector growth in healthcare and education.

As for the future, Qatar will continue to invest in infrastructure requirements to facilitate the shift from a carbonbased to a knowledge-based economy, per the 2030 vision. The recent launch RI WKH ¿EUH RSWLF QHWZRUN WKURXJK Ooredoo indicates attention to this. As these infrastructure requirements are continued, in order to support a knowledge-based economy, SME sectors will have an opportunity to grow in ¿HOGV UHODWHG WR WHFKQRORJ\ LQQRYDWLRQ and research in environmental sustainability, carbon footprint, energy (both carbon and alternatives); and communications (telecom, mobile, satellite, internet). A challenge to local SME’s vying to offer support to a knowledge-based economy will likely be from other well-established global players. In the future, as mega/ infrastructure projects wind down, SMEs might be wise to plan for a shift to new and emerging markets that address (a) continued fuelling for economic growth and government income, and (b) sustaining the infrastructure that will support the current population and retain the (skilled) workforce.

“Carbon based commodities and government funded infrastructure projects continue to have a major impact on Qatar’s economy. Indicators are that this will not change for the foreseeable future. Sectors providing products and services, which are required to produce commercial and project goods and services, continue to advance� www.privatesectorqatar.com/en

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ENTERPRISE

“The rapid and dynamic economic growth of this region is enormous, the availability of cash flow and the strong purchasing power of both businesses and consumers all help to pave the way for all private business sectors to evolve and triumph”

AMAL AL MANNAI Executive Director Social Development Center, Qatar Foundation The rapid and dynamic economic growth of this region is enormous, the DYDLODELOLW\ RI FDVK ÀRZ DQG WKH VWURQJ purchasing power of both businesses and consumers all help to pave the way for all private business sectors to evolve and triumph. The development of regional infrastructure and construction are the most dominant sectors currently, but these industries all need support from a network of service providers with the result being that the private sector in Qatar is expanding rapidly. There are two key ideas when thinking about the future of private business development in Qatar. We must ask ourselves always what suits the future of national economic growth and what is best for Qatar GDP now and in the future? The answer to this question will influence all national planning and the development of state policies and procedures, particularly when

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we consider supporting small and medium sized enterprises. The second point of interest for me is the encouragement of individual vision, interest and investment in the present and future economic structure of Qatar. The future of Qatar’s economic growth must rely on SMEs, as well as the gas and oil sectors and subsidiary macro economic industries. Qatar must look towards the success story of Japanese economic development where SMEs account for more than 90 per cent of successful enterprises. The power of SMEs lies with the availability of working capital both in banks and with individuals, this together with relatively low start up costs makes Qatar both a supportive and lucrative environment for private enterprise. In Qatar, the growth in SMEs is largely associated with three main factors, innovation, invention and technology. This is what the state considers most important and is FRQFHQWUDWLQJ RQ ZLWK D VLJQL¿FDQW investment in education, research and development and support.

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ENTERPRISE

KHALIFA SALEH AL HAROON Founder Iloveqatar.net, Board member Entrepreneurs organisation of Qatar It used to be that the world was excited at the thought of the American dream. It was about traveling to a country and being able to identify an opportunity with the hopes of being your own boss; living the life that you always wanted. I believe that today, people look to the region, and especially Qatar in hopes of achieving the Qatari dream. There’s a lot that hasn’t been done, and some would say that even if it has been done, it hasn’t been done right. Today we’re seeing Arab entrepreneurs emerging, locals partnering up with people from all over the world and a new mentality of creation and innovation rather than simply importing or opening up a franchise. It’s not easy in Qatar though. Having the passion and motivation is just one piece of the puzzle. What’s lacking are venture capital investors, physical

retail space, or even organisations willing to encourage risk taking with innovative projects. A successful economy relies on SMEs. SMEs help create jobs, encourage competition, and are drivers for improvement in terms of quality of products and services. However the barriers for entry could be considered to be quite high. Whether it’s the startup capital needed or even obtaining the necessary licences to begin trading. I’m from the school of thought that entrepreneurs who succeed are those with an edge. The will to SHUVHYHUH DQG µ¿QG D ZD\¶ QR PDWWHU what the obstacle. You could say that GLI¿FXOWLHV DUH DOVR D ¿OWUDWLRQ SURFHVV to weed out the weak. Those who push forward are those who love challenges, want to change the world, and hope for the best. The question is, what are you ready to put on the line, to make your dream come true?

90%

Percentage of successful businesses that are SMEs 78%

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US

EUROPE

JAPAN

72%

21

ENTERPRISE

THE IASP 2014 WORLD CONFERENCE, TO BE HOSTED BY QATAR SCIENCE AND TECHNOLOGY PARK, IS BUILDING A BRIDGE BETWEEN SCIENCE, TECHNOLOGY AND PRIVATE ENTERPRISE. ASSOCIATE EDITOR VICTORIA CONNOLLY REPORTS.

22

The worlds of science, technology and private enterprise will come together in October as The International Association of Science Parks and Areas of Innovation (IASP) prepare to hold their 31st annual world conference at Qatar National Convention Centre. Hosted by Qatar Science and Technology Park (QSTP) the conference entitled “Science parks: where technology goes to work” will cover three themes: 5ROH RI VFLHQFH DQG WHFKQRORJ\ SDUNV (STPs) as technology development catalysts. 0RGHOV RI FRRSHUDWLRQ EHWZHHQ universities and companies and the role that STPs can or should play. 673V DQG WKHLU UHVLGHQW FRPSDQLHV STPs are mainly oriented towards smaller businesses. What is the role of large corporations and multinationals in STPs? How can STPs establish stronger links with big corporations? With138 abstracts already submitted and with an anticipated 33 keynote speakers, the event that runs 19-22 October aims to bridge the gap between entrepreneurs, academia and industry. Founded in 1984, the mission

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ENTERPRISE

IASP 2014 WORLD CONFERENCE

138 ABSTRACTS ALREADY SUBMITTED

33 KEYNOTE

SPEAKERS

HOSTED BY QATAR SCIENCE AND TECHNOLOGY PARK, 19-22 OCTOBER 2014 of the IASP is to provide a global network for science parks and areas of innovation, and to drive growth, internationalisation and effectiveness for its members. Representing over 128,00 companies from 69 countries, the IASP - through a dynamic and innovative mix of policies, programmes, high quality facilities and value-added services - aims to VWLPXODWH DQG PDQDJH WKH ÀRZ RI knowledge and technology between universities and the private sector. One of the key objectives of the organisation (contained in its mission) is the facilitation of effective communication between companies, entrepreneurs and technicians in sectors as wide ranging as agriculture and forestry, civil and chemical and engineering, energy and ICT and communications. In Arab States in particular, effective development of science and technologybased enterprises is a vital element of creating economic opportunity and GLYHUVL¿FDWLRQ LQWR NQRZOHGJH VHFWRUV The United Nations Educational, 6FLHQWL¿F DQG &XOWXUDO 2UJDQLVDWLRQ¶V (UNESCO) Science Report 2010 found that linkages between academia and industry in Arab States were sometimes

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COVERS THREE THEMES: s 3403 !3 4%#(./,/'9 DEVELOPMENT CATALYSTS s 3403 !.$ 4(%)2 #25#)!, 2/,% ). UNIVERSITY/INDUSTRY COLLABORATION s 3403 !.$ 4(%)2 2%3)$%.4 #/-0!.)%3

23

ENTERPRISE

QATAR SCIENCE AND TECHNOLOGY PARK HAS BEEN INSTRUMENTAL IN THE BREAKING DOWN OF BARRIERS AND SUPPORTING THE SUCCESS OF ENTREPRENEURS OPERATING IN THE SCIENCE AND TECHNOLOGICAL SECTOR lacking and need to be strengthened. The report quoted Qatar as an example of an Arab State tackling the issue by setting up a science park and implementing a national research strategy. Great advances have been made more recently in the region and in Qatar, which has taken a leadership role with respect to science and technology research. Following the IASP Steering Committee’s visit to Doha, IASP Director General Luis Sanz said, “The increasing number of science parks and areas of innovation throughout the world proves that they are powerful tools for economic development and the enhancement of the knowledge economy. The FRQIHUHQFH LQ 'RKD ZLOO EH WKH ÂżUVW IASP World Conference in that region. Doha and Qatar Science & Technology Park will provide a perfect environment and platform for an international event of such importance.â€? Located on the north campus of 4DWDU )RXQGDWLRQÂśV Ă€DJVKLS SURMHFW Education City, Qatar Science and Technology Park has been instrumental in the breaking down of barriers and supporting the success of entrepreneurs operating in the science and technological sector. Speaking at a global gathering of science parks, entrepreneurs and policy makers in Recife, Brazil in October 2013, head of the IASP 2014 Organising Committee and QSTP Managing Director, Hamad

24

Al-Kuwari, expressed a passionate eagerness to share Qatar’s vision with IASP delegates and underscored the increasingly important role played by science and technology parks in nurturing viable, home-grown technology businesses. “Our role is to act as a bridge between academia and industry. Science and technology parks provide a unique space where technology can go to work with academia, industry and policymakers - seated at the same table. The result is an environment that is capable of eventually commercialising technology for the marketplace, for individuals and for organisations.â€? With Qatar, Oman, Saudi Arabia and Kuwait topping the list of countries contributing abstracts ahead of the event in October, it would seem that that 31st IASP World Conference will QRW RQO\ EH WKH ÂżUVW PDMRU ,$63 HYHQW hosted in the region but will also provide a forum for some of the most LQQRYDWLYH DQG FUHDWLYH VFLHQWLÂżF DQG business brains to come together and share ideas and best practice. Âł2XU FKDOOHQJH LV QRW MXVW WR NHHS pace with the world’s most empowered generation of innovators, but to support and empower them further,â€? said Al-Kuwari. “To do this, we must be the bridge between academia and industry – the space where technology goes to work to be commercialised for the marketplace, for individuals and for organisations.â€?

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Entrepreneurship education p.26

BUSINESS EDUCATION www.privatesectorqatar.com/en

25

BUSINESS EDUCATION

ENTREPRENEURSHIP

EDUCATION SUPPORTING THE YOUNG BUSINESS MEN AND WOMEN OF QATAR IN THEIR BID TO ENTER THE BRAVE NEW WORLD OF PRIVATE ENTERPRISE… ASSOCIATE EDITOR VICTORIA CONNOLLY OFFERS A DETAILED VIEW.

26

Entrepreneurship has emerged over the last two decades as arguably the most powerful economic force the world has experienced since the industrial revolution. That expansion has brought with it a similar increase in the field of entrepreneurship education. The recent growth and development in the curricula and programmes devoted WR HQWUHSUHQHXUVKLS DQG QHZ YHQWXUH creation have been extraordinary. The number of colleges and universities worldwide that offer courses related to entrepreneurship has grown from a handful in the 1970s to thousands at the turn of the 21st century. In the midst of this huge expansion remains the challenge of academic legitimacy for entrepreneurship. While it can be argued that some validity has been attained in the current state of

entrepreneurship education, the worlds of business academia and the young dynamic entrepreneur have at times seemed disconnected. Is it a case of ‘can’t live with each other can’t live without each other’, or does each discipline have what the other one desperately needs for success in the postmodern business world?Fostering entrepreneurial awareness and positive attitudes towards entrepreneurship are high on the policy agenda of many economies worldwide and Qatar is no exception. As part of the Qatar National Vision 2030 strategic plan, the Qatar government has outlined its plan IRU D GLYHUVL¿HG HFRQRP\ WKDW gradually reduces its dependence on hydrocarbon industries, enhances the role of the private sector and maintains its competitiveness

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BUSINESS EDUCATION

THE NUMBER OF COLLEGES AND UNIVERSITIES WORLDWIDE THAT OFFER COURSES RELATED TO ENTREPRENEURSHIP HAS GROWN FROM A HANDFUL IN THE 1970S TO THOUSANDS AT THE TURN OF THE 21ST CENTURY

through a knowledge-based economy characterised by innovation; entrepreneurship; excellence in education; a world-class infrastructural EDFNERQH WKH HI¿FLHQW GHOLYHU\ RI public services; and transparent and accountable government. The role of entrepreneurship in a changing employment landscape Innovation and technological progress has always cost people their jobs. Over the past 30 years the digital revolution has banished many of the mid-skill jobs that underpinned 20thcentury middle-class life. Typists, ticket agents, bank tellers and many production-line jobs have over time been phased out as digital alternatives to human input have been viewed as a more profitable alternative. Employment is the driving force for economic growth: as employers seek

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staff with the skills and ability that enables them to successfully interact in this new business environment, new career paths and career choices are emerging. The main way in which governments can help their people gain the skills needed to successfully enter the employment market is through education systems. One of the reasons for the improvement in workers’ fortunes in the latter part of the Industrial Revolution was because schools were built to educate them, a dramatic change at the time. Now those schools themselves need to be reformed, to foster the creativity that humans will need to set them apart from computers. There should be less rote-learning and more critical thinking. Governments and educational institutions are keen to fund, support

and promote entrepreneurship as a viable entry into the employment market. Entrepreneurship is a way of thinking, an approach toward discovering and pursuing opportunities and solving problems. It emphasises the willingness to take risks and imagine all possibilities in the face of uncertainty, committing oneself to putting valuable ideas into practice and finding a broader meaning in one’s ideas and actions. What do the educators themselves say? Entrepreneurship Centre at College of the North Atlantic Qatar. The Entrepreneurship Centre at CNA-Q was established in 2010 to encourage, support and develop the current and future entrepreneurs of Qatar. In support of Qatar’s 2030 Vision, the Centre is committed to raising awareness and

