SME Advisor Middle East - July 2013

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Publisher Dominic De Sousa Group COO Nadeem Hood Managing Director Richard Judd richard.judd@cpimediagroup.com +971 4 440 9126 EDITORIAL Senior Editor Paul Godfrey paul.godfrey@cpimediagroup.com +971 4 440 9105 Sub Editor Rushika Bhatia rushika.bhatia@cpimediagroup.com +971 4 440 9115 ADVERTISING Commercial Director Chris Stevenson chris.stevenson@cpimediagroup.com +971 4 440 9138 Media Sales Executive Emma Hughes emma.hughes@cpimediagroup.com +971 4 440 9120 Events Sponsorship Manager Gill Fairclough gill.fairclough@cpimediagroup.com +971 4 440 9148 PRODUCTION AND DESIGN Production Manager James P Tharian james.tharian@cpidmediagroup.com +971 4 440 9146 Circulation Manager Rajeesh M rajeesh.nair@cpimediagroup.com +971 4 440 9147 Head of Design Fahed Sabbagh fahed.sabbagh@cpimediagroup.com +971 4 440 9107 Designer Froilan A. Cosgafa IV froilan.cosgafa@cpimediagroup.com +971 4 440 9107 Photographer Jay Colina Abdul Kader Pattambi DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developer Abey Mascreen online@cpidubai.com +971 4 440 9100 PUBLISHED BY

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he latest and trendiest metaphor for describing a successful SME is to call the business a ‘Gazelle’. Technically, this means that it’s one of an elite group of super nimble-footed firms that are able to deliver a minimum of 20 per cent growth every year for four years. Good for them - that’s a terrific achievement and the result not only of great market capability, service and vision, but says volumes about the way that every key function and department is completely aligned behind the business’ goals. Yet I think we have to be wary of being seduced by the high-performance ‘growth’ model. Growth in itself is not the be-all-and-end-all. It was Tom Peters who said that “if a business wants to stay as it is, and can do so profitably, it doesn’t have to set the world on fire. There’s nothing wrong with staying very much as you are - if that’s what you want.” Of course the key word here is ‘profitably’. If you can be highly profitable just doing what you’re doing, you may not want to invest massive resources in trying to get to the next level. There’s another dimension to this, too. Profit means cash, but it doesn’t in itself mean cashflow. It’s cashflow that’s the real king - and we’re in jeopardy the moment we forget that. When the cash is rolling in, there won’t be any bad debts and you can start investing in fixed assets as well. Which can then be leveraged and mortgaged to generate even more cash. And so on. This is why, from the point of view of a risk-partner lender or an equity investor, it’s the business’ cash flow that speaks volumes about the viability of the investment. Meanwhile, growth for its own sake can be a road to ruin. It means the opposite of cashflow, because it means pouring money into new plans, departments and strategies; it means spending what you have (and probably borrowing more) in order to obtain economies of scale that you may not - a-hem - obtain. Just ask some of the acquisition-hungry conglomerates of the 1990s. Of course, the idea of the ‘Gazelle’ is based on the vision of a company that’s growing profitably, that has lots of cash because it’s growing in the right ways. Everyone would like to be at the helm of a company like that, wouldn’t they? Yet note how the presence of cash in this equation is assumed, not stated; it’s the growth that is heralded as the big goal. So if you had the choice, what would it be - an abundance of liquidity and admirable cashflow, or growth that struggles to be profitable? I hope the articles in this issue of SME Advisor guide you to achieve the former. Good reading! Paul Godfrey Senior Editor

Registered at IMPZ PO Box 13700, Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Al Ghurair Printing & Publishing LLC © Copyright 2013 CPI. All rights reserved. While the publishers have made every effort to ensure the accuracy of all information in this magazine, they will not be held responsible for any errors therein.

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July 2013

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Issue 92

July 2013

CONTENTS

22 Put a spring in your step How good Governance can supercharge your business

EDITOR’S NOTE 03 Paul Godfrey on why cashflow will always trump a ‘growth for its own sake’ mentality. SHOPTALK 10 News and developments impacting SMEs in the region. FINANCE FOCUS 14

The latest financing opportunities for SMEs and allied financial services.

SME ABOUT TOWN 18

Key events attended by SME owners and managers.

BANKING FOR BUSINESS 22

A catalyst for change - how good Corporate Governance can supercharge your business.

MOVERS & SHAKERS 26 Count to 10: an exclusive profile of Neil Petch, Founder and Chairman of Virtuzone.

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CONTENTS

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All the ingredients for success: we meet the all-woman management team at Just Falafel.

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Science or art? The extraordinary career of the media training entrepreneur, Nowshir Engineer.

MANAGING RISK 36

Are you facing the risks, or reaping the rewards? The role of the wealth manager in energising personal and corporate finances.

GETTING FINANCE 40

Show me the money! Saeid Hejazi, CEO and Co-Founder, Wally, on what it took to get the finance behind the region’s smartest app.

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Back to Basics: Dunia Finance’s Sanjay Kao spells out the key do’s and don’ts of the all-important finance application.

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WORKSPACE 52 Performance: Top floor, bottom line. You have everything to gain - Serv corp’s experts explain the cost savings and competitive edge of serviced office space. 56

Form a spark to a flame. An inside view of Microsoft’s pace-setting BizSpark initiative – and what it means for your business.

LEGAL 60 Safe and secure? Al Tamimi & Co. explain the benchmark legislation on information security. INDUSTRY WATCH 62 Survey assesses corporate spending. 63

No scarcity of wealth in the GCC.

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Be a top performer.

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Media trends during Ramadan.

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Big Data to empower travel industry.

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The influence of social media.

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TECHNOLOGY FOR BUSINESS 70 IT trends and tools that are reshaping business in the region. THE NEXT LEVEL… 76 Nature vs. Nurture? We ask if entrepreneurship can really be taught - or are we born with the right genes?

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SHOPTALK

UAE

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n order to keep pace with the rapidly changing technology, Dubai eGovernment Department (DeG) acknowledged its support for the transformation into a smart government in line with the initiative of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and its commitment to the instructions

of His Highness Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of the Executive Council. Dubai eGovernment has started implementation of the initiative using three major tracks – activating all eServices via SmartPhone apps; creating new mGovernment services and finally, inviting government entities to devise unified mobile strategies for transformation into smart government. DeG currently has a package of SmartPhone apps and mobile services including mPay for mobile payment of government services and fees; mDubai for most used government services, eComplain tracking, government news and information; and SMS Dubai for SMS based services between customers and Dubai government. His Excellency Ahmad Bin Humaidan, Director General of Dubai eGovernment, said: “His Highness Sheikh Mohammed’s initiative is based on the leadership’s keenness on customer satisfaction through roundthe-clock government services using the latest technologies based on a clear understanding of their needs, while leveraging the mobile phone; which has

become one of the most widespread devices in the world. According to the latest Google study, the UAE is in the lead worldwide with 62 per cent SmartPhone penetration rate and 18 per cent growth rate annually.” The coming stage will witness a creative competition for providing SmartPhone applications, Bin Humaidan said, noting that the most successful of these applications would be those which provide integrated and easy to use eServices to customers, enabling them to implement these services via their mobile phones without the need to visit the respective government entities, thereby easing their daily transactions with the government. Customers will be satisfied only if these apps provide integrated services so this will require further coordination between government entities and the private sector. He urged the government entities to provide applications that have easy to use features and to focus on meeting customers’ needs by arranging homogenous services in one application instead of focusing on increasing the number of applications and repeating the information contained in them.

'XEDL &KDPEHUoV QHZ LQLWLDWLYH During a meeting at its headquarters and in the presence of visiting members of the Dubai SME, the Dubai Chamber of Commerce and Industry announced the allocation of a minimum 10 per cent of its various departments’ annual procurement contracts for members of the Government Procurement Programme (GPP). The move came as part of Dubai Chamber’s commitment to the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice-President and Prime Minister and Ruler of Dubai, to allocate five per cent of the government entities’ annual purchasing

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budget to participants of the Programme. Essa Ali Al Zaabi, Senior Vice President, Institutional Support Sector, Dubai Chamber, said that the idea behind the meeting was to strengthen bilateral ties between Dubai Chamber and Dubai SME, and to demonstrate the Chamber’s commitment to support the Government Procurement Programme. He highlighted Dubai Chamber’s policy of purchasing green products and its promotion of ecofriendly materials which he said is a priority with the Chamber as the organisation is a strong supporter of sustainable business practices. The Senior Vice President of Dubai Chamber’s Institutional

Support Sector emphasised the Chamber’s keenness in providing value-added services to the business community while emphasising its strategic role as a conduit between the public and private sectors. He also highlighted the Chamber’s support to the private sector which he said was one of the main contributors to the emirate’s economic growth. Furthermore, he underlined the Chamber’s commitment to support important projects by the nationals due to their contribution to sustainable business practices in the emirate. The two sides also discussed enhancing services, consultations and

During the announcement

administration training, computer equipment and its programmes, PR and Marketing, Health, Safety and Environment and Stationery. Members of the Dubai SME held one-to-one meetings with Dubai Chamber directors as well as showcased their products and offered information about their services which could be procured by the Chamber.

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His Excellency Sami Al Qamzi, Director General of DED

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n a staggering 171 per cent increase from last year, Dubai SME revealed that 2,963 SMEs have been nominated for the 2013 edition of the Dubai SME100 ranking. Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, said: “We are delighted at the substantial increase seen in Dubai SME100 applications compared

to 2011. It shows the level of interest in the ranking and its growing market recognition. We hope that more SMEs will apply for the ranking as it will help them gain greater value in the market, as demonstrated by the 2011 batch of Dubai SME100 companies.” Registrations for the ranking were opened in January 2013 and since then have been witnessing a high level of interest and response from the SME community. The total number of SME registrations and nominations in 2013 represent about four per cent of the eligible SMEs with at least three years of operations. Considering industry averages, the 2013 nominees represent an estimated output of AED 53.3 billion, estimated value-add of AED 16.2 billion, and a workforce of around 93,500. Sector-wise, 53 per cent of the SMEs nominated are from the trading sector, 36 per cent from the services sector and 11 per cent from the manufacturing sector.

His Excellency Sami Al Qamzi, Director General of DED, said: “The Government of Dubai has launched various initiatives aimed at promoting entrepreneurship and SME development under its SME five year plan. This commitment to promote entrepreneurship and SMEs is in the DNA of Dubai, supported and led by our socio-economic stability, openness and visionary leadership. Dubai has moved to the next level of growth, and in our renewed dynamism and development outlook, SMEs play a strategically significant role in creating new value-add to the economy of Dubai and the UAE.” In the next step, Dubai SME will begin shortlisting qualified SMEs for evaluation before the ranking of the top 100 SMEs. Site visits will also be conducted to evaluate the nominees’ focus on innovation, human capital development, international orientation and corporate governance. Post ranking, the SMEs are given specialised capability development training in such critical areas as investment development, corporate governance, valuation, legal support and risk management. The ranking is valid for two years.

(PSRZHULQJ ZRPHQ HQWUHSUHQHXUV The first edition of the Emirati Young Women Entrepreneur Leadership Forum was launched as a joint effort by Zayed University and Dubai Business Women Council (DBWC) under the patronage of Her Highness Sheikha Latifa Bint Mohammed Bin Rashid Al Maktoum. Through the Forum, aspiring Emirati women entrepreneurs will gain advice and business insights which will help boost their entrepreneurial spirit. Raja Easa Saleh Al Gurg, President of Dubai Business Women Council, who was the keynote speaker at the Forum, said: “Entrepreneurship remains one of the key elements in our continuing thrust for women’s empowerment in the UAE. By encouraging more women to be entrepreneurs, we are harnessing the largely untapped potential of women to become key contributors to the social and economic development of the society. DBWC is therefore looking forward to further strengthen our partnership with Zayed University and other like-minded institutions to organise several more initiatives that promote entrepreneurship among women. The Forum has actually received a very

enthusiastic response from women of different social status, and this is a clear indication that we are moving in the right direction towards creating a new generation of successful women entrepreneurs in the UAE.” Founded in 2002, DBWC motivates women to be productive members of society, while encouraging role models to rise up from the ranks and inspire other women around the world, especially in the Arab region, to discover their true potential.

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SHOPTALK

UAE

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he first round table discussion on technology evaluation, organised by Micro Automation Industries (MAI), a Jebel Ali-based manufacturer and a member of Dubai SME100, in cooperation with Dubai SME, identified the methodologies and criteria to evaluate and select advanced technology appropriate to be used in the UAE. The round table, part of a series of discussions scheduled to be held throughout the year with the Dubai SME members, was attended by 30 UAE-based SMEs. The event highlighted the fact that Dubai can be transformed into a primary

The discussion on technology evaluation

science and technology hub in the Middle East through technology evaluation which will encourage small and medium enterprises (SMEs) to invest in innovation and manufacturing. The event also covered other key aspects such as the techniques used in evaluation from developed countries; suggested framework for evaluation; and the role the government can play to attract critical added value technologies emerging in Dubai. Furthermore, it tackled challenges that Dubai is currently facing in the technology sector such as the

lack of support from financial institutions to SMEs. Technology in Dubai can benefit from vast opportunities due to an array of advantages such as a well-developed infrastructure, easy access to the world market, existing metropolitan city, and far-advanced electronic government (e-government). Dubai’s social environment facilitates smooth cohesion of multinational technical experts and highly qualified researchers. Most importantly, the acceptance of ‘Made in UAE’ as quality mark products in Europe, which is a great advantage.

Dr. Abdulhaleem Aman, Technology Advisor at Micro Automation Industries in Germany, talked about the two aspects required in evaluating technology – technical aspects for assessing which technology is suitable and commercial aspects to accept a particular technology from financial points of view. r "NPOH UIF HVJEFMJOFT TFU for technical consideration include innovation; competitiveness in the UAE; impact upon the business as a whole; creativity; relevance to other technologies; added value in products; and possible effects on environment. r ǔF HVJEFMJOFT TFU GPS commercial aspects include market value of physical and tangible assets; cost of the know how; investment risk and expected outcomes; reasonable and justified budgeted cost; and potential high commercial returns for Dubai.