27

BUSINESS EDUCATION

THE MAIN WAY IN WHICH GOVERNMENTS CAN HELP THEIR PEOPLE GAIN THE SKILLS NEEDED TO SUCCESSFULLY ENTER THE EMPLOYMENT MARKET IS THROUGH EDUCATION SYSTEMS

GROWTH OF MANAGEMENT COURSES IN THE GCC

2,700

400

75

8

1970

participation in entrepreneurship by assisting citizens in developing small and medium sized enterprises. “At the College of the North Atlantic – Qatar we have integrated three entrepreneurial courses into our School of Business Studies 'LSORPD DQG &HUWLÂżFDWH SURJUDPPHV All business students are required WR WDNH WKH ÂżUVW \HDU FRXUVH DQG students taking the three-year programme are required to take the other two courses. Certainly we’ve seen a steady increase in student involvement with extracurricular ‘entrepreneurial’ activities; Innovation &RPSHWLWLRQ (QWUHSUHQHXULDO 6SLULW &OXE &DVH &RPSHWLWLRQ DQG a host of events outside CNAQ. Offering entrepreneurship training and mentoring to full and parttime CNA-Q students as well as the broader community; the Centre hosts informative networking events for entrepreneurs and has a comprehensive library of resources for budding business men and women to access.â€? Peter  J  Moore,  Entrepreneurial  Mentor. “Some may say there is a large disconnect between the academic

28

1980

1990

2014

community and the needs of HQWUHSUHQHXUV ´ 6D\V 3HWHU ÂłWKLV is mainly due to entrepreneurs knowing a large percentage of academics never would accept the risks of pursuing an entrepreneurial ‘career’. Yet the truth is entrepreneurs don’t start businesses just to be businesspeople. Initially the motivation behind starting a business probably had to do with developing their skills or abilities into marketable products or services. 2U WKH\ KDG LGHQWLILHG ÂľJDSVÂś DQG opportunities in the marketplace and worked to develop their value propositions into viable businesses.â€? (QWUHSUHQHXUVKLS FRQFHSWV and education are not necessarily replacing traditional academic SDWKZD\V KRZHYHU LW LV PRUH OLNHO\ that entrepreneurship content is becoming fully integrated into the main stream curriculum. It has relevance whether a student pursues D FDUHHU LQ HQJLQHHULQJ VFLHQFH DUWV KHDOWK DUFKLWHFWXUH EXVLQHVV or government. When it comes to VXFFHHGLQJ LQ D FRPSOH[ ZRUOG entrepreneurial thinking skills may be as important and basic a requirement as reading and writing.

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Exporting Your next step to growth p.30 Brick by brick Building Qatar’s infrastructure p.34

ANALYSIS www.privatesectorqatar.com/en

29

ANALYSIS

EXPORTING YOUR NEXT STEP TO GROWTH

In this era of globalisation, national borders are fast disappearing with trade being the engine for growth. One crucial aspect of trade is the exporting of goods and services.

Aparna Shivpuri Arya is a Senior Correspondent for Private Sector Qatar Magazine. In the following two features, this expert economist offers a detailed analysis on key topics. 30

In simple terms, export means selling goods and services across national border. But, why do companies take to exporting? One obvious answer that stands out is – growth. Exports can and are used as a growth strategy by many firms to expand their scope from domestic to foreign markets. According to Barringer & Greening, (1998), international expansion is an especially important decision for small and mediumsized enterprises (SMEs) who traditionally have a small financial base, a domestic focus and a limited geographic scope. Why  export? Exporting can be a profitable way of expanding your business, spreading your risks and reducing your dependence on the local market. Austrade research shows that, on average, exporting companies are more profitable than their nonexporting counterparts. The report further elaborates that by going overseas, a firm can

become more efficient and increase productivity. Exporting companies have better growth prospects, highly skilled and productive staff and tend to adapt technology and best practice techniques faster. By selling into another market, whether directly or through agents, a firm can add consumers, which can lead to higher sales volume. This in turn could lead to an expansion in the production capacity. Export is quite popular with SMEs, as a means of expansion. Compared to FDI, exporting is a relatively easy and fast way to enter foreign markets with low commitment and low risk. In exporting, an SME does not have to make substantial resource commitments to a foreign market as it would if it made a foreign investment. Third, exporting is an easy way of entering a new market, in comparison to setting up a foreign subsidiary. It is also a faster way, since the SME can use its existing production facilities to cater to a new market. It can also withdraw at any time if the importing

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ANALYSIS

EXPORT IS QUITE POPULAR WITH SMES, AS A MEANS OF EXPANSION. COMPARED TO FDI, EXPORTING IS A RELATIVELY EASY AND FAST WAY TO ENTER FOREIGN MARKETS WITH LOW COMMITMENT AND LOW RISK

country becomes economically or politically unstable. Thus, exporting can give companies access to new markets, new revenue streams and the option to spread their risks. It is also possible that because of exporting, a business can become agile and responsive. More so it can also lead to economies of scale for the company, with the cost of production going down. To begin with, it might help to brainstorm about the tradeoffs related with expanding internationally. While on one hand it might reduce your dependence on the domestic market, but it might need additional staff and funding. According to Tasdeer, the export promotion arm of Qatar Development Bank, exporting offers a number of advantages to a firm. First, it leads to an increases in sales and profits. Second, could increase a company’s share in global market, at the same time reducing the dependence on the domestic market.

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Third, by tapping global markets, firms are no longer held captive to economic changes, varying consumer demands and seasonal fluctuations. Fourth, exporting enhances a firm’s competitive advantage, with exposure to new technologies, methods and processes. In Qatar’s case, this would be most beneficial. With a population of just 1.9 million, there is a need for Qatari companies to explore other markets. Direct advantages: 2SSRUWXQLW\ WR H[SDQG PDUNHW VKDUH ,QFUHDVH SURGXFWLRQ LI XQGHUXWLOLVHG in the domestic market 'HFUHDVH GHSHQGHQFH RQ GRPHVWLF market /HDG WR LQQRYDWLRQ DQG technological advancement How to export? There are two methods that a company can use, when it comes to exporting: 1. Indirect exporting – this method involves using intermediaries. The types

of indirect exporting methods are: )LOOLQJ RUGHUV IURP GRPHVWLF buyers, who then export the product ([SRUWLQJ WKURXJK DQ H[SRUW management company )UDQFKLVLQJ :KROHVDOH FRPSDQ\ The advantage of this process is that it leads to faster market access, DQG D OHVVHU ¿QDQFLDO FRPPLWPHQW than setting up a branch. But at the same time, the company has little control over the distribution, sales and marketing and a wrong choice of market or distributor can lead to problems. 2. Direct exporting – this method involves setting up an office or branch in the concerned market. This method has the advantage of giving more control to the domestic company over distribution, marketing and sales, though it can lead to higher start-up costs and make the company more vulnerable to market fluctuations.

31

ANALYSIS

WHILE EXPORTING SMES FACE THE RISK OF SALES NOT MEETING THE PROJECTIONS, FACING GREATER COMPETITION THAN ANTICIPATED, SLOW RECOVERY OF PAYMENTS, REPATRIATION OF PROFITS, FLUCTUATIONS IN EXCHANGE RATES AND CONTRACTUAL ISSUES.

STEPS TO EXPORTING

Analyse Market Opportunity

Evaluate Control Operations

Implement Marketing Strategy

Access Product Potential

Continuous Integration and Reassessment of Steps

Organise Operational Team

Challenges Before a company makes a decision to export, it needs to make sure that it has researched the market thoroughly and has chosen a business model that will work best. It is also essential to understand the legal and tax structure of the market for foreign businesses. Many SMEs enter a new market without proper background research on these issues, which increases their chances of failure. It is also imperative for the SME to understand the competitors in the market. Sometimes an SME doesn’t have the tools to study the payment mechanisms, the prices being charged, quality and so forth. While exporting SMEs face the risk of sales not meeting the projections, facing greater competition than anticipated, slow recovery of payments, repatriation of SUR¿WV ÀXFWXDWLRQV LQ H[FKDQJH UDWHV and contractual issues. Research done by various

32

Establish Market Entry Mode

Make a Firm Commitment

Allocate Necessary Resources

Develop Strategic Marketing Plan

Identify Technical Issues

organisations show that there is a clear split between those companies that study a market and make an informed decision to go through a formal channel and those that go in without any background work. In this instance, talking to Tasdeer or QDB, understanding the strategies and getting the support of a professional organisation. On the other hand, there are companies that are reactive and just get into a market accidentally, without any proper research/study into the market dynamics. To conclude, there is no denying that exports is one of the most promising growth strategy for companies, especially SMEs. It does come with its set of risks but handled in the proper way, with research and support of a professional RUJDQLVDWLRQ LW FDQ EHQHÂżW D FRPSDQ\ immensely. For a small country, like Qatar, exports is the natural next step for SMEs to grow in revenue and size and achieve economies of scale.

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Carnegie Mellon. :H FUHDWHG WKH ÛUVW ,QWHUQHW VHDUFK HQJLQH :H KHOSHG GHYHORS DUWLÛFLDO LQWHOOLJHQFH :H UHYROXWLRQL]HG EXVLQHVV HGXFDWLRQ We led the convergence of information technology and biology.

$QG WKDWpV MXVW RXU ÛUVW century.

Biological Sciences | Business Administration | Computational Biology | Computer Science | Information Systems

www.qatar.cmu.edu (UKYL^ *HYULNPL -V\UKLY

ANALYSIS

BRICK BY BRICK BUILDING QATAR’S INFRASTRUCTURE Anyone who has been to Doha lately will tell you that the city resembles a large construction site, with buildings, roads and bridges being constructed or re-designed everywhere. We take a look at this dynamic sector, the upcoming projects and the challenges that this construction boom might lead to. With the preparations for the FIFA World Cup 2020 going on in full swing, the construction sector has been witnessing a lot of activity. This coupled with the government’s vision to promote tourism has lead to a growth of hotels and transport infrastructure. As we all may know, Qatar’s projects market saw a growth of 26 per cent, with the projects awarded increasing by 21 per cent between 2012 and 2013. According to MEED, from 20082013, Qatar’s project market accounted for 12 per cent (USD 96 billion) of the total projects awarded in the GCC. The table below shows us the share of the various sectors in Qatar’s GDP in 2013 and 2014 (projection). As we can see from the figure above, the share of the construction sector increased by a few percentage point while the share of the

34

hydrocarbon sector in the GDP has gone down. This comes as no surprise since in anticipation of the FIFA World Cup 2022, Qatar plans to invest USD 140 billion in the next five years to build Qatar’s transportation system. Major investments are being planned in constructing roads, bridges, a rail line and a metro system to support the influx of tourists during the World Cup. Attention is also being given to building affordable housing in the run up to the event. Qatar’s population has been growing a fast rate and currently the housing facilities are scarce. The table highlights some of the major upcoming and ongoing projects and their value. A look at these projects highlights the investment opportunities that exist for, both, foreign and domestic investors.

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ANALYSIS

QATAR’S PROJECTS MARKET HAVING SIGNIFICANT ACTIVITY IN 2014 WITH INFRASTRUCTURE AND TRANSPORT CONTRACT AWARDS EXPECTED TO PEAK AT USD 24 BILLION

Source: Various

Selected upcoming projects Sharq Crossing – Doha Bay Crossing

5 billion

2021

Qatar Bahrain Causeway

2.3 billion

2021

Umm Slal Stadaium

4 -5 billion

Approx. 2020

The Amphibious 1000

500 million

Not announced.

Al Khor Stadium

255 million

Approx. 2020

Al Rayyan Stadium

135 million

Approx. 2020

Al Shamal Stadium

251 million

Approx. 2020

Al Wakrah Stadium

286 million

Approx. 2020

Doha Metro Project

41 billion

2016

Education City Stadium

287 million

Approx. 2020

Doha Port Stadium

202 million

Approx. 2020

Lusail Iconic Stadium

662 million

Approx. 2020

Lusail City

USD 45 billion

2020

New Doha Port

USD 7.4 billion

2016 for the first phase.