:RUOGoV WDOOHVW FRPPHUFLDO WRZHU LQ 'XEDL The tallest commercial tower in the world is on the agenda for the Dubai Multi Commodities Centre (DMCC) – the Government Authority dedicated to establishing Dubai as the global gateway for commodity trade. Currently, almost 7,000 members from startups to multinationals operate from the DMCC Freezone. With 65 mixed-use commercial and residential towers and over 180 retail outlets in operation, there are over 65,000 people working and living within the development. On average, DMCC welcomes over 200 companies per month to its Freezone, more than six companies per day. Ahmed Bin Sulayem, Executive Chairman of DMCC, said: “When we

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announced the plans to build Almas Tower in 2002, the Middle East’s tallest commercial tower and DMCC’s headquarters, the entire office space across 63 floors sold out to DMCC end users, mostly in the diamond business, in just a few hours. “The world’s tallest commercial tower and the DMCC Business Park are the next natural steps to ensure we continue to welcome companies to the Freezone as demand grows – particularly large regional corporations and multinationals – in the near future. The initiative is designed to further strengthen Dubai’s position as the global hub for commodities trade and enterprise. “Over the past four years DMCC has attracted more than 4,000 new

companies to the Freezone – 90 per cent of which are new to Dubai. In 2013 we have accelerated this growth, with an average of 200 new companies joining DMCC every single month. This increased demand further demonstrates not only the confidence in DMCC and Dubai, but also underlines the need for new commercial space.” Currently in the concept design phase, the DMCC Business Park and the world’s tallest commercial tower will cater to large corporations and multinationals that require significant floor space to buy or rent. The Business Park will comprise of 107,000 square metres of premium commercial and retail space.

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ubai SME, the agency of the Department of Economic Development (DED) mandated to develop the small and medium enterprise (SMEs), organised a seminar recently on best practices that companies anywhere can follow to improve their work environment. The seminar was in partnership with Great Place to Work® Institute (GPTW), a global research and management consultancy that recognises the best workplaces in over 45 countries worldwide and provides premier business and advisory services.

David Robert, CEO of Great Place to Work Gulf said: “We are honoured to partner with Dubai SME to share with UAE businesses the best practices of the world’s best workplaces so they may too foster hightrust workplaces in which the intelligence of their staff multiplies. The past three years have proven that the region’s culture aligns beautifully with the qualities that make companies great. In our estimation, it won’t be too long before the UAE stands as a role model and gold standard for great workplaces globally.” By studying the world’s best workplaces, GPTW has learned that trust is the key differentiator among top

companies and that the same applies to all organisations regardless of geography, culture, industry, size or age. Raising the level of trust in the workplace inevitably leads to improved business results since cooperation and innovation depend on trust. During the seminar, participants – CEOs and HR executives from companies under the Dubai SME100 ranking – learned about GPTW’s history, model and methodology. They also learned about best practices from best companies and how they can begin their journey to creating a great workplace environment based on trust in their own organisations.

'XEDL 60( WR KRQRXU WRS EXVLQHVVHV SMEs in the region will now have a chance to gain recognition and take their business to the next level through participation in the eighth cycle of the ‘Mohammed Bin Rashid Award for Young Business Leaders’ (YBL). The YBL Award, launched by Dubai SME under the patronage of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, aims at creating a competitive environment amongst young entrepreneurs in the UAE and the Arab countries. It recognises those individuals and organisations who have aided in the development of entrepreneurs in the UAE and the Arab world. Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME, commented: “The Mohammed Bin Rashid Award for Young Business Leaders has seen growing interest and participation since its launch in 2003. The Award reflects our leadership’s vision to advance the SME

Abdul Baset Al Janahi, Chief Executive Officer of Dubai SME

sector and acknowledge the contributions of individuals and organisations not only in the UAE but also in the Arab world towards SME growth.” Application procedures:

1. To be eligible for the YBL Award, a business should be legally registered and be based and/or operating in the UAE or the Arab country of origin, in addition to being fully owned by citizens. The age of the business should be as follows: Home-based business (Intelaq) in Dubai – up to three years; Startup business – six months to two years; Established business – two years and above.

Abdul Baset, CEO of Dubai SME, said: “SMEs should continually study and adopt best practices to make their organisations great places to work. Human resources play a significant role in the growth and success of SMEs and are widely recognised as a differentiator between businesses. Dubai SME is pleased to work with a renowned institution such as Great Place to Work Institute, which has spent over 30 years tracking the leaders and learning from their successes. I hope our SMEs were able to open their minds and learn how to adopt simple practices through this seminar.”

2. Applicants should submit a project summary (brief on the business or personal experience in managing the project); audited financial report for the last two years (for Established businesses) or internal financial report (for Home-based businesses in Dubai and Startup businesses); trade licence copy valid for at least three months; valid passport copy of the owner and partners, if any, and photographs and brochures as available on the business operations, equipment and machines. 3. The evaluation of the applications progresses through different stages such as application stage, preliminary short listing, site visits, second stage short listing, and panel interview before the final results are announced. After each stage, the applicants will be informed whether their applications have been qualified for the next stage or not. For the first time, the entire registration process, including submission of supporting documents, will be done online this year. You can register for the award on the website www.smeawards.ae till September 2013.

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FINANCE FOCUS

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n what comes as good news for the banking industry, a recent study published by the Boston Consulting Group (BCG) revealed that the GCC banks’ corporate divisions are at peak levels in terms of revenues and net profits. In its Corporate Banking Benchmarking Report, BCG highlighted a ‘multi-speed world’ for the corporate banking divisions of banks across the globe and highlights positive growth for GCC markets in this context. The performance of a set of leading GCC banks, participating in BCG’s corporate banking benchmarking,

were examined. At 12 per cent, this set of GCC corporate banks have witnessed some of the highest growth rates between 2009 and 2011 among all geographies surveyed. Globally, while banks in Europe are still reeling under pressure in the aftermath of the financial crisis with limited growth or declines in revenues, corporate banking divisions of banks in the GCC, USA, Asia, ‘Rapidly Developing Economies’ (RDEs) and ‘Advanced Resource Economies’ (Canada and Australia) are showing improved performance with high single-digit and even double-digit growth.

However, GCC corporate banks appear to be lagging behind when compared on the basis of other key metrics like return on regulatory capital. Close to two-thirds of GCC corporate banking divisions are not returning the generally expected 16 per cent cost of equity hurdle. “While banks have been able to increase their revenues and even profits by extending more credit and keeping loan losses in check, they have been limited in their options of diversifying their source of revenues away from standard credit offerings. This has led to no real improvement in the return on regulatory capital in spite of increasing revenues,” said Markus Massi, Partner and Managing Director, BCG’s regional leader in Wholesale Banking and Capital Markets and author of the study. The report highlights that corporate banks will need to adopt a segmentspecific approach to setting target returns in order to create incentives aligned with equity investors’ interests, as all segments cannot be measured against one single target ROE hurdle rate. The study was based on BCG’s corporate banking benchmarking performed with leading banks both in the region and globally, using non-published banks information in addition to the corporate banking segment data published in the annual reports of the banks.

(QMR\ n%XVLQHVV 5HZDUGVo ZLWK GX du introduced its new business loyalty programme called ‘Business Rewards’, which gives business customers up to 15 per cent of their total monthly spend in rewards. These rewards can then be redeemed for the latest smartphones or other devices for their business. Any business customer, who has du business mobile services and is payment responsible, can enjoy the

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benefits accrued on the total spend, including mobile, fixed and other services.

“The number of customers using our business services has seen a healthy growth rate over the past three years and continues to grow as even more business-savvy individuals and companies explore the communication possibilities that we are able to offer them,” said Hatem Bamatraf, Executive Vice President, Enterprise, du. “To add even more value to our services, we have introduced the Business Rewards

programme as a result of which our customers can accrue and enjoy reward points that can be redeemed for the latest smartphones or other devices.” To activate the Business Rewards programme, customers just have to SMS BR to 1133. Once activated, customers can start earning points against billed services. Points earned during the month have a validity of 24 months.

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ith an aim to foster the growth of local businesses and further facilitate international trade, Dubai Chamber of Commerce and Industry announced that it has started accepting credit cards issued overseas towards the payment of services offered to its local and international customers. The total number of transactions and e-services provided by Dubai Chamber in the first half of the year reached 427,545 compared to 380,685 during the same period last year, registering a growth rate of 12.3 per cent. These statistics highlight the high demand for e-services and their significance, especially to businesses. Previously, Dubai Chamber honoured credit cards issued by local banks. However, its move to begin accepting globally issued credit cards comes as a part of its commitment to develop its payment system in line with the technological advancement of Dubai. Furthermore, it also promotes the emirate’s e-Government initiative. Welcoming the new payment system, His Excellency Hamad Buamim, Director General, Dubai Chamber, said that this latest move will directly contribute to serving a wide range of the Chamber’s clients both locally and internationally. He added that the new feature serves the Chamber’s efforts in developing its

services for the benefit of the business community besides serving its strategic objectives of creating a favourable business environment and promoting Dubai as an international business hub. Other services

Dubai Chamber has earlier deployed next generation suite of software applications and, to enhance its leadership in offering best services to its customers, has started issuing ATA Carnets online and also introduced new technology to allow members to print certificates of origin and e-signatures to prevent counterfeiting, has expanded its IT network from 1GB to 10GB, updated its servers, and has partnered with Dubai Department of Economic Development to offer integrated online services on both the organisations’ websites to their stakeholders. Enhancing its leadership in offering best services to its customers, the Chamber also replaced its existing Oracle e-business suite with Oracle Fusion Apps and Siebel’s Customer Relationship Management (CRM) solutions thus becoming the first organisation in the Middle East to transform its business processes with the new system including Financial, Procurement and Inventory and Human Capital Management suites.

1DEEHVK DFKLHYHV IXQGLQJ VXFFHVV The virtual skills marketplace, Nabbesh.com, successfully reached its funding target only 12 days after it first launched its search for capital on Eureeca.com – the global crowdinvesting platform for SMEs and growth businesses. Consequently, it became the first business to raise capital through the website in exchange for equity. Nabbesh’s funding proposal called for a minimum investment of USD 100 awarding each investor a share in the business. Within four days of its proposal being uploaded on the platform, Nabbesh achieved 50 per cent of its funding target and eventually closed its funding round with 23 investors including fans, followers, clients as well as other angel investors on Eureeca. Nabbesh’s scalable business model, sound growth strategy and launch of a flexible employment concept for the region were key aspects that made it an attractive proposition to investors. Loulou Khazen Baz, Founder & CEO of Nabbesh said: “We are thrilled to have Nabbesh funded so quickly. For an innovative and disruptive business like ours, crowdinvesting is an equally innovative means of raising capital. Nabbesh has an extensive user network and strong social following which proved to be advantageous in our search for capital. Eureeca provided us with the perfect platform to really harness this existing community of supporters and let them be a part of our growth.” Furthermore, Nabbesh will be utilising the capital raised towards its hiring requirements as well as to expand the company’s network of freelancers and employers to enable more jobs and connections across the region. Meanwhile, the speed of Eureeca’s success in facilitating funding for Nabbesh has increased attention toward the platform and has proved the feasibility of its crowdinvesting model. SMEs within the region can look at Eureeca as an alternative financing solution. Registration for both entrepreneurs and investors on the site www.eureeca.com is free.

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FINANCE FOCUS

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ally, the personal finance app, announced its first phase of funding of USD 400,000 at ArabNet’s Digital Summit in Dubai. “Securing our first round of funding is an important milestone for the company, and one which will allow us to scale and expand to meet the demands of our global users. This funding will go towards product development and engineering. Our key aim is to create the right product, bringing it closer to a complete personal financial solution, and achieve our next milestone of one million active users globally,” said Saeid Hejazi, CEO and Co-Founder, Wally. The app helps users, anywhere in the world, to keep track of what they spend and the details in their own currencies. The ad free app is available free to download on the iPhone Apple app store. “This update is more than just a new feature, it marks the next level for Wally. We started with the logical first

Saeid Hejazi, CEO and Co-Founder, Wally

step: creating the best tool to record expenses in an easy and smart way, and building up to the inevitable release of the income and budgeting feature. The number one requested feature by users is now live, giving them the ability to plan their savings and work towards their personal financial goals,” said Baher al Hakim, Co-Founder, Wally.

“Wally is exciting because of its potential as a global success story. When we plan our conferences, this is precisely the kind of company we hope to see emerge, getting us that step closer to putting the region on the technology map. I’m excited to see where Wally goes next,” said Omar Christidis, Founder, ArabNet.

n)XQGLQJ )XQGDPHQWDOVo IRU \RXU 60( funding to an interactive audience of SME owners. Some of the key factors that panellists highlighted during the event were:

Identifying the lack of adequate finance as a key barrier to the success of an SME, the latest edition of the TECOM SME Builder, organised by Dubai Knowledge Village,

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was themed, Funding Fundamentals – developing investment capabilities and finding the right funding. The event had top industry expert sharing valuable insights on getting

1. Books of accounting: Experts at the event emphasised the importance of fully updated financial statements in the process of acquiring funding for your SME. Having a clear record of your day-to-day accounting procedures helps boost investor confidence. It also shows that you have a way to map your progress and ascertain the financial viability of the business.

2. Corporate governance: One of the main areas that SMEs should concentrate on, but haven’t, is that of corporate governance. An independent set of external directors bring a high-level of expertise and business acumen with them that reflects very well on an SME’s funding application. 3. Choosing the right investors: The panellists urged SMEs to select investors that have a mind-set similar to theirs. Investors need to fully understand the goals and values of the SME as well as the SME owner.

July 2013

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SME ABOUT TOWN

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he Business Park, a free zone office complex and a key component of Dubai World Central (DWC) held an educational seminar showcasing the state-of-the-art facilities and strategic advantages that it offers to companies. The event focused primarily on UAEbased legal consultants and law firms. DWC’s Business Park consists of 11 commercial buildings offering office

spaces that can be configured to client specifications. Clients can not only benefit from flexible commercial lease terms, 100 per cent ownership and availability of free zone and non-free zone trade licences and visas, they can also take advantage of the state-of-the-art infrastructure of DWC, the easy accessibility to Al Maktoum International Airport, and the proximity to main highways.

During the event

*RRJOHoV ZRUNVKRSV EROVWHU HQWUHSUHQHXUVKLS UAE-based entrepreneurs and startups enjoyed business workshops hosted by Google for Entrepreneurs at the Google offices in Dubai. A joint initiative by Google and AstroLabs, the workshops aimed to offer mentorship to the most

18

promising startup and assistance in creating a network of communication between entrepreneurs. The workshops discussed delivering premium customer service, digital marketing campaigns, and best practices on AdWords

The Business Park also includes the Business Centre, a fully equipped business complex located in the DWC headquarters, offering a range of smart office solutions, including executive offices and dedicated and shared desk options. Paolo Serra, Director at DWC’s Business Park, said: “The Business Park is an integral element of DWC and hosts companies from various trade and business categories. It is therefore imperative that we strengthen our business network and build relations with representatives from key professions so as to give them a thorough understanding of the unique features and the distinct advantages offered by the Business Park.” “Business networking events such as these present the right platform for us to engage in fruitful discussions with professionals and experts from different industries about the facilities and tailored solutions presented by the Business Park. We offer a range of trade licensing options and even the ability to partner with the customer to create mutually beneficial solutions, irrespective of the customer’s business model,” he added.

among other topics of interest to startups. The project focuses on creating networks of communication within the Arab world to provide entrepreneurs with the opportunity to learn from one another by sharing their challenges and solutions. The workshops aim to educate, integrate and fund high-potential startups across the Arab region by providing case studies, interactive discussions and best practices to entrepreneurs. Chris Schroeder, an investor, entrepreneur

and author on MENAbased startups joined the workshops via Google+ Hangouts where he provided his insights and expertise to the audience. The interactive workshops featured presentations by Google executives, as well as representatives from PayPal and Qualcomm among others. The workshops were attended by a diverse crowd with nearly half of all present being women. Several promising startups from Dubai included Duplays, Restronaught, Glambox, Nabbesh, Noviplus, Ananasa, and more. The collaboration between Google and AstroLabs stems from the belief that startups form the cornerstone of healthy economies around the world.

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ccenture Middle East is supporting the company’s global ‘Skills to Succeed’ initiative in the UAE and Saudi Arabia by equipping local people with the skills to find a job or build a business. Accenture has nominated two non-profit organisations - INJAZ UAE, a member of Junior Achievement Worldwide, and the Al-Nahda Philanthropic Society for Women in Saudi Arabia to

receive the funds required to setup skill development programmes. Accenture recently announced that it had exceeded its original ‘Skills to Succeed’ goal of equipping 250,000 people around the world by 2015 with the skills to get a job or build a business. As a result and in order to increase its impact in communities worldwide, the company has set a higher goal: by 2015, it will equip

500,000 people globally with these workplace and entrepreneurial skills. The company surpassed its original goal, set in 2010, by working with global and local nonprofit partners that deliver measurable employment and entrepreneurship outcomes at scale. Accenture has already equipped more than 320,000 people with skills that enable them to participate in and contribute to the economy.

Women’s empowerment

“Accenture is committed to women’s empowerment as part of its global corporate citizenship, and especially in the Middle East,” said Omar Boulos, Managing Director Accenture Middle East. “Al-Nahda has a vision for women to be more active in the development of Saudi Arabian society so the ‘Skills to Succeed’ initiative will help them with this goal.” According to Accenture’s Defining Success research, 90 per cent of professional women in Saudi Arabia as well as 76 per cent of UAE women can ‘have it all’ in terms of a successful career and a full family life. Furthermore, 66 per cent of Saudi professional women and 38 per cent of UAE women said that making a difference in the community defines their success. Whereas, being able to achieve a work-life balance equals success for 64 per cent of Saudi and 67 per cent of UAE professional women. Lastly, technology is allowing 90 per cent of professional women in Saudi, and 80 per cent of UAE women, to have a more flexible schedule.

(YHQW %LJ 'DWD $QDO\WLFV A recent seminar, ‘Big Data Analytics’, hosted by Strathclyde Business School in the UAE addressed the utility of big data for modern managers. The talk, held at the School’s Abu Dhabi campus, was attended by about 50 students, alumni and community members. Dr. Matthew Revie from Strathclyde’s Department of Management Science offered valuable insights on the subject. With extensive experience providing decision support and continuing professional development to a wide range

of organisations, Matthew was perfectly qualified to comment. He explained how big data can be used and highlighted the various considerations to be kept in mind. Encouraging audience interaction, he also answered several questions. Captivating case studies and straightforward non-technical dissections of the features, techniques, benefits, and complexities of big data analytics were key to successfully demystifying this important topic in a way that was both enlightening and useful for the forward thinking managers in attendance.

July 2013

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SME ABOUT TOWN

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recent open day for Tejar Dubai – an entrepreneurs’ development programme that offers a tailored individual learning experience to aspiring national entrepreneurs – revealed the requirement criteria, steps to apply as well as the selection procedure for programme. Organised by the Dubai Chamber of Commerce and Industry, the open day was attended by a large number of young nationals looking to enhance their entrepreneurship skills. Meanwhile, Essa Ali Al Zaabi, Senior Vice President, Institutional Support Sector, Dubai Chamber, and General Coordinator of Tejar Dubai unveiled the details of the

entrepreneurs’ development programme. He informed that the programme consists of three distinct components including ‘Individually tailored qualification agenda’, ‘Internship/constructive work experience with managerial guidance’ and ‘Mentorship from an expert on the panel’. The intensive training will prepare the interns for successfully launching and running their own business. The internship placement, which is tailored to each participant, will take place in an organisation and will involve rotation amongst different departments. The last component – mentorship – will be offered by a member of the sub-panel of experts who will take a winner under

His Excellency Hisham Al Shirawi, Chairman of the Panel of Experts Committee and Essa Ali Al Zaabi, Senior Vice President, Institutional Support Sector, Dubai Chamber, and General Coordinator of Tejar Dubai

his/her wing throughout the duration of the programme, he further explained. In his panel discussion, His Excellency Hisham Al Shirawi, Chairman of the Panel of Experts Committee, said that the selection process rests on the shoulders of the expert committee comprising of successful entrepreneurs and CEOs who thoroughly study the application,

&KDQJH WKH ZD\ \RX FRPPXQLFDWH Using a different approach to interact with their community of over 2000 companies, startups and small enterprises, Virtuzone hosted its first Google ‘Hangout On Air’. The session enabled a live conversation that gave busy startups and small business owners the opportunity to interact with each other in a casual setting, regardless of their physical locations. Virtuzone’s first Google ‘Hangout On Air’ saw Girard Moussa, Head of Google Enterprise, MENA, participate and delve into the critical need for all small businesses to adopt readily available and affordable solutions and apps, such as Gmail for business, Google Calendar, Google Drive, Google

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Neil Petch, Chairman, Virtugroup

Groups and other collaborations tools that can transform the way they work; bringing greater convenience and mobility, while saving costs and time.

evaluate their ideas and also carry out personal interviews to assess the finalists’ ability to participate in the programme successfully. The committee is also involved in the placement of the successful candidates in the internship and mentorship programmes while helping and guiding them in the implementation of their ideas and projects.

‘“Our initiatives strive to elevate the understanding of the challenges faced by startups and small businesses today, and address the unique needs of small business owners,” said Neil Petch, Chairman Virtugroup. “The ‘Hangout On Air’ is just another way in which we can help our small business community become savvier, more productive, innovative and successful with practical business education, tools and support,” added Petch. “Small businesses stand to benefit the most from the adoption of cloudbased technologies that bring people, processes and information together, creating an environment that allows them to manage more of their day to day operations with increased agility and mobility, working from anywhere, with anyone. The use of technology, such as Google’s apps suite, delivers big improvements in productivity and allows small businesses to gain a competitive edge,” concluded Petch.

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his summer up to 24 high school graduates and college students were presented with the opportunity to gain exposure to real world business experiences. A summer camp, Transform Your Future, offered an intensive two-week programme at the Knowledge Village from July 3 to July 15, 2013. The programme aimed to improve career options for the students’ work placement chances and enhance future job choices. Interestingly, prior research has demonstrated that summer learning rooted in family and community influences widens the achievement gap across social lines, while schooling offsets those family and community influences. Lisa MacLeod, CEO of Transformational Synergies International, who has devised the course, says: “One of the best ways for students to increase their

Lisa MacLeod, CEO of Transformational Synergies International

chances of getting hired after college is to contribute to the industry. They will not only gain priceless insight into a target industry, but

also make key connections and expand their network. Participants will learn to build their CV and list all their achievements, activities and milestones, as well as connect with people they have met while carrying out the required tasks of the programme. “During the summer, students should do something interesting and productive - something that makes them want to get up in the morning and better themselves. “Internships or ‘shadow days’ are particularly valuable for rising seniors who may have already identified an interest they want to pursue and finding the right position will be an important element of the programme. Real-life work experience is a great asset for students and the alternative of becoming an entrepreneur at a young age can also be a real option for school leavers.”

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The British University in Dubai (BUiD) recently concluded its Sustainability Summer School (SSS). The event received registrations from 48 undergraduate and postgraduate students from 15 universities from within and outside the UAE. The students got an opportunity to attend academic lectures, talks and presentations by industry professionals

and experts. In addition, they took part in intellectual debates with their counterparts. Furthermore, BUiD SSS participants were divided into six teams and each team designed a piece of furniture using recyclable material and also the learnings from the SSS week. VIPs, students and visitors toured an exhibition of students’ work that was displayed at the BUiD SSS exhibition. The closing ceremony of the event was attended by several honoured guests from government organisations including HE Sana Suhail, Asst. Undersecretary, Support Services, Ministry of Public Works and Engineer and Abdullah Rafee, Assistant Director-Engineering and Planning Department, Dubai Municipality. Engineer Abdullah Rafee, congratulated BUiD SSS attendees for the successful completion of the Sustainability Summer School and achieving so much in just a week. He also spoke about Dubai Municipality’s commitment towards sustainability as part of its Dubai 2015 strategic plan.

July 2013

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BANKING FOR BUSINESS

A catalyst for change - good Corporate Governance can supercharge your business Under the terms of the new Companies Act, Corporate Governance is an important responsibility for all businesses. It focuses on key activities that can help SMEs ‘raise the IHYÂť HJYVZZ ]P[HS VWLYH[PVUHS HYLHZ YLHWPUN [OL ILULĂ„[Z VM international standards and Best Practice. At the heart of the .V]LYUHUJL HNLUKH HYL [VW X\HSP[` Ă„UHUJPHS HUK IHURPUN strategies - empowering every size and style of SME and boosting competitiveness and longevity‌

“Good Corporate Governance leads to better company performance, higher profitability and efficiency levels, and better management of risk.� - Nick Nadal, Director, Hawkamah Institute for Corporate Governance

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ou might think that Corporate Governance is entirely a topic from the world of big business. Something that only multinationals would deal with courtesy of their internal audit team. And you would be wrong. Corporate Governance represents a host of opportunities for SMEs (and not a few challenges, too) - and it pays to be prepared. According to the UAE’s Ministerial Resolution 518, Corporate Governance is ‘the system by which companies are directed and controlled’. It applies specifically to the way that the company is directed and controlled by its owners and Board of Directors, rather than by means of any law or external mandate. This is a

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vitally important distinction, because it means that Corporate Governance is a clear yardstick for the ‘care’ that owners and directors themselves invest in the business. Benchmarking the things that matter

Corporate Governance exists in order to invest the crucial elements of your business with quality, credibility and consistency. So it looks at the key operational areas and sets benchmarks that are replicable and fully in line with international standards of best practice. What’s more, it addresses how the business communicates with its key stakeholders, promoting transparency and fairness and a ‘level playing field’ mentality that reassures shareholders and management alike. Not only that, but it encourages communication channels that keep the staff fully informed of how the business is doing and where it’s heading. Since it’s committed to helping you ‘raise the bar’, Corporate Governance can play a powerful role in encouraging a process of highly beneficial change. For example, it can help –

r 1SPNPUF FYDFMMFODF BU UIF DPSF PG UIF business in key operational areas such as accounting and financial reporting thereby contributing directly to better performance and company longevity. r $SFBUF CFODINBSLT BHBJOTU XIJDI ZPV DBO measure any deviation from declared goals and the objectives in your business plan. r "TQJSF UP #FTU 1SBDUJDF DSFBUJOH B DVMUVSF and climate whereby second best is never good enough and where everyone in the business is empowered to deliver the best possible standard of work. The value of Best Practice

There’s another factor to consider, too. Corporate Governance is a broad discipline and it covers a number of vital functions that are required by law. So having good standards of governance will help an SME set an exemplary Best Practice benchmark when to comes

to many of these key (and potentially sensitive) activities. Examples include: r &OTVSJOH UIBU MPDBM QBSUOFST IPMEJOH per cent of the business – are kept fully in the loop in terms of all financial and shareholding communication. r $SFBUJOH B DMFBS BOE TQFDJGJD MJOF PG accountability for key directors, and their areas of responsibility. r &TUBCMJTIJOH DPNQSFIFOTJWF BOE transparent records of all bank transactions, salary schedules and staff incentives. r ǔF GVMM BOE DPSSFDU BWBJMBCJMJUZ PG BVEJUFE accounts in response to stakeholder queries. r $FSUJGJFE BOE SFHVMBUFE GJSF IB[BSE maintenance and risk management procedures for all premises, plant, machinery and equipment. Remember, too, that Best Practice doesn’t just help the SME avoid pitfalls - it’s also

a powerful factor in differentiating your business from competitors and establishing an important USP for customers and prospects. Getting better, a step at a time

So how can you ensure that your business stays ahead of the Governance agenda and acts in a prudent, constructive way? The first step is to have a good understanding of the activities that Corporate Governance actually involves. The best description of what Corporate Governance includes is found in Dubai SME’s “Corporate Governance Code for Small and Medium Enterprises: Guide to Execution.� This specifies nine key ‘pillars’, each tackling what is seen as a prime area of Corporate Governance duty. Many readers may be surprised to see that a number of the pillars cover quite basic aspects of company life and may not have imagined that these fell

into the realm of Corporate Governance at all. Here’s what the nine pillars actually are Pillar One: Outline the roles of the Board, partners and shareholders Pillar Two: Conduct a succession planning process Pillar Three: Establish a timely, open and transparent flow of information with shareholders Pillar Four: Endeavour to set up a formal Board of Directors to accompany the growth of the company Pillar Five: Develop a clear mandate for the Board to oversee operational performance and improve business strategies Pillar Six: Maintain credible and audited books of accounts Pillar Seven: Set up an internal control framework and conduct a regular review of risk Pillar Eight: Recognise the needs of stakeholders

July 2013

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BANKING FOR BUSINESS

Pillar Nine: Formulate a framework for setting out the family’s relationship with the business Clearly, the proper execution of all - or indeed, any - of these, requires a written plan of action and the awareness of the corporate governance agenda needs to be established and encouraged at a very deep level in the company. Yet it’s not difficult to see from the above list that an owner/director has an immense spectrum of activities to take care of, and it may be all too easy to make a simple mistake by omission. Focusing on the essentials: creating your financial and banking Governance blueprint

The equitable and fair treatment of shareholders is one of the key cornerstones of corporate governance. Failure to be transparent in shareholder dealings is one of the main reasons for SME owners and directors to face private prosecution. Neglecting to notify current trading values and profitability can all too easily invite accusations of criminal fraud. This is especially the case when there is a latent conflict of interest, such as – r $POëJDU PG JOUFSFTU CFUXFFO NBKPSJUZ BOE minority shareholders r $POëJDU PG JOUFSFTU CFUXFFO NBOBHFNFOU and shareholders Squabbles around these ‘fault lines’ have the potential to tear the company apart, yet the majority of them only reach explosive proportions due to poor communication strategies on the part of the SME. Companies can help shareholders exercise their rights by effectively communicating written information that is understandable and accessible and by encouraging shareholders to take part in general meetings. An SME that leaves the communication p ro c e ss to o late may f i n d t hat shareholders won’t hesitate to obtain effective redress for the violation of their rights (and indeed, another benefit of establishing an effective line of communication is that the company directors will already have heard ‘rumblings’ of discontent long before the problems become irreversible). The SME should regularly communicate the following to its shareholders: r *UT DVSSFOU êOBODJBM QPTJUJPO

24

r 1FSGPSNBODF BOE QSPêUBCJMJUZ PWFS MBTU six months r 4USBUFHZ BOE CVTJOFTT NPEFM r 'JOBODJBM SJTL QSPêMF r 7BMVF PG PVUTUBOEJOH SFDFJWBCMFT These communications should be made via a dedicated newsletter in hard and soft copy, with a firm commitment made to circulate every Quarter.