Mshreib

USD 6.7 billion

2016

Doha Festival City

USD 1.6 billion

2016

Share in GDP in 2013 and 2014 (%) Services

Construction

Other industries (manufacturing, utilities)

Hydrocarbons

2013

2014 100

80

60

Source: Qatar Economic Outlook 2013-14

40

20

0 Real GDP

Nominal GDP

Real GDP

Nominal GDP

Note: Shares do not sum to 100% as agriculture and indirect taxes are too small to show

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The Sharq crossing project will include three bridges spanning between 600 metres and 1,310 metres, which will link Doha’s new Hamad International airport with the city’s cultural district of Katara and the central business area of West Bay. Another important project is the Doha Metro.It has been highlighted that the project will start in 2015 and be completed by 2021. The government awarded contracts worth USD 8.2 billion in June 2013 to international and local contractors for the construction of phase 1 of the project. According to various reports, Qatar’s SURMHFWV PDUNHW KDYLQJ VLJQL¿FDQW DFWLYLW\ in 2014 with infrastructure and transport contract awards expected to peak at USD 24 billion. Doha alone has a considerable backlog of work to execute between 2014 and 2019, with associated contractor and third party opportunities valued at USD 90 billion, including USD 40 billion worth of roads, ports and rail work as well as USD19 billion construction projects. This list would be incomplete if I didn’t mention Qatar Rail. The project was started in 2011 and aims to cover 750 km of track. The Doha Metro project will be conducted over two stages: the ¿UVW VFKHGXOHG WR EH FRPSOHWHG LQ entails the setting up of 37 stations. The project’s second phase, extending to 152 km in total length (47 km underground, 76 km above ground level, and 29 km at ground level) and encompassing nearly 56 stations, will be delivered by 2026. A report by Qatar Development Bank 4'% ZKLFK ¿QDQFHV 60(V WR KHOS ERRVW 4DWDUœV HFRQRPLF GLYHUVL¿FDWLRQ effort, suggested that one of the avenues of business is to provide prefabricated tunnel linings for the 80-km long metro

35

ANALYSIS

ACCORDING TO THE EXPERTS IN THE INDUSTRY THERE IS A NEED TO STREAMLINE THE SUPPLY CHAIN AND ENCOURAGE LOCAL PROVIDERS AND INTERNATIONAL BUSINESSES TO WORK TOGETHER

Global competitiveness - The most problematic factors for doing business Government instability / coups Tax rates Crime and theft Poor public health Foreign currency regulatoin Tax regulations Corruption Policy instability Insufficient capacity to innovate Poor work ethic in national labor force Inefficient government bureaucracy Inadequate supply of infrastructure Inadequately educated workforce Restrictive labor regulations Inflation Access to financing

Source: Deloitte GCC Powers of Construction 2013

0 5 % responses

tunnels. According to local media reports, the supply of tunnel linings would involve contracts worth USD 110 mn (QR 400 mn) . Another key area of business includes the lease of heavy machinery and construction equipment such as cranes, bulldozers, excavators, and trucks. The lease opportunities would likely be worth USD 550 mn. In addition, earthwork services would involve contracts worth a staggering USD 970 mn. Other opportunities include building rail stations and project management, including maintenance of the rail tunnels. QDB said these are some of the key opportunities local businesses and HQWUHSUHQHXUV FDQ VHL]H IRU WKH EHQH¿W of the national economy. Besides this, the Qatar Tourism Authority plans to invest close to USD 20 billion on infrastructure, since the number of tourists is projected to reach 3.7 million by 2022. Another aspect of tourism, which is being developed in Qatar is medical tourism. Hamad Medical City, which is set for completion in 2018, will be the largest medical facility, not only in the region, but also the world.

36

10

15

20

25

Challenges The road to growth is never easy and the story is no different in Qatar. There are numerous challenges in terms of competition for material and labour. Also LQÀDWLRQ LV D FDXVH RI FRQFHUQ $FFRUGLQJ a report by EC Harris, Qatar must take DFWLRQ WR DYRLG FRQVWUXFWLRQ LQÀDWLRQ LQ the country from reaching a whopping 18 per cent a year from 2016 to 2019, The demand for materials is increasing steadily leading to an increase in price. This could lead to a delay in projects. There is also the issue of meeting the increasing demand for water and electricity for all these projects which will be ongoing at the same time. According to the experts in the industry there is a need to streamline the supply chain and encourage local providers and international businesses to work together. There also needs to be more transparency in the procurement process. To conclude, in the next three years, Qatar will witness an exponential increase in construction activity. While this offers businesses, both foreign and local, tremendous investment opportunities, what needs to be seen is whether Qatar can meet up with the challenge of maintaining a steady supply chain of raw PDWHULDO DQG NHHS LQÀDWLRQ LQ FKHFN

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A time of opportunity p.38

BUSINESS OPPORTUNITY www.privatesectorqatar.com/en

37

BUSINESS OPPORTUNITY

A TIME OF OPPORTUNITY 38

On what was set to be a landmark day for the private sector, Qatar Development Bank (QDB) and Qatar Shell hosted a keynote event dedicated to seven important tenders - the SME Business Opportunity Workshop. Attracting 150 private sector representatives, the event - which was a resounding success - was part of an ongoing commitment by QDB and Qatar Shell to develop local SMEs in support of the State of Qatar’s keynote private sector initiative‌

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BUSINESS OPPORTUNITY

The day’s agenda offered individual sessions on each of the key tendering opportunities, which were: Business Opportunity 1 - Large open head steel drums - manufacturing Business Opportunity 2 - ATEX two-way radios - maintenance, repair, Ă€i‡ViĂ€ĂŒÂˆwV>ĂŒÂˆÂœÂ˜ Business Opportunity 3 - Low voltage cables - manufacturing Business Opportunity 4 ‡ Ă•ĂƒĂŒÂœ`Ăž yÂœĂœ “iĂŒiĂ€ ‡ ĂƒiĂ€Ă›ÂˆViĂƒ Business Opportunity 5 - Diesel generator sets – maintenance Business Opportunity 6 - Welding Inspectors - on site technical support Business Opportunity 7 - Electrical cable trays – manufacturing In 2010, the UK’s Federation of Small Businesses - with 220,000 active members, the largest private sector association in the world - polled small and medium enterprises in order to discover their views on what, for them, would be the most productive DQG EHQHÂżFLDO EXVLQHVV UHODWLRQVKLS By far the largest majority (38 per cent of members) took the view that ‘a relationship with a large public sector entity, involving an ongoing commercial return’ would be their SUHIHUUHG FKRLFH 7KLV LV SUHFLVHO\ ZK\ the event organized by QDB and Qatar Shell on April 16 was so important: it presented private sector entities with seven key tendering opportunities, with a view to becoming a supplier of choice IRU WKH 3HDUO *7/ SODQW WKH ZRUOGÂśV

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ODUJHVW *DV WR /LTXLGV IDFLOLW\ 7KLV UHSUHVHQWV DQ RXWVWDQGLQJ opportunity with the power to supercharge the growth potential and ¿QDQFLDO VHFXULW\ RI WKH VXFFHVVIXO applicants - and it comes at a time when the private sector is starting WR SOD\ D VLJQL¿FDQWO\ JUHDWHU UROH LQ WKH QDWLRQœV HFRQRP\ )RU H[DPSOH while growth in GDP was down to SHU FHQW LQ ¿JXUHV IURP WKH International Monetary Fund (IMF) showed that contribution from the private sector in the nation’s powerful H[SRUWV GULYH ZDV XS E\ SHU FHQW With the empowerment of the private sector being a key part of both the Qatar National Development Strategy and the Qatar National Vision 2030, occasions like the SME Business

Opportunity Workshop are especially attractive - and not purely because RI WKH FRPPHUFLDO UHWXUQV LQYROYHG Rather, successful applicants will benefit from an ’incubation’ period, in which Qatar Shell provides mentoring across key areas of business operations, including advice on increasingly important topics such as Corporate Governance, Best Practice and active approaches to ULVN PDQDJHPHQW In  the  public  eye 7DNLQJ SODFH DW WKH 6KDUT 9LOODJH & Spa, more than 150 SMEs and entrepreneurs attended the joint ZRUNVKRS D WHUULÂżF WXUQRXW KRQRXULQJ the second occasion on which Shell had released valuable tenders of

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BUSINESS OPPORTUNITY

attention, with highly-publicised comments from a number of eminent VIP guests from Government, QDB, Qatar Shell and key stakeholders from the private sector community. Abdulaziz Al Khalifa, Chief Executive 2IÂżFHU RI 4'% VDLG Âł,W LV WKURXJK this joint initiative that we recognise the pivotal role that local SMEs play in supporting Qatar’s economy. We have therefore joined hands with Qatar Shell to support local SMEs and entrepreneurs in order to promote WKH JURZWK DQG GLYHUVLÂżFDWLRQ RI Qatar’s private sector. Through this partnership QDB supports the accelerated development of Qatar’s private sector by broadening the horizons of local enterprises. Today, we are offering local SMEs valuable opportunities to tender for.â€? Following his own keynote address to the event, delegates heard detailed presentations from Wael Sawan, Managing Director and Chairman, Qatar Shell Companies; Amna Jassim Sultan, Business Counselor, QDB; and Nick Van Keulen, Contracts Procurement Manager, Qatar Shell. Attendees were briefed by Qatar Shell experts on the scope of works to be considered, the technical benchmarking aspects, and the timelines that the tendering applications, tender awards DQG VXEVHTXHQW ZRUNĂ€RZ ZRXOG EH GXH to follow. SMEs were also briefed on WKH PDQDJHPHQW DGYLVRU\ DQG ÂżQDQFLDO support role of QDB. The SMEs which will be awarded with the new business contracts will be announced at an award ceremony at the end of this year. Commenting on what proved to be a vibrant and informative occasion, Wael Sawan, Managing Director and Chairman of Qatar Shell companies, VDLG Âł7KLV \HDU ZH DUH UHYHDOLQJ VHYHQ QHZ VSHFLÂżF EXVLQHVV RSSRUWXQLWLHV within the Pearl GTL plant to local SMEs. We are very happy to continue to join hands with QDB, to award local businesses with new contracts that will enable them to develop worldclass standards and compete on a level SOD\LQJ ÂżHOG JOREDOO\ ´

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Exclusive  insights Private Sector Qatar magazine secured the following two exclusive interviews with VIPs participating in the SME Business Opportunity Workshop.  Wael  Sawan,  Managing  Director  and  Chairman,  Qatar  Shell  Companies

How do you see the current role of the SME in the Qatari economy? Âł,Q VXSSRUW RI RXU YDOXHG SDUWQHU QP and in close collaboration with QDB, we are committed to the Qatar 1DWLRQDO 9LVLRQ E\ GHYHORSLQJ local content and SMEs. We believe that SMEs are the cornerstone for achieving a sustainable economy in Qatar and a key to facilitating a WKULYLQJ SULYDWH VHFWRU DQG GLYHUVLÂżHG economy. At Qatar Shell, we have FRQÂżGHQFH LQ WKH TXDOLW\ DQG capabilities of local suppliers and trust in their ability to add value to our operations in Qatar.

What were the tender categories awarded last year? Âł:H DZDUGHG WKUHH FRQWUDFWV ODVW \HDU WKH FRQWUDFW IRU WKH manufacturing of personal protective equipment, the heat exchanger retubing contract, and the translation services contract.

What is the value of the projects that you have announced the tenders for today? ³7KH YDOXH RI WKHVH SURMHFWV LV PLOOLRQ 4DWDUL UL\DOV RYHU WKHLU year lifetime.�

Were all of last year’s tenders converted into operational projects? Considering these opportunities were awarded at the end of last year, we are proud of the progress our contractors are making. It should be noted that the awarded local companies are given 12 to 18 months, if needed, to build their capacity to handle the contracts. Here is a quick update on each EXVLQHVV RSSRUWXQLW\ ‡ 7KH FRPSDQ\ WKDW LV ZRUNLQJ RQ manufacturing Personal Protective Equipment (PPE) is progressing very ZHOO DQG ZH ZLOO UHFHLYH WKH ¿UVW RUGHU (batch) of PPEs this month (April). ‡ 7KH 7UDQVODWLRQ 6HUYLFHV FRQWUDFW LV already up-and-running and we are delighted with the quality of the services provided to us. ‡ 7KH FRPSDQ\ WKDW ZDV DZDUGHG WKH Heat Exchanger Re-Tubing contract received Qatar Shell’s full support to build their capacity to handle the contract, and by 1st of June they will be able to cater to our standards. We, WKHUHIRUH DUH FRQ¿GHQW WKDW WKH\ DUH doing well and are ahead of schedule. ³:HœUH UHDOO\ WU\LQJ WR PDNH VXUH WKDW we don’t broaden the opportunities beyond the SME target sector that we are really focused on. Therefore, this year, we have agreed with our partner QDB clear criteria for SMEs; to be at OHDVW 4DWDUL RZQHG ZLWK RI¿FHV LQ Qatar and with an annual turnover of OHVV WKDQ 0LOOLRQ 45 7KH PDMRU GULYH RI RXU LQLWLDWLYH KHUH LV GH¿QLWHO\ WKH 4DWDU 9LVLRQ DQG ZKDW ZH FDQ do to support it. But, there is also the recognition globally at Shell that having a local supply chain is much more effective than having an international one. Partly because you have access at the source, so if there is a problem you only have to go locally to work alongside each other to resolve it. With an international supply chain, there is always a requirement to FRPSURPLVH DW RQH OHYHO RU DQRWKHU there may be a different holiday there,

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BUSINESS OPPORTUNITY

Do you see your role with local businesses as helping develop the Qatari economy? “Absolutely. I feel this is true in a number of different ways. For example, we’ve been able to work with businesses who have brought important new skillsets to the corporate mix, enforcing new benchmarks in areas like safety and risk management, as well as important technical areas that have been central to the growth of the Gas to Liquids sector. And, we also feel we have a duty beyond simply doing our business to really share our knowledge and technical knowhow to help Qatar achieve its own ambitions.” or there might be delay in the shipment so there is a risk element. Knowing that we have the full security of being in the same country as the supply base gives us reassurance. When you need things, Murphy’s Law dictates that you need them yesterday. You need quick access.

How do your own staff view Shell’s support for SMEs? “I think there is a huge amount of satisfaction on this point. Part of our value proposition to some of our own staff is that we actually take this seriously and invest in the time, energy and effort to support the SME sector. Of course many individuals may have family and friends that get encouraged in this way to embrace entrepreneurship.”

Tell us how you see your role as a world-class entity in setting benchmarks and ‘raising the bar’ for the private sector? “It’s a two-way process. Firstly, we will QRW GURS RXU PLQLPXP TXDOL¿FDWLRQV These are the basic quality benchmarks

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that are so crucial. Yet, there is another dimension too. This is also about being open minded and giving time to support people that seem to have all the right ingredients but not the opportunity. You give those people the opportunity to become world-class, not only in the way they think about the project, but in the way they execute it. “One of my personal criteria for success is that we create entities WKDW KDYH WKH FRQ¿GHQFH QRW RQO\ WR compete locally, but also regionally, and - potentially - globally. To see that evolutionary process is something very rewarding indeed.”

Do you believe that the successful applicants will go on to serve Shell in other markets? “I very much hope so. This is something we have seen in some of our other operations globally. Admittedly, we have had a lot longer to work with these companies but we see them now as international players. And of course having the Shell brand as a customer for a number of years, supports them in developing their credentials in being able to compete with other companies in their sector.”

Nick Van Keulen, Head of Contracts and Procurement, Qatar Shell

What do you see as the primary role of this tendering process? ³7KH ¿UVW WKLQJ , VKRXOG VD\ LV WKDW WKLV is not a numbers game, not only about prices and costs - this is about localizing your supply chain. We have a large manufacturing facility and if we make ourselves completely dependent on companies outside of Qatar, if we have a SUREOHP KRZ DUH ZH JRLQJ WR ¿[ LW" <RX can make a phone call to Europe and the US but before you know it, you’ve waited a week for a part to be shipped here. If you’ve got someone around the corner you can pick up the phone, go to them DQG \RX FDQ ¿[ LW ,W PDNHV D ORW RI VHQVH “Let me give you an example. We were buying chemicals from outside Qatar and the supply chain was challenging. We started talking to suppliers in Qatar and found out they did not manufacture WR WKH VSHFL¿FDWLRQV WKDW ZH ZDQWHG From there we worked closely with the local supplier to provide us with the technical requirement - and now most of

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BUSINESS OPPORTUNITY

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How about your technical requirements and quality standards?

How does a commitment from you help SMEs develop?

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³:H JHQHUDOO\ ORRN IRU PDLQWHQDQFH FRQWUDFWV WR ODVW RQ DYHUDJH WKUHH WR ¿YH \HDUV GHSHQGLQJ RQ SHUIRUPDQFH ,I \RX ZDQW WR EULQJ YHQGRUV XS WR VWDQGDUG LW¶V RIWHQ D FKLFNHQ DQG HJJ VFHQDULR )RU H[DPSOH WUDGLWLRQDOO\ LQ WKLV LQGXVWU\ ZH DVN \RX WHOO XV ZKDW \RX KDYH DQG ZH¶OO WHOO \RX ZKHWKHU ZH FDQ XVH LW 7KH YHQGRU ZRXOG WKHQ VD\ ³2. , FDQ JLYH \RX ZDQW EXW \RX¶OO KDYH WR JLYH PH D FRQWUDFW IRU LW ´ ³<RX QHHG WR KDYH D GLVFXVVLRQ WKDW VD\V ³LI \RX JLYH XV ZKDW ZH ZDQW WKHQ ZH¶OO JLYH \RX WKH EXVLQHVV DQG \RX FDQ MXVWLI\ WKH LQYHVWPHQW :H ZLOO DOVR DJUHH D IHZ PLOHVWRQHV ZLWK \RX )RU H[DPSOH LI LQ RQH RU WZR \HDUV \RX FDQ PHHW WKH VSHF WKHQ ZH ZLOO JLYH \RX RXU EXVLQHVV %DVHG RQ WKDW WKH 60( FDQ JR WR WKH EDQN DQG JHW ¿QDQFLQJ 7KURXJK 4'% \RX FDQ JHW DQ LQLWLDWLYH VWDUWHG DQG WKDW ZD\ VRPHRQH FDQ VD\ ³, NQRZ WKH UHYHQXH ,¶P JRLQJ WR JHW DQG , FDQ PRYH IRUZDUG RQ WKRVH SURMHFWLRQV ´ ³2I FRXUVH ZKLOH 4'% LV GHYHORSLQJ DQG LQFXEDWLQJ 60(V WKH\ QHHG WR KDYH UHDO EXVLQHVV DW WKH HQG VR WKDW WKH\ ZRQ¶W QHHG WR FRQWLQXH WKH VXEVLG\ DQG WKH\ DUH WKHUHIRUH NHHQ WR HQVXUH WKH EXVLQHVV UHDOO\ FDQ PDNH WKH JUDGH $V \RX FDQ VHH WKLV LV YHU\ JRRG SDUWQHUVKLS DQG ZH ERWK EHQH¿W 7KH UHDOLW\ LV WKDW 4'% DUH EULQJLQJ D ORW RI YHQGRUV WR XV WRGD\ ´

What is your stance on worker welfare?

we want here. So we’re working with FRPSDQLHV WR ¿QG RXW ZKDW ZH FDQ GR ORFDOO\ DQG ZKDW ZH KDYH WR RXWVRXUFH +DYLQJ 4'% DV D SDUWQHU OHWV XV ¿QG RXW ZKDW¶V LQ WKH PDUNHW ,W¶V DOO DERXW JHWWLQJ WKH VWXII GRQH ORFDOO\ 7KH HDV\ WKLQJV \RX DOUHDG\ GR ³/HW PH JLYH \RX DQ H[DPSOH ZH QRZ KDYH D FRXSOH RI RSSRUWXQLWLHV WKDW , GRQ¶W WKLQN ULJKW QRZ FRPSDQLHV LQ 4DWDU FDQ DFWXDOO\ WDNH RQ %XW LI ZH WHQGHU WKLV DQG KDYH D FOHDU DJUHHPHQW WKHQ RYHU WKUHH \HDUV ZH PLJKW KDYH VRPHRQH ZKR FDQ GR LW 7KDW¶V ZKDW ZH ZDQW ´

What do you see as the greatest challenges of developing new markets? ³:H¶UH D JOREDO FRPSDQ\ DQG ¿UVW RI DOO \RX KDYH WR EH YHU\ ZDU\ RI WKH UXOHV WKDW DUH LQ IRUFH LQ GLIIHUHQW SDUWV RI WKH ZRUOG 7KH 86 KDV JRW WUDGH VDQFWLRQV 6R D SUHOLPLQDU\ VWHS LV WKDW ZH KDYH WR GR D FKHFN VR ZH GRQ¶W EUHDN D ODZ VRPHZKHUH 7KH VHFRQG WKLQJ LV DERXW VWDQGDUGV )RU LQVWDQFH ZH GRQ¶W ZDQW WR ZRUN ZLWK D FRPSDQ\ WKDW KDV FKLOG ODERXU :H XVXDOO\ EULQJ FRPSDQLHV RXW LQWR WKH RSHQ DQG ZH¶UH YHU\ GLUHFW ZH VD\ µEHFDXVH RI WKLV ZH FDQ¶W ZRUN ZLWK \RX¶ 7KHQ LW DOVR GHSHQGV RQ ZKDW D FRPSDQ\ VXSSOLHV ,I WKH\ DUH EULQJLQJ SHRSOH RQ VLWH WKHQ LW LV DERXW +66( 'R \RX KDYH WKH ULJKW V\VWHPV WKH ULJKW WRROV LQ SODFH VR ZH FDQ DVVXUH RXUVHOYHV WKDW ZH ZLOO KDYH D VDIH ZRUNLQJ HQYLURQPHQW"´

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What are some of the typical challenges in bringing local firms to a global benchmark? ³,I WKHUH LV D ZLOO WKHUH LV D ZD\ 7R DFKLHYH UHVXOWV WDNHV WLPH /HW PH JLYH \RX WKH H[DPSOH RI D JDVNHWV VXSSOLHU :H¶YH EHHQ ZRUNLQJ ZLWK WKHP IRU D ORQJ WLPH EHFDXVH WKH\¶YH OLVWHQHG WR XV XSJUDGHG WKHLU IDFLOLWLHV DQG ZH¶YH JRW WKHP LQWR RXU JOREDO WHQGHU SURJUDPPH ³,W¶V WZR ZD\ FRPPXQLFDWLRQ WKDW WDNHV SODFH DQG SHRSOH QHHG WR ZDQW LW WR ZRUN 7KH WKLQJ LV WKDW ZLWK WKLV VDPH JDVNHWV FRPSDQ\ ZH UDQ LQWR DQ LVVXH EXW ZH ZRUNHG ZLWK WKHP DQG WRJHWKHU ZH FDPH XS ZLWK WKH

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Roadmap Trade Finance Trends and the drivers of change p.44 Exporting to expand how Qatar’s businesses are looking to grow via international markets. p.50 Laying the foundations for Brand Qatar p.53

TRADE & FINANCE www.privatesectorqatar.com/en

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TRADE & FINANCE

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TRADE & FINANCE

ROADMAP

TRADE FINANCE TRENDS AND THE DRIVERS OF CHANGE +RZ DUH WKH JOREDO GULYHUV RI WUDGH ŵQDQFH LPSDFWLQJ UHJLRQDO WUHQGV DQG ZKDW DUH WKH QHZ RSSRUWXQLWLHV WKDW DUH HPHUJLQJ" +RZ DUH WKHVH SRZHUIXO IRUFHV VKDSLQJ WKH UHOHYDQFH DQG SRSXODULW\ RI W\SLFDO SD\PHQW PHWKRGV DQG ZKDW DUH QHZ FUHGHQWLDOV SUHIHUUHG E\ ,PSRUWHUV ([SRUWHUV DQG %DQNV" ,Q WKLV WLPHO\ DQG FRPSUHKHQVLYH DUWLFOH 'RKD %DQN UHYLHZV FXUUHQW VFHQDULRV DQG SUHVHQWV D FRPSHOOLQJ VXUYH\ RI PDUNHW GDWD

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TRADE & FINANCE

QATAR’S MAJOR GCC PARTNER, THE UAE, HAS ALSO SHOWN SIGNS OF GROWTH IN THE LAST COUPLE OF YEARS, POSTCRISIS, WITH THE GDP SHOWING GROWTH OF 4.3 PER CENT AND 4 PER CENT IN 2012 & 2013 RESPECTIVELY

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World trade growth fell to two per cent in 2012 from 5.2 per cent in 2011, and remained sluggish in the initial months of 2013 as the economic slowdown in Europe suppressed global import demand. The deceleration of trade in 2012 was mainly attributable to slow growth in developed economies and recurring bouts of uncertainty over the future of the euro. The Currency War which had begun on account of measures brought by various Major Central Banks in response to the Global Financial crisis contributed to trade war on the Global front. In 2012 Middle East exports grew by three per cent to US$ 1.29 trillion and region’s imports grew by six per cent to US$7.21 billion. Reinforced infrastructure development activities are taking place in Qatar in preparation for FIFA-2022. Qatar is basically an export driven economy largely contributed by state-owned hydrocarbon, with considerable trade surplus. The economy is dependent on other countries for many of her industrial and consumer requirements like automobiles, heavy equipments, building materials, white goods, furniture, textile, foodstuff, etc. While the country’s global imports have shown a growth of 17 per cent (QR 95billion from QR81billion) in 2012 over 2011, the exports grew 16 per cent (QR 484 billion from QR416 billion) during the same period. While 77 per cent of the export from Qatar is to Asian countries - Japan is the largest export-partner, South Korea in second with India standing on third place in the year 2012, 33 per cent of the import is from European countries with 31 per cent from Asian countries – the USA being the largest import-partner, China stood second and Germany came third in 2012 in overall value. Qatar’s major GCC partner, the UAE, has also shown signs of growth in the last couple of years, post-crisis, with the GDP showing growth of 4.3 per cent and four per cent in 2012 & 2013 respectively. The country is

predicted by experts to expand in the similar range next year with mainly transport, trade, tourism and real estate sectors expected to drive the growth. There is immense opportunity for partnering in infrastructure expansion in the UAE due to prospective economic growth coupled with the World-Expo 2020. Key trade partners of Qatar have shown credible economic growth in the recent past and the outlook is projected to be quite positive, although the growth rate has been slightly oscillating due to worldwide downturn and after-effects. With the global economic activity showing strengthening signs, the trend is predicted to improve further in the next couple of years largely due to the economic recovery being witnessed, especially in advanced countries. The political instability around the world, the latest being Russia-Ukraine crisis, and that of the region will of course involve its own drag factors, however. ,QVLJKWV RQ WUDGH ¿QDQFH “Trade Finance” in general terms means finance to facilitate trade transactions. In banking practice, the term is distinctly used to mean working capital finance that includes only certain types of facilities discussed hereafter. There has to be delivery of merchandise and/or a service, and at least two parties are required for a trade transaction to take place viz., a seller of goods/ service and a buyer of goods/service. In the modern days, most of the transactions are between unknown/ less-known parties. Therefore, there always is a likelihood of lack of trust between these parties when it comes to the certainty of delivery and/or payment. While a seller (exporter in international trade) may demand the buyer (importer in international trade) to pay for goods before shipment, the buyer (importer) may wish to reduce risk by requiring the seller to see the documents to ensure that the goods that have been shipped. Financial intermediaries like Banks, Financial Institutions and Insurance

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TRADE & FINANCE

AS THE WORLD IS PROGRESSING TOWARDS MORE FLEXIBILITY AND ADVANCEMENT IN TRADE TRANSACTIONS, THE DEMAND FOR NEW APPROACHES HAS INCREASED AMONGST EXPORTERS, IMPORTERS AND BANKS.