As well as ensuring that your key operational activities are properly documented and audited - which in itself is going to be hugely beneficial for the business - good Governance shows that the owners and management are acting in good faith and with the best interests of all stakeholders uppermost much in mind. Maintain credible, audited accounts

The role of the Annual Report Part of good Corporate Governance - many For larger companies with a broader would say the most important part - is shareholder base, the best protocol is to ensuring that you have a clear, accurate publish an Annual Report. This will: paper trail for all your company’s financial r $MFBSMZ TFU PVU êOBODJBM PCKFDUJWFT BOE dealings. This applies not only externally to review past performance all transactions, payments and invoicing, r "MJHO CFIBWJPVST BOE WJTJPO but internally also: it’s crucial to maintain r 3FWJFX TIBSFIPMEFS CFIBWJPVS BOE accurate banking records, listings of all participation key accounts, credits/debits and payroll r &YQMBJO UIF DPNQBOZ T BQQSPBDI UP activities. No-one involved in the business Corporate Governance - what happens - including owners and senior directors and who is responsible can be exempt from this process and it r 5FMM TIBSFIPMEFST XIBU UP FYQFDU OFYU is imperative that any bonuses paid are logged and kept clearly in the public domain. The quality, timeliness, comprehensiveness &RUSRUDWH *RYHUQDQFH and integrity of your corporate financial statements are critical to financial stability, LV D FOHDU \DUGVWLFN and therefore to your business’ standing in IRU WKH nFDUHo WKDW the eyes of stakeholders and authorities alike. Step One in this process is to create a RZQHUV DQG GLUHFWRUV proper accounting infrastructure - one WKHPVHOYHV LQYHVW LQ that can be audited by an independent WKH EXVLQHVV and reputable accountancy firm when the time demands it. The raft of accounting activities will include: Throughout, the ‘golden rule’ is to show r "O *ODPNF 4UBUFNFOU B #BMBODF 4IFFU and a Cash Flow Statement. Remember that you have consistently costed-in shareholder expectations and that the that not only does this information to a large measure determine credit business has acted in a fair and transparent worthiness and attractiveness to way. investors, it will be used - if you so wish Attracting finance - at a later stage to determine the business’ In addition to placating and pleasing market value should you choose to sell, shareholders in a proactive way, good or to leverage larger sums to finance the Corporate Governance can facilitate other purchase of another business. key objectives, too - not least of which is r " SFRVJSFNFOU UIBU BMM XPSL JT QSFQBSFE increasing the appeal of your business to according to International Accounting potential funding partners and investors. Standards (IAS) and International For example, ADCB - well-known for its Financial Reporting Standards (IFRS). interest in the SME sector - comments that: “In addition to shareholders, even Note: From the perspective of Corporate Banks attach a lot of importance to the Governance, it’s especially vital to pay Governance system in an enterprise and particular attention to the Cash Flow what it conveys regarding the integrity Statement. This should show how the of the owners and the overall quality of company has generated and disposed management.” of cash and liquid funds (cash and cash

equivalents) through the bank account(s) during the period under review. It will document cash flows arising under three headings: Operating activities (net cash provided through the main revenue earning activities). These may include the sale of goods and/or services, royalties, fees, commissions and other revenue payments to suppliers, and to (and on behalf of ) employees; receipts and payments related to insurance, or government fees, etc. Investing activities (cash flows to and from the acquisition and disposal of long-term assets and other investments). Excluding cash flows to or from operating or financing activities, these may include: r $BTI ëPXT SFMBUFE UP UIF QVSDIBTF BOE or sale of property, plant, equipment, tangibles and other long-term assets r 1VSDIBTF BOE PS TBMF PG FRVJUZ PS debt instruments of other entities and interests in joint ventures, advances and loans made to or from other parties r $BTI GMPXT GPS BOE GSPN GJOBODJBM instruments considered to be investments not held for dealing or trading purposes

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contributions or borrowings). These exclude cash flows to or from investing The earlier in the growth curve that your activities and they may include proceeds business can secure itself in this way, the from issuing shares or other equity more intuitive and organic its safeguards instruments - as well as cash payments to will be in the future. shareholders to acquire or redeem shares. One last reason for adopting good Also, cash flows from raising short or long Governance: according to the Federation term debt and arising from repayment of Small Businesses - the largest SME of borrowings and payments by a lesee confederation in the world, with more to reduce the outstanding liability on a than 200,000 members - 65 per cent of finance lease. businesses that have been in existence for The cash flow statement shows how the 10 years or more have a stated commitment net balance of cash and cash equivalents to Best Practice. They see Best Practice as has changed over the period, usually a year. “a fundamental and necessary feature of (Note that the cash flow statement differs their appeal to customers and to future from a cash flow forecast, which predicts trading prospects.” See you in 2023? the expected rises and falls in cash flow over a forthcoming period). A safety raft for SMEs

Financing activities (cash supplied through financing, either through equity

an SME, good Governance means tying the business to a series of benchmark standards that have been specifically designed to, eg – r *OWFTU BMM LFZ GJOBODJBM BOE SJTL management procedures with quality, credibility and professionalism. r 3FBTTVSF TUBLFIPMEFST BCPVU UIF WFSJUZ and correctness of the operation. r "MJHOJOH CVTJOFTT PXOFST BOE TUBŀ UP the values of Best Practice.

Corporate Governance is about doing things properly. Whatever the scale of

For an online version, please visit: www.smeadvisor.com/2013/07/a-catalystfor-change/

July 2013

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MOVERS AND SHAKERS

Count to 10

0M `V\ OHK [V Z[HY[ MYVT ZJYH[JO ^P[O UV [YHKPUN SPJLUJL VMÄJL VY ]PZH OV^ SVUN ^V\SK P[ [HRL to set up a business in the UAE? Virtuzone, the one-stop business facilitation specialists, say they can get your company up and running in 10 days. We speak to the man behind this hurricane-fast process, company Chairman Neil Petch - discovering the secrets, the vision and the ambition of the self-proclaimed ‘company formation specialist’…

“The first thing I should say”, says Neil Petch, trade, an apartment and an office, but “Of course, there’s a good deal of work “is that the Virtuzone concept really grew who didn’t know the best ways to navigate going on behind the scenes in order for out of my having had so many business himself through the process.” things to work so smoothly; I sometimes experiences here in the UAE; I’d been in think it’s like a duck on the water - you exactly the same position as the businesses Virtuzone promise a complete ‘one don’t see all the activity that’s happening beneath the surface!” we help through the start-up process - and stop’ service: is it really that simple, not just once, but a number of times. I and if so, how? realised that quite apart from whatever “One of the things I realised early on”, says Do you only work with startups and skills I had in sectors such as publishing Neil, “is that if you are going down this route, SMEs, or with larger businesses too? and the media (Neil was previously a you can’t do things by halves. You can’t leave “We work with just about every size and style Board Director of the largest publisher people stranded half-way. The result is that we of company, but while you might think that in the UAE), I had become - through make it our mission to take all the red tape out the larger, more sophisticated businesses necessity - something of a company of your hair - and that’s exactly what we do. For may not need our services as regularly, a formation specialist. No-one else was example, we’ll talk to you about your business surprising amount of our work comes from offering this kind of complete, one-stop idea and the kind of environment it will need big, recognised companies who want to set service, and it made good sense as a to grow. We’ll assess your office needs, as well up an office in the UAE. They work with business concept. I understood exactly as the visa requirements for yourself and your us because they want to make a smooth what it was like to be that entrepreneur staff, and we’ll provide a range of business and transition into this market and minimise who needed a visa, company articles of networking benefits - it’s a complete package. wastage or lost time.”

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Do the majority of your clients approach you when they have literally just arrived in the UAE?

“Some do, yes, but I like to think that our ‘market intelligence’ is good enough to know who wants to locate and start-up a business in Dubai before they even arrive here! We try to be as proactive as possible and start the dialogue at the earliest stage we can.� Describe how the office-sourcing process work - eg, do you use a ‘middleman’ business, for example?

“We have many partnerships with real estate and managed office professionals. Since we work across quite a broad portfiolio and have access to most of what’s available in the market, we can always find something that’s a very good fit with your needs and current capabilities. We’ve built up this expertise of dealing with specialist businesses over a number of years and know who’s best at doing what.�

To what stage do you work with a business? Is there a point when you ‘let them go’, because they’ve outgrown your range of services?

“Of course, there will always be businesses who want to move on and who prefer to start doing things under their own steam - that’s totally understandable. Yet the reality is that we can be extremely flexible in terms of what we offer and nothing pleases me more than to see a company that was once a startup evolve to a very sophisticated level. We have several examples, for instance, of companies which started with one person and one desk and which have gone on to offer IPOs! “Another point to keep in mind is that rather than future growth being the problem, the challenge for many SMEs is that they don’t have much chance to think about the future at all - they’re much too busy just getting on with the day-to-day work. So we can help them consider and discuss their needs, planning aspects like the visa facilitation and office space requirements in advance, and advising on the budgets that will be required.� Do you see yourselves as ‘champions’ of the SME cause?

“In a way, yes, because you have to remember that one of the biggest benefits to our customers is that we are also an SME! So we understand all the critical ‘hotspots’ and the difficulties

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Neil Petch, Chairman and Founder, Virtuzone

in the growth path only too well. Also, there are many areas in which we can help companies develop and build their market position, bringing different skillsets to bear from different parts of the business. “This is also why we decided to diversify into networking platforms such as ‘Connect Breakfast and Connect After Hours’, because these events help us keep in touch more closely with our customers and build a more fully-integrated dialogue.� Do you have any favourite business tips to share?

“I always have a breakfast meeting every day at 8-45. It’s a powerful way of keeping in touch with what’s going on in the business and for people to air their concerns. I’m always surprised that more companies don’t do this; I guarantee that if you do it for one month, you’ll never look back and wonder how you got along without it for so long.� How would you describe the working ‘culture’ at Virtuzone?

“We’ve developed a very ‘flat’ system of working, where people are empowered and can make decisions at every level of the business. We found that this was crucial if we were going to provide a genuinely ‘express’ service - in our business, good decision-making at the point of delivery, rather than endless referrals, is the secret of getting things done quickly.� As an SME yourselves, what are your own plans for development over the next five years?

“I see as evolving more of an online community - an online ‘dashboard’ that lets us see exactly where things are at any time. We’re already investing heavily in this kind of online interaction. Our recent ‘Google Hangout On Air’ for small businesses was a first in the region for SMEs and it was a great success. “This really comes back to the idea of being a ‘champion’ of the SME cause. I think we’re actually becoming more of a mouthpiece for SMEs’ needs and concerns, and as our own expertise grows, we’re able to provide a broad range of workable solutions to the sector.� For an online version, please visit:

www.smeadvisor.com/2013/07/countto-10/

July 2013

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MOVERS AND SHAKERS

All the ingredients for success (and Falafel)! Everyone in the region knows the concept of ‘Falafel’. It’s something quite ordinary. But something not so ordinary? Falafel going global. With rapid expansion and impressive growth over a short period of time, Just Falafel has proven to be an exemplary SME performance model. SME Advisor spoke to Just Falafel’s dynamic management team to discover their recipe for success…

F

irst things first. Just Falafel has best in them. It’s essential that the team managed to take a simple is growing alongside the brand.” When it comes to the Just Falafel team, concept and convert it into a great business model. So it’s culturally very diverse. Does this – what is the secret to Just contribute to the success of the brand? Falafel’s explosive growth? “Dubai has 200 different nationalities and Safa’a Fares, Franchisee in Lebanon we have a test market right here in the explains, “Just Falafel is the first company office! Having a global perspective through in the world that has innovated in a core our team members is empowering. If our food category by adapting it to a 21st team accepts our new products, we know century lifestyle and offering it in global everyone else will too,” says Shetty-Bitar. tastes. Traditionally, Falafel is offered in one category with pita bread and sesame The gender equation oil sauce. But – at Just Falafel, you can Speaking to the powerful female have it in an Italian sandwich, Indian, management team of Just Falafel, it was Mexican, a burger and my favourite one only natural to wonder – do women have – the Japanese!” an advantage, or perhaps disadvantage, in Reema Shetty-Bitar, Director at Just the world of business? Falafel: “The secret, according to me, is “I don’t think that women are treated any being simple, focused and fun. Also, we different. They are equal to their peers and have a phenomenal team.” it honestly isn’t something that has come And, what is your personal leadership to my mind. Having said that, I definitely mantra to keep the team going? “It’s believe that women bring a warmer important to give people the ownership perspective to the business. It is pleasant of what they are doing. It brings out the to have women around in the office – it

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Reema Shetty-Bitar, Director, Just Falafel

maintains a balanced environment,” says Shetty-Bitar. “And we definitely make a prettier office!” she adds. Fares says, “In a male dominant environment, you get more appreciated and high-fived on your success. Because

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MOVERS AND SHAKERS you are closely watched, you’re pushed to deliver on expectations and tempted to go beyond.” Rajika Dalwani, Franchisee, Just Falafel adds, “I think previously there was a disparity. Today, however, I don’t think women are reluctant at all.” And – is there a conscious decision to hire more women?

Rajika Dalwani, Just Falafel franchisee

Dalwani continues, “What is important while hiring is getting the right person for the job. They should be happy in their role and fit into the company profile.” Fares agrees, “A priority is who is delivering the most, who is working hard and who is subscribing and committing to the work culture. Gender becomes a minor issue.” The world of franchising

r What is the role of a franchisee in the building the Just Falafel brand? “I believe I’m an ambassador for the brand. I have the responsibility of keeping up with its phenomenal growth,” explains Fares. r How important is it for the franchisee to follow the template set and maintain global standards? Shetty-Bitar says, “I think if the franchisee questions the set template, they probably don’t have the belief in the brand to begin with. The fact that the franchisee has approached you reflects that they trust you, your business and the business model. Our template is consistent and proven. It is there to make life easier for the franchisees.” “In addition, we encourage any feedback from the franchise owners. If they have an idea, they can bring it to us, we are very open to that. If we like it, we go ahead and approve it,” she continues.

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“You don’t pay a franchise fee and stand aside to watch. When you are a franchisee, you become a partner, an ambassador. You change your thinking. You become global to go global,” adds Fares. r What advice would you give a startup looking to get into the franchising business? Dalwani says, “As a franchise owner, you are the branding ambassador and affect the franchisor directly. It is vital to remember this and this is what makes it different from having your own business.” She continues that as a franchisee, you need to work in partnership with the franchisor, and seek guidance from them during any difficult phases. Also, a constant reminder that someone is out there doing it better than you is a good way to keep a check on your franchising business. r *G ZPV SF BO 4.& MPPLJOH UP HFU JOUP UIF franchising business, what do you need to know? Shetty-Bitar entails the key aspects: 1. Financial viability – The franchising fee has to be affordable and not too expensive. The franchisee shouldn’t feel burdened right from the start of the business. It should be an amount the franchisee is comfortable to work and grow with. 2. Business model – There has to be a strong trust relationship between the two parties. As a franchisor, it is imperative that the people working with you have confidence in your business and business model.

3. Sky is the limit – The appealing factor of franchising is that it gives you a global platform. In reality, there is no limit to where your business can go which makes it exciting. Franchisees consistently widen possibilities and aid in rapid expansion of the brand. 4. Fun environment –Very importantly, businesses should try and create a vibrant, fun and dynamic office environment!

Safa’a Fares, Just Falafel franchisee

So, if your SME is looking to leap into the franchising world or getting ready for the big step to the next level – what better advice than that of the Subway franchising billionaire, Fred Deluca, himself? Start small and finish big! For an online version, please visit:

www.smeadvisor.com/2013/07/ all-theingredients-for-success-and-falafel-2/

THE RECIPE FOR SUCCESS 1. Stay simple! Why waste time and effort looking for a complex business idea when you can take a completely basic business model and implement it in the right way to achieve remarkable results. 2. Ensure that your franchising model is strong and consistent so that franchisees wouldn’t see the need to make any amends. 3. Franchising is essentially a long-term relationship with the franchisee where mutual trust and respect are undeniably paramount factors. Franchisors should reach out to their franchisees during tough times and lead from the front. 4. Don’t forget that one of the top assets of a company is its people! Invest in the right team and associate your business with partners that add value to your brand and empower its growth. 5. It’s essential to create an open office environment where employees are encouraged to give new ideas and voice their opinion. It also helps to have a strong dialogue with the franchisees to get valuable feedback.

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July 2013

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MOVERS AND SHAKERS

Science or art?

At 23 years old, Nowshir Engineer developed a passion for events and media that would make him a pioneer of ‘the science of event management & media training’ - and put him at the head of the region’s foremost media training schools. SME Advisor met the man who’s turned the word ‘innovator’ into a mantra of success...

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events and experiential marketing. You could say that I was hooked for life! I realised that although this was a big sector, there was no-one carrying out accredited or skill based training. When an Events company hired people, it had no way of knowing how good those people would be - and similarly, there was no way of learning the key skills that would serve you well in that industry and build a platform for your progress. I knew that if I could create a good training benchmark it could be the basis of a

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hen it comes to choice of career, Nowshir Engineer is a rare example of someone who followed his dreams - and the result was a spectacular roller-coaster ride that when from boom to nearly-bust and then saw him building an international business that’s a peerless leader in its field. Today, his company - EMDI Institute of Media & Communication - trains students in Events, Advertising, PR, Journalism, TV & Radio-DJ skills. It’s the clear market leader, in a field of its own, with campuses in Dubai, India (Mumbai, Vashi, Thane, Indore, Delhi, Bhopal) and most recently – Kampala, Uganda. Nowshir, Was there a particular event or occasion that became the inspiration for EMDI?

“Yes, very much so. I did a three-month internship with a bank in their retail and event marketing division and found myself fascinated with the power of

which is a globally listed corporate to help us grow and increase our product portfolio. What style of training does EMDI offer?

EMDI’s training in any field is completely hands on with and industry focus. For any career – we first go out and meet the industry – identify the 100 odd skill sets that they would look for in a candidate before hiring, then we globally map that against curricula, and structure our course offerings. We then identify the best in the industry to share their experiences on that topic, and accordingly students learn from the industry, work on projects with the industry and accordingly get absorbed by the industry on their merit through our network. To take the example of our events course “There are basically four areas of training. These are r Ç”F DSFBUJWF DPODFQUVBM TJEF r Ç”F NBSLFUJOH TQPOTPSTIJQ BOE DMJFOU account management side r Ç”F QSPEVDUJPO EJNFOTJPO m FWFSZUIJOH from venue/logistics/backstage, coordination, budgeting, health /safety etc. r 5FDIOJDBMT 4QFDJBM &Ĺ€FDUT

very strong business model. There was demand and there was supply. What’s “Covering all these core areas means that more, I really loved the industry! The when a student graduates from a course, entrepreneur spirit kicked in, and I went he or she has a 360-degree awareness ahead and setup my training business of the subject. So if the area of study is – and called it the Event Management Events management, for example, you’ll Development Institute. Being a young find that our graduates have an in-depth and new brand, we decided on a business knowledge of all the technical side - not model of getting 100 per cent industry just the logistics of how to arrange the professionals to come and teach at the event or choosing a venue. This makes Institute, which helped us become a part our graduates far more marketable - they of the industry, our students worked can make an immediate contribution in on their events, and did internships, the work environment. We gear things which finally lead to placements. So in this way because so often, I’ve worked on a student level the experience was with people who find themselves in a job amazing, however on a business and where they simply don’t have all the skills financial level I went ahead and started they need. a training business, not really knowing “You’ll find this in-depth training across anything about aspects like forecasting all the subjects we offer. So if you’re and budgeting, but full of enthusiasm studying advertising, for example, you’ll and thinking that I would work things come away with a good appreciation for the role of the account planner, as out as I went along.� A lot of business management decisions well as practical experience of being a went wrong, cash flow management was copywriter. So once you start work in the tough, but in 2008 we partnered and tied sector, you’ll know exactly how all the up with Greycells Education Limited, pieces fit together.�

July 2013

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MOVERS AND SHAKERS

What accreditation do your courses have?

“All our courses are accredited internationally by City & Guilds, the UK’s largest vocational awarding body. City & Guilds is one of the most universallyrespected of all accreditation brands - more than 130 years old, it certifies two million learners a year across 500 qualifications

up by a very practical emphasis on areas such as presentation techniques, interview skills, team building, leadership, and entrepreneurship. So it’s not just a question of knowing the subject, it’s always a case of having the skills to be a practitioner in an actual working environment. ‘Earning while you’re learning’ is the best way to get them.� Are your teaching staff from an academic or professional background?

geographically and makes a great location for a Middle East hub - plus, it’s also the ideal platform for further expansion in the region. The other factor is that it gives us the chance to have a very different student profile and to bring the EMDI message to a younger and more ethnically diverse sector of the community. The City of Dubai, actually the UAE as region – was also extremely attractive with its focus on Tourism, Events and Hospitality, besides an economic environment which made it easy to operate within.�

“We have over 200 industry professionals as lecturers sharing their experiences. All our teaching staff are media professionals, because, again, the emphasis is on teaching the skills that will be needed in real-world The name ‘EMDI’ is an acronym, isn’t it? environments, and these are the best What does it stand for? people to know. We involve these leading “It currently stands for our ethos: Educate, professionals at every stage, from course Motivate, Develop, Inspire. I chose these preparation to delivery. So, for example, words because we offer much more than they play a major role in designing the just a formal academic education; our goal is curriculum, ensuring that it incorporates all not just to give students the skills they need the latest industry developments across the to make progress in the industry sector they teaching spectrum, and it’s then passed to choose, but to give them an inspirational City & Guilds for international accreditation.� input that can stay with them the rest of their lives and always nourish and sustain them Is there a typical student demographic in their quest for success in any given sector.� Nowshir Engineer

at EMDI? How does it vary between Dubai, India and Africa?

What do you see as the next stage

“The demographics vary enormously. In in EMDI’s process of evolution and Dubai, for instance, our intake is very development? What’s your ‘vision mixed. 45 per cent of students are Asian “My five-year vision is to grow vocational 2XU TXHVW LV WR JHW and 45 per cent non-Asian (British, South education across the region; the reality is HYHU\ VWXGHQW D MRE African, Australian), with only 10 per cent that the value of good vocational training still ZLWKRXW EHLQJ +DUYDUG Arabic Nationalities. I would very much hasn’t reached as many people as it should. like to see more students enrolling from I want more people to be aware that if they’re 8QLYHUVLW\ Arabic backgrounds, but there’s a certain interested in some of the most rewarding, amount of cultural resistance to overcome. varied and creative professions, we provide Dubai is very unique in giving us a high the leverage that will make prospective in 81 countries. So when you leave EMDI, proportion of non-Asian students, a result employers sit up and take notice.� your qualification is instantly recognisable of its being such a cosmopolitan hub. In terms of concrete plans, it is expansion wherever you apply. “You also have to consider as well how in the UAE to Sharjah / Abu Dhabi, regional “The quality and industry-relevance of different countries have different age expansion to Oman, Bahrain, Qatar, and what we do is paramount - our quest is requirements before a student can enrol. globally it is new markets, new courses and to get every student a job, without being So in Dubai, a student has to be at least 18 new verticals. With Media Broadcasting, Harvard University!� to enrol, whereas in India, for our full time Sports Management courses already under courses you have to be a graduate. Here the Greycells umbrella, we are looking Do your courses have a ‘work in Dubai, all our courses are part-time, at ventures in Coaching, Fashion, Film, taking place at evenings and weekends, and Animation as well. We are looking at placement’ element? “Absolutely - I’ve always felt this is very which usually encourages young working associations, collaborations, and business important, because it completes the ‘real professionals to enrol.� partnerships to take this forward. world’, 360-degree awareness of the subject The next five years can be summed up in my three words: Higher, Faster, and does a lot to increase the graduate’s What made you choose Dubai as your marketability. Students have the chance to second hub? Stronger! work on structured internships and events “After our foundation in Bombay during the course of their studies, often (Mumbai) in 2002, I was constantly on For an online version, please visit: working on ‘live’ projects with prestigious the look-out for fresh locations. Dubai www.smeadvisor.com/2013/07/scienceinternational brands. This is further backed appeals because it’s ideally-placed or-art/

34

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MANAGING RISK

Are you facing the risks or reaping the rewards? As an SME owner or director, how can you best safeguard against RL` ÄUHUJPHS YPZRZ JYLH[PUN H WVVS VM ]HS\HISL HZZL[Z HZ `V\Y I\ZPULZZ TH[\YLZ& /V^ JHU `V\ [HRL TH_PT\T HK]HU[HNL VM ÄUHUJPHS WSHUUPUN options that give your business a crucial competitive edge? Or create added-value options for your staff that reduce the likelihood of losing key personnel? SME Advisor spoke to Globaleye, the UAE’s leading wealth management consultant, about proven strategies for managing ÄUHUJPHS YPZR HUK I\PSKPUN ZHMLN\HYKZ MVY [OL M\[\YL

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et’s take three classic scenarios that impact SME owners and directors time and time again. r 'JSTUMZ JNBHJOF UIBU POF of your co-directors passes away unexpectedly, and no provision has been made for the future ownership of the shareholding. The director’s widow receives a highly attractive offer to sell the shareholding to an archcompetitor - and does so, to the horror and amazement of the other directors. You now have a key rival on the Board. What will you do? r "MUIPVHI ZPVS CVTJOFTT IBT WFSZ GFX fixed assets, you manage to attract a strong ‘angel’ investor. Yet there is a concern that your business appears to have a high turnover of senior managers - and indeed, a key director has a history of ill health. How can you reassure the investor that the investment is protected when there appears to be at least a likelihood of unfortunate changes in the director profile? r "GUFS TJY ZFBST PG DPNQBOZ PXOFSTIJQ you realise that in effect, you are still a ‘wage slave’, dependent on drawing salary from the business rather than accruing capital and wealth. You want

36

to break the pattern, but time is moving on and there’s no sign of a dramatic upturn in company performance… Each of these scenarios can be avoided completely with some forethought and good financial advice. Each of them has a tried and tested, proactive remedy that doesn’t depend on exotic and costly refinancing or a company restructure, but rather, on affordable and highly practical financial mechanisms that are specifically tailored to help you circumnavigate the risks - and reap the rewards.

Knowing the LQYHVWPHQW LV SURWHFWHG FDQ EH D SRZHUIXO LQFHQWLYH IRU WKH LQYHVWRU DQG D NH\ UHDVRQ WR FKRRVH WR LQYHVW LQ \RXU EXVLQHVV RYHU DQG DERYH FRPSHWLWRU ÚUPV

The first step is to start a dialogue with the companies who can provide the skillsets and know-how that will allow your business to minimise these classic, foreseeable risks. As Tim Searle, founder and Chairman of Globaleye comments: “It’s part of our role to talk with the SME owner about the ‘what if?’ scenario and suggest solutions that are affordable, practical and totally suited to the needs of the individual in question. For example, it may be the case that the SME owner feels that at this time, all the budget has to go towards building the business, and that any other provision however badly needed - isn’t affordable. So let’s sit down and review the options - and do our best to establish whether you can afford to take action or not. Working with a company such as ourselves, you’ll get the fullest possible picture of the financial tools that are available to you. We take this responsibility to give comprehensive, unbiased advice very seriously; it’s our job as a broker to give you the fullest possible choice, and we work with the most credible companies in the marketplace - names like AIG, Zurich and Aetna, to take three examples. “We work across a portfolio of about 1520 different product types, including Life

insurance, Pensions, Medical, Directors’ & Officers’ Liability, Shareholder Protection and Key Man cover. These can address crucial business needs - they’re not just about you as an individual - and can make a tremendous difference to the way your company can meet its responsibilities to staff and investors. Let’s take Medical cover as an example. Our objective is to provide your team with cover that works. Cover that won’t mean members of staff having to quibble with the clinic or the hospital about what’s covered and what isn’t. Remember that there’s nothing more counter-productive than having staff worried about medical bills rather than being able to focus on the job at hand. So we design a high-quality programme that works - and our team will be able to talk to you from their own experience, because that’s exactly the same kind of top-quality plan they have. “Having valuable ‘in service’ benefits gives staff members a lot of confidence and significantly boosts loyalty. This is particularly important in the context of an SME, where people really are the primary asset of the business - and you need to ensure that they are as resistant as possible to offers from elsewhere.” Building your armoury of resources

Tim continues: “All of our team have studied for and hold the recognised industry qualifications - ACII, for example - and this means that we have the knowledge to source nimble, flexible solutions around a company’s very individual needs. One of the real tests of a financial planning company is when you ask the question “who is doing the asset management of the funds involved?” Well, our Singapore office is a dedicated asset manager, so we actually have this allimportant function within the Group itself. We’re a multi-jurisdictional investment group with a chain of offices around the world, so you always have a wide range of resources and skillsets working on your behalf. Our philosophy is that if we can’t do it, we know someone who can. So we’ll be able to help you set up an offshore bank account, for example, or invest in the property markets in London or Mumbai. Not to mention being able

July 2013

37

MANAGING RISK

r 8IFUIFS PS OPU UIF EJSFDUPS XPVME CF expected to sell his/her shares? r 8IFUIFS PS OPU UIF EJSFDUPS XPVME CF able to provide for loved ones? r 8IFUIFS PS OPU UIF PUIFS EJSFDUPST would expect the critically-ill director to strand down? A Critical Illness agreement resolves these issues before they happen and provides the necessary income for the director to provide for life when there is no guarantee of a permanent return to work.