Companies can assist the parties in bridging the gap by providing different types of support in achieving the objectives of both the parties to secure their side of transaction. Basically payments for trade transaction can be settled in any of the following methods or by combination thereof: A Advance Payment – where

payment precedes the shipment/ service-delivery. While this is the most secured form of payment for the seller, it is the least preferred by the buyer for fear of security. B Documentary Credit (Letter of Credit) – where a bank independently commits to the seller (at the instructions of the buyer) for payment against presentation of certain documents of shipment, say, eg, commercial invoice, packing list, bill of lading (transport document), certificate of origin, etc., that are fully complying with the terms of documentary credit. The seller (exporter) is assured of receiving payment provided it ships the goods complying fully with the documentary requirement of the letter of credit. Similarly, the buyer (importer) is comfortable with the fact that it is obliged to pay under the documentary credit only against shipping documents establishing actual shipment having taken place. While this is the most preferred form of settlement, often sellers present documents that are not complying with the terms of documentary credit due to lack of expertise, thereby prejudicing the payment assurance. C Documentary Collection – where the banks facilitate settlement in trust for the seller. Although this is the cost-effective method of settlement, it is not preferable for a risk-averse seller. D Open Account – where the trade

dues are settled in pre-agreed manner irrespective of delivery dependency.

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This mostly takes place between the parties that are either related (say Head Office and branch) or having full trust between them. As the world is progressing towards more flexibility and advancement in trade transactions, the demand for new approaches has increased amongst Exporters, Importers and Banks. Depending on the agreement between the parties and cash-flow of the business, banks come to play a very important role in meeting the working capital requirement. While working capital is broadly divided into two groups, the following well-known products/services are offered by various Banks/Financial Institutions in Trade Finance sector. E Fund Based Finance – where

banks lend cash to the parties in the form of buyers credit or sellers credit. E.g.: Loan against Trust Receipt (LTR); Bill Discounting; Term loan; Export Finance; Forfaiting; Factoring. F Non-­fund Based Finance

– where banks either facilitate payment process or issue commitments to support the trade. E.g.: Remittances; Issuance of Documentary Credit, Standby Credit; Guarantees/ Indemnity; Confirmation to Export Documentary Credit. 1. Documentary Credit (Letter of Credit): A documentary credit is an undertaking issued by a Bank/Financial Institute to the Seller/Exporter (at the instance of the Buyer/Importer) to the effect that if the Seller/Exporter presents the documents (that are complying with terms of documentary credit) to the designated Bank/Institution as VSHFL¿HG LQ WKH GRFXPHQWDU\ FUHGLW then the issuing Bank/Financial Institute will make payment to the Seller/Exporter. Documentary Credits (or simply “Credit” in banking parlance) are usually governed by the Uniform Customs and Practice for Documentary Credit

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TRADE & FINANCE

QATAR’S GLOBAL IMPORTS HAVE SHOWN A GROWTH OF 17 PER CENT (QR 95BILLION FROM QR81BILLION) IN 2012 OVER 2011, THE EXPORTS GREW 16 PER CENT (QR 484BILLION FROM QR416 BILLION) DURING THE SAME PERIOD. WHILE 77 PER CENT OF THE EXPORT FROM QATAR IS TO ASIAN COUNTRIES - JAPAN IS THE LARGEST EXPORTPARTNER, SOUTH KOREA IN SECOND WITH INDIA STANDING ON THIRD PLACE IN THE YEAR 2012, 33% OF THE IMPORT IS FROM EUROPEAN COUNTRIES WITH 31 PER CENT FROM ASIAN COUNTRIES – THE USA BEING THE LARGEST IMPORT-PARTNER, CHINA STOOD SECOND AND GERMANY CAME THIRD IN 2012 IN OVERALL VALUE.

(UCP) published by the International Chamber of Commerce (latest publication being UCP600). Types of Documentary Credit: A  Revocable  Credit  - A revocable

credit can be amended or cancelled at any time by the importer without the exporter’s agreement (unless documents have been taken up by the nominated bank). Very little protection is available to the exporter with a revocable credit and it is no more seen now-a-days. B  Irrevocable  Credit - An irrevocable

credit can neither be amended nor cancelled without the agreement of all parties to the credit. Under the UCP600, all credits are deemed to be irrevocable. Here, the importer’s bank gives a binding undertaking to the supplier provided all the terms and FRQGLWLRQV RI WKH FUHGLW DUH IXO¿OOHG

48

C &RQÂżUPHG &UHGLW $ FRQÂżUPHG

FUHGLW LV RQH LQ ZKLFK WKH FRQ¿UPLQJ bank, at the instructions of the issuing EDQN DGGV D FRQ¿UPDWLRQ WR WKH HIIHFW that the payment will be made as long as complying documents are presented. This commitment remains valid even if the issuing bank or the buyer fails WR PDNH SD\PHQW 7KH FRQ¿UPLQJ bank will make an additional charge IRU FRQ¿UPLQJ D FUHGLW &RQ¿UPDWLRQ costs will vary according to the country involved. There may be countries issuing credit, which banks do not wish WR FRQ¿UP WKH\ PD\ DOUHDG\ KDYH enough exposure in that market or do not wish to expose themselves to that particular risk at all. D 8QFRQ¿UPHG &UHGLW – &RQWUDU\ WR D FRQ¿UPHG FUHGLW DQ XQFRQ¿UPHG FUHGLW LV PHUHO\ DGYLVHG by the advising bank, by ensuring the authenticity of the credit, to the exporter without adding its own

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TRADE & FINANCE

undertaking to make payment or responsibility for payment. E  Standby  Credit - A standby

credit is used as a support where an alternative and less-secure method of payment has been agreed. They are also used in some countries in the place of bank guarantees. If the seller does not receive the payment from the buyer, it may claim under the standby letter of credit. Although the International Chamber of Commerce has published rules for operating standby credits (International Standby Practices, ISP98), quite often standbys are issued subject to UCP600 as well. F Revolving  Credit - A revolving credit is used to support periodic shipments of the same commodity to the same importer. It can revolve in relation to time or value. If the credit is time revolving, once utilized it is re-instated for further shipment until the credit is fully drawn. If the credit revolves in relation to value, once utilized and paid the value can be reinstated for further drawings. The credit must state that it is a revolving credit. It may revolve either automatically or subject to certain provisions. Revolving letters of credit are useful to avoid the need for repetitious arrangements for opening or amending letters of credit. G  Transferable  Credit - A

transferable credit is the one in which the exporter has the right to request the paying or negotiating bank to make either part, or all, of the credit value available to one or more third parties. Transferable credit is useful for those sellers acting as traders especially where there is a need to ¿QDQFH SXUFKDVHV IURP WKH VXSSOLHUV 2.  Bank  Guarantee/Indemnity: It

is a written undertaking issued by a Bank/Financial Institute on behalf of the principal (applicant) in favour of the beneficiary. The Bank undertakes that if the principal fails to fulfill its obligations, either Financial or Performance, as per the agreement

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made between the principal and the beneficiary, then the Guarantor Bank, on behalf of the principal, would make payment of the guarantee amount to the beneficiary upon receipt of a written demand/claim from the beneficiary. 3. Pre-­shipment  Finance: This is a funded finance provided by banks to exporter to process and make the goods ready for shipment (until shipment) against export receivable. The name though differs in different geographies depending on the local practice, it is also known as packing credit. 4. Collection  and  Discounting  of  Bills: It is a major post-shipment trade service offered by Banks. The seller’s Bank collects the payment proceeds on behalf of the seller, from the buyer or buyer’s Bank, for the goods/service sold by the seller to the buyer as per the agreement made between the seller and the buyer. Most banks provide discounting facility, wherein the seller is offered upfront cash-loan against such export/sales receivable. 5. Forfaiting:

Forfaiting is supplier’s credit or vendor ÂżQDQFH ZKHUH D EDQN SXUFKDVHV D deferred-receivable from the exporter on a “without recourseâ€? basis. It is a PHWKRG RI WUDGH ÂżQDQFH WKDW DOORZV the exporter to obtain cash from the VSHFLDOLVHG ÂżQDQFLQJ LQVWLWXWH RU EDQN by selling the export dues at a discount. Usually it is for large ticket transaction, relatively longer term (say six months or over) and backed by Bill of Exchange or Promissory Note or Documentary Credit. The Forfaiter usually will insist that it be guaranteed by the importer’s bank. Forfaiting virtually eliminates ULVN WR WKH H[SRUWHU ZLWK IXOO ÂżQDQFLQJ of the contract value. Ultimately, the responsibility to collect payment from the importer will rest with the forfaiter. 6. Factoring:

Is a financial arrangement in which a seller sells its invoices (normally

short term) to a third party called a Factor for a price. The factor purchases the client’s book debts (accounts receivables) either with or without recourse to the client and in relation thereto manages the credit extended to customers. Depending on the arrangement, the factor makes an advance of 70-80 per cent of the purchase price of the receivable amount retaining remaining the amount as margin. The factor collects the full amount from the customer in due course and settles the balance amount after deducting his commission and other charges. Sometimes the factor may not make immediate advance on the purchased accounts, but follows up with the buyer until payment of the invoiced amount. However, if the customer fails to make payment within the stipulated time, the factor makes payment to the client and proceeds to collect the payment from the customer. It is different from forfaiting in the sense that forfaiting is a transaction-based financing in which the exporter sells one of its transactions, while factoring is a financial arrangement that involves the sale of any portion of the seller’s receivables. Tailpiece: As proved by various surveys, more than 50 per cent of drawings get rejected by banks at first presentation due to discrepancies in them. As the consequential cost to both the exporter and the economy is high, it is important for credit transactions to be handled carefully from beginning till actual drawdown. Most of the cases, the damage can be avoided if the parties to the transaction take proper care to comply with the terms of credit and international practice. A good understanding of Uniform Customs and Practice for Documentary Credits (UCP) published by International Chamber of Commerce, Paris, in addition to local statutes, is advisable.

49

TRADE & FINANCE

EXPORTING TO EXPAND

The increasing globalisation of business activity provides substantial opportunities for SMEs to grow by entering international markets through exporting. Whether a company is “born global” or has been trading for thirty years and is looking to export for the wÀÃÌ Ì i] } ÛiÀ i ÌÃ and the banking sector must commit to offering advice and support so that small and medium sized business ventures can start exporting immediately.

50

HOW QATAR’S BUSINESSES ARE LOOKING TO GROW VIA INTERNATIONAL MARKETS. VICTORIA CONNOLLY REPORTS.

Exports and exporting are regarded as key factors to stimulating future economic growth at both a micro and macro level. While encouraging SMEs to export maybe a challenge - and indeed is the essence of several prime initiatives for the government of Qatar - there is plenty of evidence to support the view that the advantages to businesses (and the economy as whole) of successfully entering foreign markets far outweigh the challenges faced by companies new to exporting. In 2011 QDB launched its Tasdeer programme, offering financial solutions, credit insurances and advisory services for exporters. The programme was set up with the following objectives: 7KH GHYHORSPHQW DQG SURPRWLRQ RI exports from Qatar in international markets. 7KH SURYLVLRQ RI FUHGLW JXDUDQWHHV and financial products and solutions for companies wishing to enter the export market in order to alleviate the risks faced by local SMEs.

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TRADE & FINANCE

QATAR HAS EXPERIENCED A GROWTH OF 40 PER CENT IN EXPORTS IN 2013 AND THE SECTOR CONTINUES TO GROW RAPIDLY 100 90

Growth in Qatar exports 2012 – 2013

80 70 60 50 40 30 20 10 0 2012

With 85 per cent of Qatar’s export earnings for 2013 coming from the hydrocarbon sector and its downstream industries, the largest two being plastics, a subsidiary of the gas production process and construction materials, Qatar has experienced a growth of 40 per cent in exports in 2013 and the sector continues to grow rapidly. Breaking into international markets involves considerable investment and in some cases high levels of risk. The need to grow production capacity results in local businesses recruiting substantial numbers of new staff with the skills and background required to help meet the challenge of exporting. Time is required to scope out and research new markets, additional financial resources are required to develop appropriate marketing strategies and to understand and meet different national regulatory standards. Fine tuning a product or service to enter a new market can be

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a risky and expensive activity, one that requires support and guidance from external institutions. Providing access to reliable and current data for such enterprises is essential. Supporting SMEs with marketing, exhibitions and networking opportunities in new countries, identifying target markets and creating a forum that allows exporters and importers to come together and do business, are key support services that government-led programmes such as Tasdeer offer to small and medium sized business in Qatar who wish to take the brave steps of entering international markets. In Qatar, as part of the countries “National Vision” strategic plan for 2030, emphasis has been placed on exporting as a key feature in the stimulation of economic growth. The contribution of SMEs to economic growth resulting from their export behaviour is crucial to the success of this initiative. The benefits of exporting as a means of business

2013

growth are well documented: evidence suggests that exporting is associated with innovation and growth in turnover and employment; it builds investor and stakeholder confidence in the longevity of a business and offers a lucrative extension to the lifecycle of existing products and services. For these reasons a move into international markets is often a key feature of growth plans for SMEs. There are risks that must be considered when a local business decides to investigate its export capability. With an economy that has traditionally been highly dependent on oil and gas extraction and with current levels of hydrocarbons being sustainable only in the medium term, the Qatar government is committed to putting support structures in place that will help its economy diversify into a sustainable long-term model and encourage SMEs to expand into foreign markets as a major part of their long term strategic planning.