Tim Searle, Chairman, Globaleye

to assist you with school fees planning and the classic raft of needs that you as a company director are faced with on a daily basis. We can work in a very transparent and flexible way because we’re not owned by a big company and we can be highly responsive to our clients’ needs. “One of the most valuable services we can offer is to provide a comprehensive online snapshot of your accounts and their performance - you can see at a glance exactly how your portfolio is performing. You don’t have to phone us and ask how your investments are doing, because the full picture is available instantly, 24/7.” Getting the risk ‘safety nets’ in place

Let’s look at four examples of how a Wealth Manager can put in place practical measures that can be a powerful catalyst in protecting your business against a variety of critical risks. Third Party Funding Investors are traditionally hesitant to invest in the SME model because of the lack of fixed assets, and the fact that an investment based on ‘good people’ alone may prove to be hazardous and vulnerable. A Business Protection policy, however, can be a powerful tool for encouraging investment, because it compensates the investor in the event of one of the key Directors suffering a serious illness or passing away, leading to a decline in company fortunes. Knowing the investment is protected in this way can be

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+DYLQJ YDOXDEOH nLQ VHUYLFHo EHQHÚWV JLYHV VWDII PHPEHUV D ORW RI FRQÚGHQFH DQG VLJQLÚFDQWO\ ERRVWV OR\DOW\ a powerful incentive for the investor and a key reason to choose to invest in your business over and above competitor firms.

Key Man insurance Many SMEs have a crucial employee - someone who brought in most of the business, handles the majority of customer accounts or who has a unique understanding of the systems, procedures and financial management. Key man insurance covers you in the case of this person dying or becoming too ill to continue normal responsibilities, leading to a downturn in the business’ fortunes. Key Man cover provides the business with the ’buffer’ funds to manage a difficult transition and source a suitable replacement long-term. In the worst case scenario, it will provide the funds to wind down the business in a proper and legal way, ensuring that the directors’ reputations are intact should they wish to launch further ventures. Adding resources

Every SME owner knows that cashflow is king, and the role of the wealth manager Shareholder Agreement and Shareholder is to make available - on-budget - the Protection Plan expert resources that may not otherwise A Shareholder Protection Plan details how be feasible or readily to hand. In other the shareholding should be allocated on words, it provides a range of services that the death or serious illness of a shareholder. can let an SME ‘punch above its weight’ It’s linked with a Life policy that provides - and in so doing, empower it to behave the funds for the surviving shareholders to like a bigger, more sophisticated business, buy back the share issue. This answers a Most entrepreneurs go into business key concern for many businesses, whereby hoping for the best but an event like the director’s widow legally has the right to the ones mentioned above are not sell the shares however she sees fit - even only a potential reality but will have to a competitor! Shareholder Protection a serious impact on the venture. By ensures that all these issues are settled taking some time with a company who while the key directors are still alive, so understands these risks (and has done there will be no stressful or complex court it themselves!) can ensure while you battles. hope for the best, we also put in plans for the worst. Critical Illness risks If a director falls seriously ill, there are For an online version, please visit: whole range of complex issues to consider, www.smeadvisor.com/2013/07/are-youincluding – facing-the-risks-or-reaping-the-rewards/

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6KRZ PH WKH PRQH\ It’s no secret that startups and SMEs Z[Y\NNSL [V NL[ ÄUHUJLZ HUK THRL LUKZ meet. But – since you can’t beat learning by example, SME Advisor lays down some VM [OL IHZPJZ VM NL[[PUN ÄUHUJL HUK ZWLHRZ to Saeid Hejazi, CEO and Co-Founder, Wally on how his team got it right.

“Financing is necessary to assist SMEs initiate and cultivate their operations, develop new products and services, as well as invest in new staff and/or production facilities. Many small businesses start out with entrepreneurs investing their own money who in turn approach family and friends for financial help in return for a share in the business. Nevertheless, if they are successful in the startup phase, eventually all developing SMEs will face a need for new investment to expand and/ or innovate further. That is the point at which they often run into difficulties. This usually occurs in the second or third year of operations. Whether they are based in an advanced market or one of the Gulf countries, they find it much harder than larger businesses to obtain financing from banks, capital markets or other suppliers of credit.”

This excerpt from the 2012 report, Guidelines for Enhancing SME Finance, by Dubai Chamber of Commerce and Industr y’s Business Support Department does an excellent job of capturing the exact sentiments of the SME market and their often-discussed financial woes. One startup, however, that has done particularly well with its early stage funding is Wally, the personal finance app. The ad-free app – currently available at no cost to iPhone users – aims to simplify the process of managing your day-to-day finances. Wally, a new entrant in the app industry, has already managed to attract 100,000 active users and acquire USD 400,000 in funding, making it the perfect source of inspiration for its peers in the industry.

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While getting funding has always been a tedious process, it has become slightly easier in recent times as investors are more open to entrepreneurs and there is an extensive range of finance options available, explains Hejazi. So - what are the options?

Much to their despair, only 14 per cent of SMEs use banks to get finance for their growth, according to the SME Friendliness Index released by Dubai SME which leaves a vast majority of SMEs adrift in the quest for alternative financing solutions. The good news, however, is that SMEs today have a wide variety of funding options available to them apart from traditional bank loans. While the bank is very much a ‘risk partner’ – lending money without requiring an organic role in your business, this is only half the story. There is a growing availability

Wally’s presentation during an event

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of ‘investment partners’ such as an angel investor, venture capitalist or the increasingly popular crowdfunding option. Let’s take a closer look at the other viable solutions: 1. Self-funding – A high percentage of business owners dip into their personal savings when starting out their own business. They gather further funding by reaching out to friends and family. This kind of financing is often seen at the initial stage of the startup or during the ‘idea’ phase. In this case, it is vital to set up a formal repayment agreement and lay down the terms of the loan clearly in order to avoid future disputes. A great tool in this regard is ZimpleMoney.com – this online website has a variety of basic sample loan agreements, worksheets, payment schedules and an easy-to-use loan calculator available at little or no cost.

2. Angel Investors – Giving business owners more control than VCs, angel investors are a good option for smaller investment amounts – particularly at an earlier stage in the business. Angel investors are typically individuals with a high net-worth and looking to invest for great returns. A popular way to reach out to potential angel investors is by talking to people in

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July 2013

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GETTING FINANCE

your network and business groups. When looking for an angel investor, it is crucial to find someone with the same long-term vision and goals as the business. 3. Crowdinvesting – A recent popular example that comes to mind is that of Nabeesh.com on Eureeca.com. The virtual skills marketplace was successful in raising its target funding in 12 days through the crowdinvesting platform. “I think it is a very brave thing to do as you are showcasing your idea on a huge platform to several people at the same time. It reflects that you are confident about your product or concept. It undeniably speaks volumes about your company,” comments Hejazi. The downside, however, of this popular option is that “Crowdfunding may connect you with seed money, but ultimately your company stands a higher chance of success with the benefit of the tactical, savvy strategies for market capture, and smart financial practices that a seasoned investor can provide. Also, a well-connected veteran with a serious stake in your success can open doors that a pack of starry-eyed strangers chipping in USD 50 apiece simply cannot,” explains Ari Zoldan in 3 Reasons Not to Crowdfund on Inc.com. 4. Venture Capitalists – Businesses usually opt for this when they have transitioned from a startup into an SME. VCs are different in their approach, when compared to bank loans, in the way that they offer funding in return for a considerable stake in the business. However, they bring not just finance but a pool of resources like mentorship, experience and valuable contacts to the table which an SME can hugely benefit from. The downside, however, could be that along with the plethora of resources comes in strong control of the business and its operations – which may not go well with its business owner. 5. Exit or Acquisition – A popular example of this option was the acquisition of Cobone.com – the premium ‘daily deal’ site – by Tiger Global Management. The buyout gave Cobone a chance to expand across the region with valuable access to added financial capital. “When a business

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Saeid Hejazi, CEO and Co-Founder, Wally

Snapshot of Wally What?

Wally – the personal finance app

Who uses it?

Urban, on the go, ages 23 – 31, just ready to take on financial responsibility – getting married for instance

Number of users? 100,000 active users

,W LV GLIÚFXOW ÚQGLQJ LQYHVWRUV WKDW ZDQW WR LQYHVW LQ \RXU EXVLQHVV EXW LW LV WRXJKHU ÚQGLQJ LQYHVWRUV WKDW DOLJQ ZLWK \RXU YLVLRQ DQG EULQJ PRUH WR WKH WDEOH WKDQ MXVW PRQH\ WKH\ VKRXOG EULQJ LQ UHVRXUFHV DQG PHQWRUVKLS is growing fast, you need an additional infusion of financial resources to take it to the next level. We were searching for a strategic partner and when Tiger Global Management came along we knew they were the right choice,” says Paul Kenny, CEO and Founder, Cobone. Several businesses take this route – they either sell a huge share in the company or sell their entire company to a larger corporation. A great tool for business owners is BodeTree.com which allows you to calculate the value of your business

through its ‘business valuation’ feature alongside other important aspects like cashflow, capital efficiency, optimisation index and so on. While these are some of the options, many others include credit cards, factoring, leasing, IPOs and seed funding. The fundamental rule behind financing is to assess all available avenues and go with the one that closely fits your business and your own mentality. Choosing the right investor

“It is difficult finding investors that want to invest in your business but it is tougher finding investors that align with your vision and bring more to the table than just money; they should bring in resources and mentorship,” explains Hejazi. “Most investors are looking to get fast returns. At Wally, however, our leading focus is to create a global reach and build the right product first. We need visionary investors who can realise and appreciate this,” he adds. Proposing the same model, Aaron Anders explains in his article, Startup Fundraising Tips from the Front Lines on Inc.com, “Get customers, then funding. No amount of investment can buy customers if your product itself can’t earn them. And with customers, funding follows easily. Customers, then funding, always.” More importantly, it is imperative to understand what the niche market of your potential investor is. An article on Nasdaq.com by Minyanville describes, “It’s critical to find the right investor, your perfect match. If someone turns you down, it could mean just about anything -- maybe he or she is just not comfortable with your market segment, for example. There are dozens of focused investors out there, and even the person who turns you down would likely recommend other - and better - doors to knock on.” Hejazi agrees, “Investors usually invest in the kind of things they understand and are comfortable with. For example, a tech investor may have his own niche like mobile tech, or healthcare tech or Telco, etc.” Top roadblocks

“When the going gets tough, the tough get going” – having secured an internal

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funding of USD 400,000 from their existing pool of investors, Wally has confidently overcome some initial hurdles to emerge strong. How did they do it? “Our investors have noticed that all the early signs show that Wally is on the right path. We have about 100,000 active users that boost investor confidence. When people look at the headlines, all they see is the investment figure. What they don’t see is the immense hard work put into it, the months and months of negotiation with the investors, and all these other challenges.” What are some of the major challenges? 1. Utilising the money in the right way. “Once you have the money, it is essential to stay focused and not be foolish or arrogant. You need to ensure that you are using the money in the right places,” says Hejazi. For instance – would he use student app developers to lower his costs? Absolutely not, he explains: “You require the best people to work for you and create the app. It is essential to understand that your app is your product and everything is surrounded by it. So, the app needs to be perfect and created by the best developers. You cannot risk hiring students and manage them just to save a couple of dollars at the cost of your whole product! However, at a later stage when you have senior app developers who need assistance, of course you can look into students and interns.” 2. Estimating the right amount. As an SME owner or a new entrepreneur, how do you estimate a ballpark investment figure? An excerpt from Funding 101: How to Position Your Startup as a Good Investment by Brad Sugars explains this very well: “Think of your worst-case financial scenario. The ideal for securing money is to raise everything in one go, which means you need to be very realistic with your projections. “What, for example, is your worst-case financial scenario? Figure it out and use those numbers for your ask. Many startups don’t consider how expensive it can be to get customers, develop marketing and fund working capital. Typically, things take twice as long and cost twice as much as planned. “If you don’t like those numbers, see what your numbers look like if you cut your initial sales projections by 50 per cent, and double your expenses – then use that as a

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app developed out of the MENA region. It is exciting to see such innovation emerge from the region and we think this is only the beginning of more entrepreneurial talent coming out from here. Wally is setting the stage for a lot of SMEs out there to push their boundaries and fill gaps in the market. “I have tried the app; working for a startup myself, Wally was one of the first apps I began using to keep track of expenses and see where our costs were going. Wally was instrumental in making sure we’re staying on budget.” Now, the ‘acid test’ – how successful do you perceive Wally to become? He says, “We think Wally has a tremendous chance of success for a number of reasons: a) They have a solid management team with a clear vision and direction to take them forward and continue to innovate their product and; b) They have a well-defined growth strategy and know where they want to take Wally, which means that investment dollars will always be used in the right place – to keep Wally at the top of the list in addressing people’s needs.”