51

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TRADE & FINANCE

LAYING THE FOUNDATIONS FOR BRAND QATAR Associate Editor Victoria Connolly explains how the government and the banking sector in Qatar are helping SMEs to develop the knowledge, skills and experience they need to make their business dreams become commercial reality. Initiatives that aim to make profound differences in the make-up of the Qatari economy and drive forward its rich and varied private sector offering.

Many people believe that SMEs are the key components of economic growth, the cornerstone of the private sector; others find them to be a liberating, empowering opportunity, driving creativity and encouraging specialisation and innovation. Whatever your belief about SMEs, many governments, Qatar’s included, fully realise the importance of private enterprise to the economy – in terms of GDP, growth and talent – and are setting up bodies to create them, support them and (most importantly) enable them to succeed.

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It’s through strategic alliances with organisations such as Enterprise Qatar that the Qatar government’s vision of an economy driven by the entrepreneurial innovation and diversification of SMEs is rapidly becoming a reality. A dynamic and vibrant sector of the economy, SMEs contribute significantly to GDP and provide jobs for the majority of private sector employees. GCC governments seeking ways to diversify their economy from oil and gas have opted to enhance this important sector and working together with

banks and private finance houses are in the process of creating financial products that support SMEs in all stages of the business life cycle. Such a commitment to private enterprise is crucial in providing young entrepreneurs with the financial safety net they need to allow them to take the risks necessary to develop new ideas for products and services. With the rapid development of SMEs in Qatar, many entrepreneurs now originate from outside families that would be considered to have a tradition in business and private

53

TRADE & FINANCE

HOW LONG DOES AN SME HAVE TO BE IN BUSINESS TO GET FUNDING?

Less than 2 years 0.4% 2-4 years 11%

enterprise. As a new cohort of young, dynamic business men and women pitch ideas for business ventures, banks must begin to examine the services they currently offer to business startups and commit to providing the level of support and training required so that lack of business knowledge does not become a barrier to entry. A key component in the success of any new business is the presence of managerial experience and expertise. Many first time entrepreneurs have had little exposure to private enterprise and lack the skills needed to successfully launch and establish a new venture. Lack of experience in the collection and analysis of relevant financial data creates a challenge for new businesses as they seek the necessary finance to begin trading. Forecast sales and predicted costs are a vital part of any successful

54

more than 4 years 14%

business plan; entrepreneurs must provide potential investors with the information they need to make an informed decision about the viability of a new business idea. Enterprise Qatar, the government body set up to support the development of SMEs was established in 2011, with a responsibility of encouraging the development of the SME sector in Qatar and putting a strategy in place to encourage growth for these enterprises by providing them with technical assistance and coordinating with banks and governmental institutions for the purpose of financing and marketing projects. With a vision “to be the focal point of SMEs and the driver of economic diversification and entrepreneurial innovation in Qatar”, the mission of Enterprise Qatar is clear; “to create an SME ecosystem conducive to an

ONLY 0.4 PER CENT OF SMES GET FUNDING WITHIN 2 YEARS OF START-UP innovative entrepreneurial spirit and business growth and to support SMEs in achieving excellence of business execution.” Operating in partnership with Enterprise Qatar, Qatar Development Bank and associated commercial banks work alongside entrepreneurs to not only provide a range of financial products that will enable a new business venture to become established, but also offer much needed expertise and support when producing essential documentation such as feasibility studies and business plans. With the development of online business planning tools such as QDB’s SME toolkit, banks in Qatar are now able to provide entrepreneurs with support and information on all aspects of establishing and operating a small or medium-sized business. Business and financial planning software is available to download and userfriendly, jargon free financial advice is easily accessible both online and in person. Such industry standard services offer support to those seeking advice on the most effective way to secure finance for their business and offers users a choice of banks and banking products while giving banks access to the information that allows them to lend intelligently. The current generation of entrepreneurs in Qatar is talented, dynamic, hardworking and well educated. What they may sometimes lack in business experience and knowledge they more than make up for in energy, ideas and dedication to the success of their ventures. Through the commitment of the banking sector to help support and nurture viable business ideas, the future for SMEs in Qatar is not only looking bright, it is looking brilliant. What do you say?

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Social media: ‘Big’ opportunity for ‘small’ businesses p.56 Your starter for 10 p.60 P for People p for progress p.62 Getting finance supercharge your business and secure the funds you need p.64 Succession planning: safeguarding your business for the future p.56

BUSINESS TOOLKIT www.privatesectorqatar.com/en

55

BUSINESS TOOLKIT

SOCIAL MEDIA: ‘BIG’ OPPORTUNITY FOR ‘SMALL’ BUSINESSES

Well, then what’s the need to get advice on social media? It’s because running a social media account for your personal use and generating social media presence for your small business are as different as chalk and cheese. For an entrepreneur or small business owner/director, social media is a great boon – an easy,

56

cost-effective (or, free most of the WLPHV DQG HI¿FLHQW SODWIRUP WR communicate with a mass audience! Therefore, it’s only fair that you give LW VXI¿FLHQW DWWHQWLRQ DQG WLPH WR ensure that you are making the most out of it. Here, we present an easy 10 step guide for your small business to achieve social media success…

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BUSINESS TOOLKIT

STEP Â 1: Â

Don’t  be  a  â€˜Jack  of  all  trades,  master  of  none’.

To boost your online presence, you don’t have to create an account on every social media platform under the sun. Keep it simple; start with one or two that are best suited to the needs of your business and master those. Remember: quality is better than quantity. Twitter, for example, is an ideal option for companies looking to create PR. On the other hand, Facebook is probably a good option for companies looking to display a lot of multimedia.

STEP  2:  Have  a  strategy  in  mind. Take this example: you’ve decided to lose weight so you have enrolled yourself into an expensive health club. You go WKHUH RFFDVLRQDOO\ DQG DUH VDWLVÂżHG WKDW you are working out. But, in reality is WKLV DFWXDOO\ VXIÂżFLHQW WR ORVH ZHLJKW" Social media is no different, signing up for an account and posting a few things from time to time will not yield any results. Just like any other business-related activity, social media is a tool for business growth and hence requires a well-thought plan of action. This will give you a direction to move ahead in and ensure that you aren’t shooting in the dark. Your strategy doesn’t need to be very fancy or complicated. Create a simple document that outlines basic issues such as: a) What is the business looking to get out of this campaign – a certain number of followers, attracting audience to monthly HYHQWV JHQHUDWLQJ VDOHV UHYHQXH HWF " b) How often does the social media page need to be updated – hourly, GDLO\ ZHHNO\" c) Who is responsible for managing all WKH RQOLQH DFWLYLW\" d) :KDW LV \RXU WDUJHW DXGLHQFH" e)  How is your brand positioned in the market and how can you reinforce this E\ VRFLDO PHGLD XVDJH"

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STEP Â 3: Â

Create  good  content.

What you’re saying to your audience LV RI SDUDPRXQW VLJQL¿FDQFH DV this is directly correlated with how interested they will be in your page. Ensure that the information you are sharing on your page is relevant to your audience and more importantly a good indication of your brand value. For instance, if your company is in the service industry offering grooming services, promoting best hygiene practices on your page is a great idea, and soon consumers will start associating your brand with good hygiene.

STEP  4: Stop  selling,  start  sharing. Ensure that your page doesn’t look a mini-version of your product catalogue! For more information about your products and services, your consumers can visit your website. Through social media, you can talk to your consumers about your brand values, founders, company vision, and so on. Your audience wants to interact with their favourite brand on a more human level! Another great strategy to keep in mind is: sharing and reposting interesting facts and insights from other pages. It doesn’t have to be a direct competitor but don’t be afraid to network and collaborate with your peers, partners and fellow brands on your social media page. This actually looks better for your business as you are offering more value content to your audience.

STEP Â 5:

Welcome  negative  feedback.

Customer criticism isn’t the end of the world. This is where you put on your rose-coloured glasses. Refrain from immediately deleting the post; ignoring

the problem isn’t solving it. Instead, calm the customer down with a sincere apology (yes, even if he/she is wrong) and say that your team is currently working on a solution and will contact them personally. This is a chance to prove to your consumers that your business is open to feedback and takes it very seriously.

STEP  6: Don’t  be  afraid  to  use  advertising  tools.  If your business does have a budget for online advertising, social media offers popular choices. Facebook ads are very well known and are great way to boost individual posts and allow businesses to pick and select areas that they want to highlight. These ads DUH DOVR D JRRG ZD\ WR WDUJHW D VSHFLÂżF audience and narrow the reach of your campaign.

STEP Â 7:

Money  can  buy  a  lot  of  things  but  not  followers.

Paying for ‘likes’ or followers and so on, isn’t fooling anyone. It’s better to have 5000 followers that are true ambassadors of your brand and are loyal to your company instead of 50,000 followers that have little to no interaction with your brand. Consumers that have tried and tested your products will automatically spread the word leading to a solid fan following on your page. So, have faith in your strategy!

STEP  8: Beware  of  bandits! Social media may be an effective marketing tool but if not handled with care, it can to lead disastrous outcomes. There’s often a chance of something going wrong – especially when working with technology. Picture this scenario: you have a

57

BUSINESS TOOLKIT

76% OF ALL INTERNET USERS IN QATAR USE SOCIAL NETWORKING SITES FACEBOOK DOMINATES SOCIAL NETWORKING, AS 86% OF ADULTS WHO NETWORK IN QATAR USE THIS PLATFORM 70% OF ALL RESIDENTS OF QATAR REGARD THE INTERNET AS AN IMPORTANT SOURCE OF NEWS, COMPARED TO A MODEST MAJORITY OF 59% WHO SAY TV IS IMPORTANT very hands-on social media account which has a fairly decent number of proactive followers. One of your social media executives decides to leave the company but you don’t change your account password. Now, your ex-employee is posting negative comments about your brand through your account on your page! Can you even begin to comprehend the amount of irreparable damage that can cause to your small business? This situation, of course, is one amongst many possibilities that can cause more harm than good to your business success.

STEP 9: Draft a social media policy. This step is a precautionary measure to avoid the problem of bandit messaging described above. Apart from a social media plan, it’s crucial to have a social media policy in place as well. Most small businesses might not be aware of the importance of having this drafted. The policy should list key guidelines for those involved in the day-to-day management of social media within your business. This document should be more formal and should touch upon areas such as ‘sensitive topics that shouldn’t be discussed on social media like politics or religion’ or ‘the tone of language when addressing customers’. Make this as comprehensive as SRVVLEOH WR DYRLG DQ\ IXWXUH FRQÀLFWV with your employees. It should include minor issues like using British English vs. American English for your social media content. At the same

58

time, it should also address major issues such as – dealing with an angry customer who has just called your employee ‘stupid’. The document can be appended to staff contracts and personnel are required to sign a commitment not to transgress the agreed social media policies.

STEP 10:

Analyse your ROI.

Don’t forget that like all other marketing tools social media should have an end goal that affects your business positively. Without getting anything out of it, there is no value for any small business to do it at all. It’s important to have a bi-weekly or monthly check of how well your page is doing, what appeals to your consumers and what doesn’t, topics that receive the most interest and so on. One of the greatest appealing factors of social media is the ability to measure response precisely and be able to run experimental messages to see how it impacts customer perception. Most social media sites have made this quite an easy task offering analytics that help businesses determine their progress. Also, set aside times to meet with your social media team to ensure that they are on the right track – it’s crucial that your team understands your vision as they are the face of your organisation online. Finally, use social media to enhance the overall experience of your customer’s interaction with your brand instead of a tool to blatantly sell your products.

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BUSINESS TOOLKIT

YOUR STARTER FOR 10 Sales & Marketing initiatives are fundamental to making sure a business keeps moving forward, builds market share and sustains its FDVKŶRZ +HUH DUH 10 top tips that are practical, easy to implement and KLJKO\ DIIRUGDEOH Start putting them in place today!

1

KNOW YOUR CLIENT

Be alert to details that matter to the client and recognise what makes each client unique. The reality is that your brand promise hinges on staff knowing what’s distinctive about their clients and working proactively to sustain a positive relationship with each one. Tell your clients all the things you’re doing for them (some of which they might not know about) and always make a point to ask them questions about their business.

2

BUILD A CLIENT NETWORK

Ask key clients for their permission to include a link to their websites on your own business’s website. They are likely to agree wholeheartedly and will also appreciate your loyalty to them, which should help you bond still further. Also, reference their work and skillsets across your raft of further client communications.

3

BE MOBILE FRIENDLY

Make your website mobile-friendly so your customers on-the-go can easily access your information if they need it. It’s a great idea to create enriched and animated content that your customers can access with a bespoke app.

60

4

SEE IT FROM THE CUSTOMER’S POINT OF VIEW

Put yourself in the customer’s shoes. Think: “If I were them, what questions would I ask – and what reassurances would I need to put any concerns at rest?” Use this simple test to evaluate if what you’re doing now is really customer-friendly enough.

5

MAKE YOUR CLIENTS YOUR VALUED FRIENDS AND CONTACTS

Stop speaking the same old story about product and price. Making friends with your customers is a very good route to ensuring they become your best clients. When you are arranging conferences, seminars and presentations, invite them to take part - and you will never be short of quality contacts.

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BUSINESS TOOLKIT

10

BELIEVE IN YOUR BRAND

Passion is contagious. If you don’t believe in your brand, no-one else will. Let everyone - including clients and competitors - know why your SME is the best. You’ll be much more likely to generate genuine enthusiasm, which will in turn make your business the ¿UVW RQ HYHU\RQH¶V OLSV DQG GULYH PRUH customers to use your services.

7

PROMOTE YOUR WEBSITE

It’s amazing how many businesses forget to promote their website. It should be prominent across all your marketing activities. This could include business cards, brochures, e-mails and social media. Basically, anywhere you have your agency logo, your URL should be there, too.

6

MEASURE FEEDBACK AND OPINION

Measure customer sentiment with social media - not just negative, but positive, too. If your customers are singing you praises, use that to tell more people about your business’ excellence and get some real marketing traction from it.

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8

DON’T ALWAYS MEET: SHARE!

It’s not always possible to get an inperson appointment. Using easy-to-use screenshare technology such as Join.me is a good way to share a presentation; or alternatively, you can go through your website while you’ve got the prospect or client on the phone. This is a good tactic because it positions you as the client’s VVIP guide.

9 STRATEGIZE

All marketing needs a strategy and a goal. Aimless marketing is ineffective and costly. For example, you want to post a banner? Send an e-mail to a list? Start a newsletter? Good activities, but have you got a solid reason for doing them and have you evaluated what you want to achieve?

Make these 10 tips your sales and marketing mantra. Test yourself on how many times a day you’ve actioned any or all of them. It’s also a good idea to remember one more – “As an average in the SME sector, it will take three months to generate a piece of new business - so if you’d started 10 weeks ago, you’d be getting ready to celebrate.” 61

BUSINESS TOOLKIT

P FOR PEOPLE P FOR PROGRESS What’s the biggest asset within \RXU 60(" ,I \RXU ĹľUVW UHDFWLRQ ZDV SODQW PDFKLQHU\ RU ODQG think again. Although these DVVHWV FRPH DWWDFKHG ZLWK D VLJQLĹľFDQW PRQHWDU\ YDOXH VRPHWKLQJ WKDWĹ‘V LQFUHGLEO\ important in most businesses, DQG SDUWLFXODUO\ LQ 60(V LV the people who work in them. That’s why implementing VRXQG VWUDWHJLHV WR SURWHFW DQG QXUWXUH \RXU Ĺ?3HRSOH DVVHWVĹ‘ FDQ PHDQ ORQJ WHUP JURZWK DQG progress for your business‌

62

It may very well be the case that you’ve already spent all your cash in hand on building and sustaining your business. So, any other provision that requires attention is completely neglected. This is a common mistake that most SMEs make at their own peril. Here, we highlight a few basic steps that can have an enormous impact on your business and leave you with satisfied (read: productive) employees!

way to communicate internally is through videos. For instance, if one of the employees within your company is constantly late to work, the HR department can make a light-hearted video depicting a scenario wherein a staff member that comes in late constantly is letting down the team and can eventually be fired. This enables the message to be sent across in a subtle way while still positively engaging your employees.

1. Communication  is  key Continuous and meaningful interaction with employees is absolutely necessary; it ensures that both parties know what to expect from one another. And, the truth is that such conversations don’t have to be painful. A simple yet effective

2. Key  Man  insurance SME owners or directors, more often than not, form the backbone of their business. So, what happens when they fall critically ill? Or, if they are in a position where they can no longer continue normal business responsibilities? The answer is

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BUSINESS TOOLKIT

IDENTIFYING THE RIGHT KPIS AND LINKING THEM WITH INCENTIVES CAN WORK WONDERS FOR YOUR BUSINESS. your SME meet its responsibilities towards staff, investors, and most importantly, customers!

Key Man insurance. It provides the business with ‘buffer’ funds to operate through this difficult phase until it finds a suitable replacement. It’s also important to note here that Key Man insurance can provide cover to any person that is crucial to the working of an SME and cannot be easily replaced – someone that handles majority of the clients, has detailed knowledge of the business financial standing and investment portfolio or manages sophisticated technical operations. On the surface, such an option might look like it’s just about an individual but remember that it not only makes a tremendous difference to the crucial needs of your business but also helps

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3. Medical cover A common mistake made by most businesses is that they consider Medical cover as an added benefit to their employees. Medical cover is a necessity. There is nothing more counter-productive than having staff worried about medical bills rather than being able to focus on the job at hand. In fact, making basic health services available to employees will work in the favour of your SME. Let’s take the example of an employee who has been constantly sick due to lack of appropriate medical attention. He logs in several sick days over the month leaving a huge pile of pending work. Eventually, the job has to be either passed on to one of his peers – who might not be able to handle the added workload – or has to be completed by the manager himself. Moral of the story is that healthy employees are happy employees that enhance the overall productivity of the business. 4. Set goals As an SME, you may have a great idea and a well-defined business plan, but these may be of no use if they aren’t broken down into short-term realistic goals. Without knowing what is expected out of them, employees can easily lose sight of their role in the company. And, this can be extremely dangerous for an SME with limited people resources – what happens

if two out of three people in the business aren’t performing? Taking your long-term vision and simplifying it into smaller targets can help your employees stay on track in addition to making it easier to measure their performance over short periods of time. Another crucial aspect to bear in mind is Key Performance Indicators (KPIs). Identifying the right KPIs and linking them with incentives can work wonders for your business. These incentives could range from monetary benefits, profit sharing, awards for excellence, enrolment into a recognition programme, to additional training initiatives. By implementing such a system, you are now able to tie performance directly to employee incentives. Implement a Change Management Plan Change is a part and parcel of SME life and there’s no denying that when this organisational change actually comes about, it directly affects all departments from the entry level employee to top level management. The implementation of a Change Management Plan – which highlights action steps in the case of such situations – can empower your business and prepare your employees to tackle any internal and external changes smoothly. This Plan should be available online for all staff and should be as detailed as possible. This step, which is often overlooked by HR professionals, provides your business a predictive ‘buffer’ against external change and ensures that it can be absorbed progressively without a catastrophic fall-out. 5.

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GETTING FINANCE SUPERCHARGE YOUR BUSINESS AND SECURE THE FUNDS YOU NEED For every SME, getting the funds needed to grow the business, develop and market new products and recruit the right level of staff is the absolute life blood of the organisation. But how to know where to look, make the right preparation and maximize your chances of attracting the sums you need? Private Sector Qatar investigates and presents this keypoint guide‌

First things first. Borrowing money is a serious business and the first step is to ask if you actually need to go down the road of talking to a bank or attracting an investor. Perhaps you’ve already got a source of funding from family or friends? If so, do you really need more at this stage, or should you try to grow the business organically from a combination of increased sales and keeping overheads as low as possible? If you decide you definitely want those funds, remember that:

t 4.& PXOFST PGUFO NBLF UIF NJTUBLF PG OPU JEFOUJGZJOH XIBU UIF FYUSB NPOFZ XJMM CF OFFEFE GPS t *U T B HPPE JEFB POMZ UP CPSSPX JO SFMBUJPO UP WFSZ TQFDJGJD OFFET BOE PCKFDUJWFT TBZ JG ZPV XBOU UP VQHSBEF ZPVS DPNQBOZ WFIJDMFT NPWF UP MBSHFS QSFNJTFT PS GVOE BO 3 % JOJUJBUJWF UIBU XJMM QVU ZPV XFMM BIFBE PG UIF DPNQFUJUJPO You’ll also find potential lenders are much more willing to listen if they think you have a concrete strategy as to what the money will be spent on. What  type  of  finance  partner  do  you  want?

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This is a vital question, because the world is full of businesses who got the money they wanted - and then dearly wished they could have chosen a different lender. Do you want a lender who will keep their distance and simply ask for set repayments? If so, a bank will be a classic and preferred option. A bank is a ‘risk partner’, not an investor. If all goes well, they will get their money back, plus interest. Yet they also risk losing out if your business goes under or performs badly, because they’re not an investor who will reap the benefits of owning a share of your company. The caveat with this is that a bank may want to see a proven trading history over two years or more,

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BUSINESS TOOLKIT

Do you want a lender who will keep their distance and simply ask for set repayments?

tend to be wealthy individuals with a proven record of investment in a specialist sector - to new approaches such as ‘crowd’ investment, where a web site will post your loan request to a membership base, who may each contribute a relatively small sum and meet your target collectively.

backed up a by a professionallyaudited set of accounts. So this may not always be the first source of funding if your business is relatively new, or a startup. Working with a bank can have powerful advantages, though. It gives you access to a credible group of experienced professionals who may also be able to help you in other areas of the business, eg, finalising trade agreements or remortgaging a warehouse. Plus, it’s a very straightforward arrangement: the bank won’t interfere in the day-today running of your business or tell you to develop new products or change staffing costs. So for many SMEs this is an ideal working

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arrangement - funds without a complicated working relationship. An investor, on the other hand, may come in from Day One and in return for that ‘leap of faith’ will want a share of your business. He or she (or perhaps it’s a company or syndicate) may be able to give you strong mentoring or business guidance, and this may be valuable not just at the very beginning but as you reach crucial stages in the business’ development. On the other hand, this dialogue can become a burden if you don’t get on well or if you disagree about future development strategies. There are different types of investor and investment technique, ranging from so-called ‘angel’ investors - who

Getting ready… Since the plusses and minuses of being a risk partner or an investor differ so much, it’s inevitable that they will want to see very different documentation from you. So in the case of a bank, the emphasis will be on verifying the assets your business owns, its cashflow and outgoings. You’ll need to provide not only a set of audited figures showing profitability and a full record of transactions, but also an analysis of receivables and creditors and a valuation of plant, machinery and premises. On the other hand, an investor - who may be coming in at a much earlier stage and be around for much longer - will be looking at aspects such as your willingness to commit personal equity, your character and financial track record and how passionate you are about building the business.

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Since the plusses and minuses of being a risk partner or an investor differ so much, it’s inevitable that they will want to see very different documentation from you

The  Business  Plan:  your  roadmap How can you get from where you are now to your objectives in a three years’ time without a roadmap? In this case, that roadmap is called a Business Plan - and both risk partners and investors will want to see one before they see anything else. It should include –

t " NJTTJPO TUBUFNFOU t " EFTDSJQUJPO PG ZPVS 641 t " EFmOJUJPO PG ZPVS $PSQPSBUF 7BMVFT t " EFUBJMFE EFTDSJQUJPO PG XIBU ZPVS CVTJOFTT EPFT t 1SPKFDUFE HSPXUI UBSHFUT t 1SFGFSSFE MPDBUJPOT t 4UBGGJOH SFRVJSFNFOUT t 5BSHFU NBSLFUT BOE DVTUPNFS EFNPHSBQIJDT t $PTU PG ZPVS QSPEVDUT BOE TFSWJDFT BOE IPX UIFZ DPNQBSF XJUI DPNQFUJUPST t 1SPKFDUFE UVSOPWFS BOE NBSLFU QSFTFODF GPS ZFBS FOE :FBS 0OF :FBS 5XP BOE :FBS 5ISFF While including all the above, keep the Business Plan simple and crystal clear. Get it produced in hard copy and online formats and ensure it’s available to back-up each and every finance meeting you have. Five  Top  Tips  to  boost  your  finance  application There are also a number of other factors that will help with your finance application, which will all show that you’re a credible professional prepared to make best use of the sums involved. These are –

t $POEVDU B 3JTL "VEJU BOE BUUBDI JU UP UIF #VTJOFTT 1MBO BT BO BQQFOEJY 5IJT MJTUT BMM UIF LFZ SJTLT DPOGSPOUJOH UIF CVTJOFTT BOE QSPWJEFT XPSLBCMF TPMVUJPOT GPS FBDI t "QQPJOU B $IBSUFSFE "DDPVOUBOU UP UIF #PBSE PG %JSFDUPST 8IZ XPVME ZPV FOUFSUBJO TUBSUJOH B CVTJOFTT XJUIPVU B $IBSUFSFE "DDPVOUBOU JO UIF GSBNF )F TIF XJMM CF BCMF UP DPOEVDU BMM UIF OFDFTTBSZ GJOBODJBM

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PQFSBUJPOT FWBMVBUF 1 - NBLF TUSBUFHJD GJOBODJBM EFDJTJPOT BOE BMTP SFBTTVSF UIF MFOEFS UIBU UIF CPSSPXFE TVNT BSF JO TBGF IBOET t ,FFQ B QSPQFS TFU PG BDDPVOUT BOE IBWF UIFN BVEJUFE CZ B RVBMJGJFE QSPGFTTJPOBM 5IJT JT UIF LFZ JOWFTUPST BOE SJTL QBSUOFST OFFE UP VOEFSTUBOE IPX ZPVS CVTJOFTT JT QFSGPSNJOH 8IBU T NPSF JU T BMTP UIF LFZ ZPV OFFE UP VOEFSTUBOE IPX UIF CVTJOFTT JT QFSGPSNJOH (FU JOUP UIF IBCJU PG QSFQBSJOH BDDPVOUT FBSMZ PO CFGPSF UIF CVTJOFTT HSPXT BOE HFUT NPSF DPNQMJDBUFE t 6TF 5SBEF $SFEJU JOTVSBODF " TNBMM PS SFDFOUMZ TUBSUFE CVTJOFTT DBO CF IJHIMZ WVMOFSBCMF UP OPO QBZNFOU PG SFDFJWBCMFT BOE 5SBEF $SFEJU *OTVSBODF QSPUFDUT UIFTF TVNT 4P JO FGGFDU UIF CPPL PG SFDFJWBCMFT CFDPNFT DPMMBUFSBM NFBOJOH UIBU BHBJO UIFSF T BO FYUSB DPNGPSU GBDUPS GPS MFOEFST BOE JOWFTUPST t 'JOE NVMUJQMF JOWFTUPST )BWJOH B DMVTUFS PG JOWFTUPST TQSFBET UIF SJTL BOE NBLFT ZPVS CVTJOFTT NPSF BUUSBDUJWF CFDBVTF FWFSZPOF LOPXT UIFJS JOUFSFTUT BSF CFUUFS QSPUFDUFE *U BMTP NFBOT ZPV DBO SFRVFTU TNBMMFS TVNT XIJDI JODSFBTFT ZPVS DIBODFT PG TVDDFTT TJODF FBDI JOWFTUPS GBDFT MFTT SJTL FYQPTVSF One last point: do you have the staff in place with the experience to handle the larger sums that are going to become available if your application succeeds? This is one of the key factors that risk partners and investors will look for - because handling, for example, two million dollars is a very different challenge from handling two hundred thousand. It may be the case that your existing team lack credibility in this respect - so be prepared to take action and build a team that’s in line with your business ambitions.