base and plug in an additional 30 per cent in costs. It’s better to raise more than you need rather than trying to secure a second round of financing later on.” Hejazi describes how he does it – “Have a clear strategy in mind. For instance, Wally’s next step is to be on Android soon. With that goal in mind, now work backwards – what is the cost of the best Android developer in town? And so on. I think ideally it should be an amount to keep your operations running for at least the next 18 months.” Wally has announced an internal funding “The worst thing to happen to a business of USD 400,000. What should their (or any is to run out of money. You should startup’s) main focus be after they have anticipate unforeseen circumstances and received adequate funding? have enough cushion for yourself – have “As a startup ourselves, we can tell you a contingency plan in mind.” from experience that one of the first things any business does when it gets 3. Establishing a business model funded is hire people. Not having the Speaking of finance – what is Wally’s financial manpower to grow in specific functions model? One of the key tasks for many tech such as marketing, sales and operations startups is identifying the best business limits business growth. New funds allow model to sustain their business without really the founders to finally hire the right team affecting the beauty of their product. to help them truly expand and grow to the Hejazi says, “Our fundamental focus next level. It is important to identify what is to perfect the product for our users so key areas to hire in and who are the right we haven’t concentrated on the business people to add to the team,” he explains. model for now. Nevertheless, we plan to introduce several premium paid features Finally, if there is one piece of advice that in the future like – specific tools for sales you would give to Wally at this stage, what people or travellers, etc. But – the basic app would it be? Sam advises, “Keep doing what you are will be offered at no cost.” doing. Stay strong. Celebrate the fact that The acid test you have raised your desired funding An outside perspective is critical for target. It’s a great achievement. We, as the growth of an SME and can reinvent entrepreneurs, need to celebrate the the way you look at your business! successes in our journey, as most of our SME Advisor spoke to Sam Quawasmi, lives are spent fixing problems!” Managing Director and Co-Founder, Eureeca to get an outside perspective. For an online version, please visit: How has your experience with Wally been? www.smeadvisor.com/2013/07/show-meSam says, “Wally is a creative and useful the-money-2/

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GETTING FINANCE

%DFN WR WKH EDVLFV 0Z ÄUHUJPUN `V\Y :4, ILJVTPUN H KH\U[PUN JOHSSLUNL& (Z HU SME owner/director, are you lacking strong comprehensive HK]PJL VU ZVTL VM [OL ÄULY HZWLJ[Z VM ÄUHUJPUN& 0U HU PU[LY]PL^ with Sanjay Kao from Dunia Finance, SME Advisor cut to the JOHZL HUK NV[ L_WLY[ VWPUPVU VU [OL M\UKHTLU[HSZ VM ÄUHUJPUN your SME…

Sanjay Kao, Consumer Business Head, Dunia Finance

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B

eing one amongst the 72,000 SMEs in the region, swimming against the complex tide of SME finance, is definitely no easy task. However, if your SME gets all its basics right – such as a detailed business plan or audited accounts – it can leverage your funding process and get you a step closer to your goal. Sanjay Kao, Consumer Business Head at Dunia Finance, believes it’s important for your business to tick all these boxes when approaching a bank or investor for finance –

1. Business plan “A strong business plan is essential. Not just for financing either. It’s the plan that gives your company direction and objectives. Without one, you will find it harder to get financing as well partners and employees, and ultimately you will be going on faith alone to ensure you have a genuine business. “A granular, detailed plan not only helps in financing but also acts as a roadmap for the business; helping build early discipline around sales, expenses, investments and cashflows. This helps a company stay the course and remain focused on its core objectives without digressing. “It also helps to demonstrate and build credibility with all stakeholders including lenders on plans and delivering them in an envisaged manner,” he explains. 2. Financial Accounting Managing accurate books of accounts is perhaps the first and most important step in building a strong business portfolio to attract investors. Pillar six of the Corporate Governance Code for SMEs outlined by Dubai SME is – “Maintain credible books of accounts, which are annually audited by an external auditor.” It further explains, “Appropriate accounting information is important for the successful management of a business whether it is large or small. A company’s credit or investment worthiness is often based on its books of accounts. The

“A Board of Directors is an important sounding board for any company. In my view, if feasible, every SME should try and establish a Board as well as it can. 3. Trade Credit Insurance It is also a good governance practice to This type of insurance helps protect the establish a Board. This helps banks and trade receivables of a business from finance companies feel reassured in the non-payment or delayed payment. Trade business – which ultimately helps with credit insurance widens the risk-taking loans and lending.” appetite of banks and investors. In the same vein, the Dubai SME report, In Kao’s opinion, “This depends The Corporate Governance Code For entirely on the nature of the business, Small and Medium Enterprises, mentions, the cashflow cycle and the nature of “Although many Dubai SMEs recognise your receivables. While this certainly the benefits of a Board and choose to provides a financier more protection, set up Boards from the very outset, the it’s no guarantee and the cost of such need for setting up a Board becomes insurance has to be measured against more pronounced for other companies the risk that is being sought to be covered when they reach a certain point in their growth path.” So, what exactly does the Board do? “A Board formalises the decision making 0DQDJLQJ DFFXUDWH process within companies, adding a layer ERRNV RI DFFRXQWV LV of checks and balances, facilitating better SHUKDSV WKH ÚUVW DQG strategic thinking, while also providing support and guidance to management,” PRVW LPSRUWDQW VWHS outlines the report. LQ EXLOGLQJ D VWURQJ And – does having a certified chartered accountant on the Board boost investor EXVLQHVV SRUWIROLR WR confidence? DWWUDFW LQYHVWRUV “It is a positive to have someone with an accounting background involved with the company but it’s not essential as well as the financing costs with and for them to be on the Board. The benefit without such insurance.” of having someone like this is twofold: it helps the company know exactly 4. Raft of committed investors what is going on in terms of finances Does spreading the risk across several and it also shows lending institutions investors increase the appeal of the that professionals are helping steer business? “Yes, normally that would the company, which is good for the be the case as it shows interest in the reassurance factor. This definitely business or opportunity. But again, it’s no needs to be complemented by having guarantee. Other key factors would need a seasoned CFO, maintaining good to be assessed including the nature of the accounting practices and controls as business, the background of the owners well as having professional auditors and the team involved in it, the business performing annual audits in a timely model, experience and track record of manner.” promoters etc.,” says Kao. company should utilise international accounting standards and credible independent accounting firms.”

5. Board of Directors Kao explains the key reasons for setting up a Board of Directors – it’s a great governance practice and it increases investor confidence in the business.

Investor perspective – what do they want to see?

Kao is part of a seasoned financial institution – Dunia Finance – which has a comprehensive raft of financial services including several solutions for

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SMEs such as credit cards, flexible loan to go public and secure the capital they accounting for a significant portion of facilities, secured and unsecured loans, needed to grow and expand. An initiative revenue and employment generation.â€? wage protection solutions, fixed deposits like this in the UAE would be helpful to smaller firms, but one of the key issues Cash is king! and much more. In light of his extensive experience in the for all the regional bourses is liquidity. While it is great to have a strong portfolio financial world, we ask Kao to put on the This would most likely be the case for of assets which could potentially assist shoes of potential investors and examine an SME focused bourse too. an SME in their quest for asset-based the key factors that they seek in an SME. “In my view, the Etihad Credit Bureau is lending, there is no arguing with the fact “It’s important to have a robust business the most important next step to helping that ultimately cashflow is of paramount plan, a good understanding of your SMEs receive the funding they need in the importance. business to build a strong business UAE. It will help greatly with visibility and So, how important is cashflow for an performance and credit track record credit history,â€? says Kao. SME? Does it hold its ground against assets? before you approach an investor for Kao replies, “Cash is king. If cash is financing. The major factor to watch r How viable is asset-based lending as a flowing in, repayments can be made, and out for is to assess the quantum of debt financial solution for SMEs? in an ideal world enough cash will be your business can support, the type of “This is certainly a good option for SMEs, flowing in to make investments in assets financing you might need (for example, but again it needs to be considered in too. So from that perspective, I think cash is it equity financing that you really need the context of your order book, business is the more important of the two. and not a loan) and approach the right pipeline and the type of business you Ultimately, cash is more liquid and provider who can partner in your long allows for more flexibility. term growth. Visibility on revenues is Having said that, there are a number important because the bank or finance of asset backed options which can be company wants to know where its &DVK LV NLQJ ,I FDVK LV pursued by companies even with a tighter repayments will come from.â€? Ă›RZLQJ LQ UHSD\PHQWV cashflow cycle. Typically, even with a Furthermore, other key factors that he strong cashflow profile, using an asset FDQ EH PDGH DQG LQ highlights are: a professional approach; backed borrowing option may prove to the amount of capital the business DQ LGHDO ZRUOG HQRXJK be more cost effective for a number of promoter is putting in; transparency in FDVK ZLOO EH Ă›RZLQJ LQ companies.â€? sharing information (both good and bad) WR PDNH LQYHVWPHQWV with the lender or investor; and the ability Risks and challenges LQ DVVHWV WRR to showcase the strengths of the business “The most important thing is to ensure model. your business pipeline is strong enough For instance, what would you look to ensure your covering your financial for in an SME that approaches Dunia are in. Asset-based financing typically commitments and repayments. Be Finance? results in lower cost of funding versus, patient and try not to bite of more than “At Dunia, we want to empower people, say, unsecured borrowings. Needless to you can chew. Also, it is important to enable success and enrich lives. As say, the key is to ascertain cash flows from give your business model time to grow mentioned earlier, key factors would be your business required to service the debt and stabilise before you add more debt.â€? the viability of the business model, prior and the effective cost of such a financing advises Kao. experience of the owner as well as his structure versus other alternates which “Many small firms secure financing team in the business area, their equity, might be available to the business,â€? from banks against the business owner and their approach to the business. explains Kao. in a personal capacity. In the early stages “We recognise that small and medium of a small business’ evolution, the owner business serve an important role in the Small vs. medium businesses typically has to demonstrate and provide UAE economy and are well positioned A lot of initiatives in the region are a lot of support to the business. This to meet their credit needs in a growing arguably focused more on medium-sized could involve providing personal assets phase. We provide a suite of financial businesses leaving the smaller businesses as collateral or personal guarantees as the products which are geared towards with little or no support – financially or owner. A good early discipline would be to small businesses whether it be loans, otherwise. maintain a separate set of audited accounts guarantees, payroll services, cashflow Kao says, “There is a big difference in for the business with earmarked assets in management tools, deposits and other the financing requirements and options the name of the business. This would allow services,â€? he says. for small and medium sized businesses. a standalone business financing model to They both have different needs and a one be built early on against which financing Alternative trends size fits all approach doesn’t suit them. can be accessed at the first available r What are your thoughts on the creation Typically the financing options available opportunity,â€? he concludes. of a stock market for SMEs? to the commercial segment or medium sized “Creating the Alternative Investment enterprises are far wider than small business For an online version, please visit: Market in London proved a very owners. Small enterprises form a critical www.smeadvisor.com/2013/07/back-to-thesuccessful way of helping smaller firms component of the UAE business landscape basics/

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WORKSPACE

7RS ÛRRU ERWWRP OLQH (U :4,»Z JOVPJL VM VMÄJL ZWHJL JHU IL H WV^LYM\S MHJ[VY PU P[Z HIPSP[` [V NYV^ HUK WYVZWLY Will your premises facilitate better margins and a more productive business dialogue - or drag your company down at every turn? We’re delighted to introduce this new, regular IYPLÄUN VU OV^ [V TH_PTPZL [OL VWWVY[\UP[` HUK JVU[HPU [OL YPZRZ" L]LY` TVU[O HU L_WLY[ H[ :LY]JVYW ^VYSK SLHKLY PU ZLY]PJLK VMÄJL ZWHJL ^PSS YL]PL^ OV^ NVVK VMÄJL THUHNLTLU[ JHU LTWV^LY H RL` HYLH VM `V\Y I\ZPULZZ >L RPJR VMM ^P[O H MHJ[ÄSL VU [OL HNLUKHZ [V UH]PNH[L HUK ILULÄ[ MYVT¯

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So it’s no surprise that, in line with this idea, serviced office space is expected to double in the next five years, and represents 12 per cent of the global office pie. According to an Emerging Markets Serviced Offices report by Instant, in the last 12 months alone, there has been a 21 per cent growth in this sector in emerging global markets such as Turkey, Brazil, Qatar and India - to name a few. All of which is certainly reason enough to pay attention to what has become a powerful evolving trend. Getting competitive advantage – let’s look at the figures!

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hether aiming for small-scale success or multinational development, the central idea behind any business is to make an impact. Sometimes, this is simply thinking about how to optimise your existing daily operational practices in strategic new ways. The best way to make this happen is having an inspiring space in a location that fits your needs. Enter the innovative concept of a serviced Office, an ideal solution for small or growing businesses, multinational branch offices and those with constantly changing needs. The serviced office concept really caught on when businesses realised that sharing office space and operational costs reduced their overheads and increased their possibilities. Along with this realisation came a variety of initiatives from the serviced office providers, which ‘raised the bar’ and ensured that top-flight serviced offices really felt like home and added value to just about every aspect of a business’ operations.

In today’s immensely competitive business climate, industry turnover is higher than ever before. Workers and market trends are both transient, but this is not to say that everything is impermanent and that there is no long-term. It is merely important to realise how modernising your business outlook might be to your immense advantage. As a company potentially on the lookout to make some changes, a serviced office can be a temporary solution for a permanent business address without interrupting the flow of your operations or losing your competitive edge.

$ VHUYLFHG RIÚFH PDNHV LW HDV\ IRU D EXVLQHVV RZQHU WR H[SDQG RU VKULQN WKHLU ZRUNVSDFH ZLWK FRQWUDFWV WKDW DOORZ WKHP WR FKRRVH WKH H[DFW OHYHO RI VHUYLFH QHHGHG The simplest way to define a serviced office is a fully-managed office solution that is immediately available to move into. Typically this includes flexible rental options, low deposits and a number of business services and facilities that smaller

businesses may not be able to afford. Overall, a serviced office makes it easy for a business owner to expand or shrink their workspace with contracts that allow them to choose the exact level of service needed. For example, the minimum term for a traditional office lease is three years, but with a serviced office, it can start at just one month; a 12 month lease is required only if you intend to officially establish and register your company. Once this has been decided, your attention naturally moves inside the office. However, a leading serviced office provider takes care of all basic essentials to save you on the cost and hassle. The beauty is that you can walk in with your laptop and be operational from Day One. There is someone to handle your calls, manage your office requirements and you don’t have to worry about repairs and maintenance, because a serviced office provider is also your dedicated landlord. The approximate cost to run your business in an office for two people from Dubai is AED37,153 per month. This figure includes your rental, phone and internet connections, office appliances, electricity bills and incidentals but not your HR fees. With a serviced office, you can save about 30 per cent by paying approximately AED 25,500 and enjoy all the additional perks. In line with your vision

Consider any potential expansion plans you may have, whether it is to keep up with the international presence your competitor is acquiring or simply because you think it is time to broaden your market outreach. Say you wanted to expand in three months’ time or need to change the location of your office: unlike a conventional office lease, a serviced office gives you the flexibility to downgrade or upgrade your office - or even terminate so you can move to another location. The minimum lease term available in a prime CBD building is three years, while a serviced office lease can range from one month to 12. What’s best is the unique pay-per-useonly system, so you can book and cancel as your requirements shift, whether it’s a seasonal office you need, space for a day of executive interviews or a fully functional