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BUSINESS TOOLKIT

SAFEGUARDING YOUR BUSINESS FOR THE FUTURE

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BUSINESS TOOLKIT

Success through ‘Succession’ planning Succession planning is a key step for any SME owner or director. Why? Because SMEs, more often than not, depend substantially on one or two ‘central’ figures for all their major day-to-day operations and decision making processes. In fact, you may even come across a scenario where one senior level executive is responsible for bringing in all the revenues within an SME. So, what happens when this person is removed from the equation? The answer is simple – the business suffers huge losses, bad reputation, loses key clientele, and in a worst case scenario – shuts down! The ‘Opportunity Pyramid’ One of the biggest business myths of life in an SME is that succession planning should begin only when the business owner plans to leave the business. The reality is that such planning should kick-in years before the actual need arises. Or how else will you have sufficient time to identify, train and nurture your successor? How will you ensure that your company continues to follow the same core values you had set in place at the start of the business? In fact, the longer you wait to start succession planning, the lesser routes you will have to choose from. What’s more, there are chances that your family – especially the nonactive members – may not receive their rightful share of the business.

It’s natural for you, as a business owner, to expect continual growth and success for your organisation. But, while you hope for the best, you might forget to prepare for the worst! Succession planning is a great tool that can help you protect your business in the case of any sudden, unexpected changes, and here we highlight why it’s fundamental for business continuity…

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Start today… A good succession plan takes into account three primary elements – the business owner, the owner’s family, and other stakeholders such as employees, investors, senior level management and so on. And, the right approach is to think of your succession plan as an ‘action plan’ you are leaving behind for these three parties to follow, in case you have to withdraw from the business due to unforeseen circumstances. At the same time, it’s important not

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to confuse succession planning for a ‘disaster-recovery’ plan. It’s not something that can be implemented overnight; it’s a plan that develops change over the long-term. Here, we highlight the basic fundamentals of writing your succession plan: The ultimate goal: Most business owners get involved in their day-to-day operations and often forget to set a goal or endpoint they want to see their business achieve. Your succession plan should address your vision for the company, growth strategies, expansion plans, sustainable practices or CSR activities (if any) – for instance, do you want to contribute a sizeable portion of your business earnings to a charitable cause? Of course, it’s crucial to discuss this ‘ultimate goal’ with other stakeholders and employees to ensure they are on the same page. Value of your company: Succession planning is the right time for you to ascertain the true market value of your business. This monetary value could be a figure that you’ve unanimously decided within the organisation, or you could have a certified accountant or branding specialist do the needful. Determining how much your business is worth is key to understanding how you want to divide it across the several stakeholders within the organisation. As simple as that. Moreover, if you decide to go down the route of selling your business – you will be prepared with a sale price! Managing control: As a business owner, it’s often hard to come to terms with the fact that you have to eventually let go and hand over all control to a suitable successor. This is another critical aspect that your succession plan needs to cover. It should address issues such as: Would you still have control of the business? Who would

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be the suitable successor of the business? How would the distribution of assets take place? Would you pass on ownership to a successor but still maintain control? If you do indeed pass on control, how would you distribute responsibilities amongst your successors? It’s also worth noting here that you would have to provide your successor/s with proper, intensive training and mentorship over a reasonable period of time in order to prepare them to take reigns of the business when the time comes. Lastly, there needs to be a timeline clearly mentioned for such transition.

AN EFFECTIVE SUCCESSION PLAN HAS THE ABILITY TO MAKE ANY TRANSITION AS SMOOTH AS POSSIBLE, WITHOUT DISRUPTING BUSINESS OPERATIONS

Identify your successor: Many believe that family will inherit and take over the business – which can of course be disastrous. However, this is not true in most cases and it’s critical to identify your successor. Is this someone from within your firm like your existing CFO or CMO? Or perhaps you’d like to hire someone completely new, in the case of which you would have to lay down a detailed recruitment and hiring strategy. Business values: Every business owner has his or her own beliefs and business values which are incorporated into the organisation. These values are reflected across all business transactions and form the basis of all employee activities. Therefore, including these business values in your succession plan will allow your successor and stakeholders to understand the foundations of your business, and encourage them to keep these alive in the future as well. Adaptability: An effective succession plan has the ability to make any transition as smooth as possible, without disrupting business operations. However, changes are a fact of SME life. So, taking into consideration sudden changes and allowing for a certain degree of flexibility is something to keep in mind when

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BUSINESS TOOLKIT

writing a succession plan. Having said that, it’s important that your succession plan is realistic to begin with and sets in place goals that are truly achievable and within the scope of the business. The role of insurance: One of the most significant areas of all is insurance. There’s no doubt that this is a powerful tool in the succession planning process. Two very popular types of insurance which business owners opt for when planning for succession are life insurance and key man insurance. Key man cover provides the business with the buffer funds to manage a difficult transition – such as the loss of a business owner or key person – and allows you to source a suitable long-term replacement. Understand the legal implications: Since there isn’t tax involved in this part of the world, you don’t have to worry about any legal tax issues. However, your plan will have to be legally sanctioned in case of challenge from family members. It will also have to be pre-approved by the Board of Directors within your business. Finally, ask yourself the following two questions about your succession plan: - Does it fulfil all the interests of the business owner? - Is it in line with the needs of other stakeholders in the business? If the answer to both is yes, you are on the right track! Key factors: In an online article on Harvard Business Review, Marshall Goldsmith – a leading business educator and coach – explains four factors crucial to efficient succession planning: 1. Change the name of the process from Succession Planning to Succession Development. Plans do not develop anyone – only development experiences develop people. We see many companies put more effort and attention into the planning process than they do into

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the development process. Succession planning processes have lots of todos – forms, charts, meetings, due dates and checklists. They sometimes create a false sense that the planning process is an end in itself rather than a precursor to real development. Many humans fall into the same trap regarding physical fitness. We have may have fantastic plans in place to lose weight. We may be very proud of our plans, which include detailed daily goals for diet, alcohol consumption, and exercise. And if our execution were half as impressive as our planning, we would be very svelte. Our focus should be on weight loss, not planning for weight loss. 2. Measure outcomes, not process This change of emphasis is important for several reasons. First, executives pay attention to what gets measured and what gets rewarded. If leadership development is not enough of a priority for the company to establish goals and track progress against those goals, it will be difficult to make any succession planning process work. Second, the act of engaging with senior executives to establish these goals will build support for succession planning and ownership for leadership development. Third, these results will help guide future efforts and mid-course corrections. The metrics a company could establish for Succession Development might include goals like the percent of executive level vacancies that are actually filled with an internal promotion vs. an external hire, or the percent of promotions that actually come from the highpotential pool. Too often, we find companies measure only the percent of managers that had completed succession plans in place. 3. Keep it simple. We sometimes find companies adding excessively complex assessment criteria to the succession planning process in an effort to improve the quality of the

assessment. Some of these criteria are challenging even for behavioural scientists to assess, much less the average line manager. Since the planning process is only a precursor to focus the development, it doesn’t need to be perfect. More sophisticated assessments can be built into the development process and administered by a competent coach. 4. Stay realistic. While development plans and succession charts aren’t promises, they are often communicated as such and can lead to frustration if they aren’t realistic. Bottom line, don’t jerk around high performing leaders with unrealistic development expectations. Only give the promise of succession if there is a realistic chance of its happening! What not to do Although the basis of succession planning is preparing your business for change, remember that too much change isn’t ideal either. For instance, if you decide to step down from your business, and have a successor ready to take charge – someone you’ve hired from outside the business, a good idea would be to ensure that the rest of the senior level management team remains unchanged. The key is to maintain a balance between reinventing your business and not rocking the boat too much! Being prepared Implementing these simple, yet effective, steps will strengthen the longevity of your business, keep your stakeholders happy, give your business a better future and help you make a long-lasting impression on your potential investors. More importantly, it gives you sense of satisfaction that your family is financially secure in case of any sudden changes. Finally, always remember the words of the iconic Benjamin Franklin, “By failing to prepare, you are preparing to fail.”

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DOWNTOWN

A SENSE OF TURBULENCE

Born in Beirut in displaced Palestinian family, Mona Hatoum has lived and worked in London for almost 40 years. Her work is diverse and jarring, through her reimagining of everyday objects often made disturbing by unexpected changed in scale. A major exhibition, Turbulence, at Mathaf: Arab Museum of Modern Art, running until mid-May, offers a chance to experience one of the Arab world’s most distinguished and talented artists through a major retrospective of three decades of work.

Words and photography by Chris Howlett

Hot Spot, 2013

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DOWNTOWN

Curated by Sam Bardaouil and Till Fellrath of Art Reoriented, the exhibition’s premise builds on the artist’s topical work Turbulence (2012), a 4x4 meter square composed of thousands of glass marbles laid directly onto the floor. Placed exactly at the centre of the exhibition, this installation lies at the heart of a linear but non-chronological trajectory whereby a number of unexpected juxtapositions echo the complexity through which the artist has managed to challenge and at times disturb our experience of the ordinary. The choice of the notion of turbulence as a conceptual framework for the exhibition is derived from the thematic and formal dualities inherent in the artist’s work. These render it familiar yet perplexing, inviting yet impenetrable, or, in other words, turbulent. On an internal level, turbulence echoes the artist’s questioning of self whilst grappling with issues of alienation and displacement. ([WHUQDOO\ LW LV D UHÀHFWLRQ RI KHU questioning of notions of belonging DQG FROOHFWLYH PHPRU\ $QG ¿QDOO\ turbulence can be seen as resulting from the artist’s on-going inquiry into ways of expanding the formal and material qualities of artistic expression.

“Mona Hatoum is a central figure in contemporary art and a symbol of art’s progress during times of personal and geopolitical conflict� - HE Sheikha Al-Mayassa bint Hamad bin Khalifa Al-Thani, Chairperson, Qatar Museums Authority

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Undercurrent, 2004

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DOWNTOWN

On Display Since 1983, Mona Hatoum has been displaying both her installations and her video performance art pieces on exhibitions around the world. She has been featured in individual exhibitions as recently as 2011 in White Cube in London.

Untitled (wheelchair 2), 1999

A bigger splash, 2009

Some of her other solo exhibitions to note include Centre Pompidou, Paris (1994), Museum of Contemporary Art, Chicago (1997), The New Museum of Contemporary Art, New York (1998), Castello di Rivoli, Turin (1999), Tate Britain, London (2000), Hamburger Kunsthalle, Kunstmuseum Bonn, Magasin 3, Stockholm (2004) and Museum of Contemporary Art, Sydney (2005), Parasol Unit, London (2008), Darat Al Funun, Jordan (2008), Fondazione Querini Stampalia, Venice (2009) and Beirut Art Center (2010). She has also participated in a number of recognised group exhibitions, including The Turner Prize (1995), Venice Biennale (1995 and 2005), Biennale of Sydney (2006) and the Biennale of Montreal: Drone the automated image (2013).

+ and -, 1994

Roadworks, 1985

Drowning Sorrows, 2001-2002

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Bukhara, 2007

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DOWNTOWN

This is the artist’s largest solo exhibition to date in the Arab world, consisting of more than 70 works ranging from large-scale room installations to smaller works on paper and sculptural objects. It also includes some of the artist’s kinetic installations and is punctuated with a number of the artist’s photographs as well as documentations of early performances, highlighting the diversity of artistic undertakings that span her career. We would like to thank Mathaf: Arab Museum of Modern Art for its valued support.

“I’m often asked the same question: What in your work comes from your own culture? As if I have a recipe and I can actually isolate the Arab ingredient, the woman ingredient, the Palestinian ingredient. People often expect tidy definitions of otherness, as if identity is something fixed and easily definable” - Mona Hatoum

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Impenetrable, 2009

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Together we make legal matters as easy as solving this maze What is OQOOD? OQOOD is a 70% subsidised legal services programme offered by Enterprise Qatar to Qatari entrepreneurs and SMEs. The programme entails the provision of intellectual property rights and trademark registration, and the development of contracts, agreements and article of association. The objective of this programme is to give Qataris access to subsidised, professional legal services to ensure a sound legal framework for their business. Who is eligible? OQOOD is offered to Qatari entrepreneurs and SMEs who need assistance in developing contracts and agreements and who are interested in the intellectual property and trademark registration. Follow us on

To apply, please contact Enterprise Qatar Tel: 4012 5000 | Website: www.eq.gov.qa E-�mail: oqood@eq.gov.qa | Fax: 4012 5001 Address: The Gate, Bay Tower 4 – Floor: 16, West Bay, Doha. Terms and Conditions apply

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