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WORKSPACE

key departments, for example Sales and Creative. On that note, for both IT and personnel support, a typical office structure’s pricing based on a full-time, salaried junior team member is AED 8,000. A serviced office offers the same benefits for as low as under AED 1,100! This is a big potential price difference and equally big savings. This way, you also get in-house and on-hand support from a well-trained team, without the extra steps and coordination of outsourcing. There are numerous other financial benefits. The topmost reason is reduced initial costs for starting a business or setting up somewhere new. This includes real estate related expenses as well as recruitment and salaries, even if it’s a small team. Budgeting strategies

administrative support that will afford you the time and energy for your core responsibilities. A serviced office may also be the right choice to build a more impressive customer interface without too many intimate glimpses ‘behind the scenes’, ensuring that your brand’s intellectual secrets stay secure. Can you afford full conference facilities and integrated suites on your own premises? If your business is based on direct interaction with clients and you have many visitors, it gives you just the style of facilities to match their expectations because you have discussed and designed it with your service provider. It can be a classic dĂŠcor, something funky or somewhere in between. The technology ‘edge’

Another advantage is the range of updated technology which is readily at your disposal, instead of having to invest in multiple infrastructures. You can effectively increase your IT setup, improving scale and efficiency while minimising cyber risk. Have you costed-out the financial implications of growth? In terms of connectivity (a must in today’s world), a non-serviced office set-up usually includes basic broadband internet access with 10 MB, contract period limitations, no technological support and periods of potential downtime, with an

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7KH PLQLPXP OHDVH WHUP DYDLODEOH LQ D SULPH &%' EXLOGLQJ LV \HDUV ZKLOH D VHUYLFHG RIĂšFH OHDVH FDQ UDQJH IURP PRQWK WR average price of AED1,500. If you opt for a serviced office, your business could utilise up to triple the data, have no blocked websites and a network that is both built and maintained in-house, for under AED1,100. Also, you never miss an urgent call or message, because information is relayed by either your secretary, or outside office hours by the system, all in real time. The people benefit

Ultimately, physical aspects aside, optimal use of office space with strong cross-departmental communication and a comfortable workplace lead to happy workers and in turn, higher productivity. With a serviced office, you can plan the exact shape of your office space so that there can always be dialogue between

Choosing a serviced office allows for forward budgeting, like planning ahead for any space upgrades that your business needs are likely to demand. You can go through your business forecast with the serviced office provider, identifying growth ‘hotspots’ and determining how much it will cost for a certain amount of additional space, for example if you have a project that requires extra team members for a certain month or business quarter, building this into your forecast while you’re still in January or even the beginning of the fiscal year. Another plus factor is lower maintenance fees for utilities and repairs. There is no property depreciation as time progresses and you have the flexibility to make changes without heavy fines. Finally, there’s the plus factor of improved client relationships - and thereby, ultimately profits - because of a highly professional, elegant setting that creates confidence in your customers. The idea of a serviced office is that whatever industry you’re in, you have an instantly operational set-up with all the right tools and without the steep start-up fees. Finding the right office is vital for any company, but a serviced office heightens the benefits and the immediate rewards; which means more cash, better cashflow, and therefore more opportunities for investment partners, stronger creditworthiness and more ability to invest in fixed assets, as and when required. And isn’t that what we all want? For an online version, please visit:

www.smeadvisor.com/2013/07/top-floorbottom-line/

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Our services include Corporate Governance, Business Establishments (Franchises, Small and Medium Enterprises), Market Due Diligence, Joint Ventures, Corporate Policies, Corporate Restructuring, Product Restructuring and Intellectual Property. Office Wing D-709, Dubai Silicon Oasis (DSO) Authority Building PO Box 444854, Dubai, United Arab Emirates Tel: +971 4 372 4422, Fax: +971 4 372 4423 Email: info@principle-consultants.com Website: www.principle-consultants.com

D-709 444854 +971 4 372 4423 +971 4 372 4422 info@principle-consultants.com www.principle-consultants.com

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PERFORMANCE

)URP D VSDUN WR D ÛDPH Is lack of cutting-edge technological resources a barrier to your business growth? Microsoft’s BizSpark initiative can empower your business and take it to the next level. Amintas Neto, Startups & Academia Lead - Microsoft Middle East and Africa Region, explains how…

I

f you want to empower a nation’s economy, what are the key areas you need to push? According to a recent report, they are entrepreneurship and innovation. In The Role of Entrepreneurship and Small and Medium Enterprises in the Development of the ICT Industry by Dubai Internet City (DIC), there’s no doubt that these are the two fundamentals. And – what combines ‘entrepreneurship’ and ‘technology innovation’ better than a tech startup?

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Technology startups have revolutionised the business arena – the likes of Cobone, Namshi, Nabbesh and many others – are great examples of entrepreneurial spirit and technological ingenuity, making it imperative to support and foster their continued growth. The DIC report further highlights the importance of encouraging this sector, “Since 2005, governments across the MENA region have taken numerous initiatives such as development of technology parks, incubation programmes and supportive regulations to encourage

entrepreneurs and startups. And, what’s the icing on the cake? It’s absolutely free of cost! Amintas Neto, Startups & Academia Lead - Microsoft Middle East and Africa Region, tells us how startups and entrepreneurs can use BizSpark to leverage their growth‌ First things first. What is BizSpark?

“The Microsoft BizSpark initiative provides technology, support, and community to promising startups and entrepreneurs, at no cost,â€? says Neto. An excerpt from Startupweekend.org explains further, “From the outset, BizSpark has offered startups access to Microsoft tools, software and licences at no cost. The programme has three goals: - Develop and support a global ecosystem of startups. - Learn how best to provide value to these partners in the rapidly changing technology industry. - Foster innovation, opportunity and economic growth around the world.â€? The three main aspects that Microsoft offers through BizSpark – technology, support and community – provide a complete 360 degree solution to startups. Here’s how‌ I. Technology –

II. Support –

Of course, having the best technology without adequate support and guidance on how to correctly understand and implement it can be catastrophic. “BizSpark offers an exclusive Support Centre for the MEA region, with access to a huge community of peers across the globe. Other benefits of interaction involve connection with investors, mentors and

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“This includes access to the Windows 8 operating system, Windows Azure, and the company’s other main platforms and application development tools,� says Neto. He explains that having the right technology when starting a business III. Community – can make all the difference. It is crucial Saving the best for last, the community for an SME to have the latest business aspect is perhaps the most important. software and stay on top of all new “BizSpark connects entrepreneurs and entrepreneurship and to reduce the time updates. BizSpark eases this process and startup owners to each other, enabling and money needed to start a company.� offers valuable guidance to SMEs at their them to share best-practices, ideas and stories. This network helps them tackle One such initiative that has successfully initial stages of growth. achieved the above by recognising the A great example is Nabbesh.com - “Being the day-to-day challenges that they might augmented rise of tech entrepreneurs – in the cloud enables us to scale and rapidly face in the early stages of setting up their as well as their desperation for guidance grow without having to plan traffic volumes business,� explains Neto. and mentorship – is Microsoft’s BizSpark. ahead. Our participation in BizSpark plus In addition, members can connect with It comes as no surprise that the programme made it very easy for us to be huge network of investors, VCs and other technology giant, known for its leading on Azure cloud and extend our accessibility influencers that could potentially invest position in global innovation, offers to be available on Windows 8 and Windows in the startup. not only technology but also support Phone devices,� explains Rima Al Sheikh, Neto adds that there are more than and community to up and coming Co-Founder of Nabbesh.com. 2000 members in the MEA region using

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this service and they have a strong international network of more than 50,000 entrepreneurial startups. What does BizSpark do?

It provides you with a comprehensive raft of Microsoft’s top and most contemporary products, so that your business has all the technology platforms it needs to get going! Who is eligible?

Microsoft lays down the eligibility criteria. Eligible startups must be: 1. Actively engaged in development of a software-based product or service that will form a core piece of its current or intended business. - To meet this requirement the software must: r "EE TJHOJêDBOU BOE QSJNBSZ GVODUJPOBMJUZ to the integrated Microsoft software r #F PXOFE OPU MJDFOTFE CZ UIF TUBSUVQT 2. Privately held 3. In business for less than five years, and 4. Bringing in less than USD one million in annual revenue. Microsoft may permit individual developers or others and/or separate technology entities who may not meet the standard eligibility requirements to join BizSpark from time to time. Also, startups who are actively engaged in software development but have not yet completed the formalities of establishing a business are also eligible for entry into BizSpark. Note as well that this requirement has been adjusted to add local variances calibrated to local economic conditions in the startup’s place of business, below. If a startup’s place of business is not listed below, then the revenue limit is USD one million. USD 750,000 China, USD 500,000 Korea, Malaysia, Poland, Russia, Spain, Ukraine USD 250,000 Egypt, Thailand, Turkey, Vietnam.

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entrepreneur is a BizSpark alum, they can buy software updates at a discounted rate, helping to maintain access to the latest technologies that will help to drive their business forward. The network is also always accessible, so that SMEs can maintain their valuable relationships with partners, peers and investors,” concludes Neto. Final verdict

With an array of benefits, Microsoft BizSpark is hard to ignore, especially for an aspiring startup or SME. However, it could be quite natural that startups hesitate forward this important part of the to be a part of a programme associated with economy. Microsoft began as a startup, an industry leader unsure about what they and as a company we feel compelled to are getting into. help other startups. Supporting the growth Milo Yiannopoulos tackles this dilemma of SMEs is an ethos that is ingrained in in her article on telegraph.co.uk, “So is it the company’s day-to-day activities, this worth getting tangled up with one of these sector is crucial in helping solve youth giants in your early years? Almost certainly unemployment challenges and ensuring - though everything is dependent, of course, constant innovations and being brought on the platform you’re building on. But while to consumers and business.” getting enrolled on a startup programme normally boils down to using the right Even though membership to the software or servers, for those companies programme is free, are there any who do have the right mix, access to the overhead costs that SMEs need to be well-connected individuals at the helm is wary of while using BizSpark? just as valuable as a few years’ free software.” As an SME owner/director, when is “Absolutely not – startups do not need to And – for the final acid test, we hear the right time to become a part of the worry about any overhead costs when what Ghady Rayees, Co-Founder of FOO utilising BizSpark. The aim is to provide – a mobile apps development company in programme? “All SME owners should consider joining a free set of solutions that can help the the Middle East – has to say, “It’s all about BizSpark as soon as their startup qualifies,” company grow,” says Neto. making tomorrow’s dream achievable suggests Neto. today! It’s time for a new app. With What happens after the three years of BizSpark we get the tools and services Isn’t it too good for true? What is the free membership? we need to make our business move.” motivation behind the initiative? “After what we refer to as ‘graduating’ from Neto says, “Not at all – BizSpark is a the programme, entrepreneurs can keep - at For an online version, please visit: manifestation of the support Microsoft no charge - all of the free software received www.smeadvisor.com/2013/07/from-awants to provide to SMEs to help drive from the BizSpark programme. Once an spark-to-a-flame/

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July 2013

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LEGAL

Safe and secure? Information security, the rules - and your business Continuing our series of features on the ever-rising tide of cyber crime, SME Advisor looks at the legal framework for enforcing information security - a vital area, because in 2012, 31% of all H[[HJRZ ZWLJPÄJHSS` [HYNL[LK [OL :4, ZLJ[VY >OPSL [OLYL»Z H \UP]LYZL VM OP [LJO ZLJ\YP[` ZVM[^HYL [OH[ H[[LTW[Z [V RLLW \Z ZHML ^OH[»Z [OL J\YYLU[ Z[H[L VM SLNPZSH[PVU HUK OV^ JHU [OL :4, WYLKH[VYZ IL JH\NO[& >L ZWVRL [V :HUH :HSLLT H[ SLHKPUN SH^ ÄYT (S ;HTPTP *V Information security obligations under UAE law

Generally, information security breaches result in one or more parties incurring loss or damage that can range from minor to catastrophic. Although the UAE has no consolidated information security law, the following pieces of legislation generally govern information security in the UAE: r Cyber Crimes Law Federal Law No. 5 of 2012 (“Cyber Crimes Law”) provides for a range of offences committed online including issues like hacking into IT networks to steal data, hindering access to an IT system and distributing viruses. Generally, the relevant information security-related provisions

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of the Cyber Crimes Law prohibit the following: - Unauthorised access to an IT system resulting in access to personal data; - Unauthorised access to an IT system to obtain government data; - Hindering access to an IT system; - Disabling an IT system by introducing spam email and virus programmes; - Hacking into an IT system. r DIFC Data Protection Law The DIFC Data Protection Law 2007 and its Regulations (together referred to as the ‘DIFC Data Protection Law’) regulate the processing and transfer of personal data including sensitive personal data located in the Dubai International

Financial Centre (a free zone hereinafter referred to as ‘DIFC’). Specifically, the DIFC Data Protection Law requires all data controllers (i.e. any person in the DIFC who alone or jointly with others determines the purposes and means of the processing of personal data) to implement appropriate technical and organisational measures to protect personal data. Additionally, obligations to secure information properly arise in a range of other laws and regulations, including the Dubai Healthcare City (‘DHCC’) Governing Regulations and the Federal Credit Information Law which require data holders to institute appropriate information security policies to protect health and credit-related data.

Government security standards

Meanwhile, the governments of Abu Dhabi and Dubai are in the process of developing their own information security standards in an effort to maintain the security of critical government information. AD Information Security Policy The Abu Dhabi Government Information Security Policy and related Abu Dhabi Government Information Security Standards (together referred to as the ‘AD Information Security Policy’) constitute the most comprehensive regulation addressing government data in the Emirate of Abu Dhabi. The AD Information Security Policy defines requirements for ensuring that critical government information is secure regardless of the medium in which the information resides. Generally, pursuant to the AD Information Security Policy, all Abu Dhabi government entities are required to: r $BUFHPSJTF UIFJS JOGPSNBUJPO BTTFUT (including information systems) based on the importance and critical nature of the relevant asset; r %FWFMPQ BO *OGPSNBUJPO 4FDVSJUZ Programme Plan; r #VJME UIF SFRVJSFE DBQBCJMJUJFT UP NPOJUPS the information systems and manage information security incidents in the entity; r 3FHVMBSMZ SFQPSU UP UIF "CV %IBCJ Systems and Information Centre (‘ADSIC’) - responsible for assisting the government entities in implementing their respective Information Security Programme Plans. All Abu Dhabi government entities must comply with the obligations set out in the AD Information Security Policy to ensure the confidentiality, integrity, and availability of government information. Additionally, Abu Dhabi government entities must ensure that suppliers engaged by them adhere to the applicable obligations of the AD Information Security Policy. Dubai Information Security Policy With the passing of the Executive Council Resolution No. 13 of 2012 - Regarding the Information in the Government of Dubai (‘Dubai Information Security Resolution’), the Dubai e-Government Department is now set to develop an information security policy for the government of Dubai.

Pursuant to the Dubai Information Security Resolution, the policy will include: r (PWFSOBODF PG JOGPSNBUJPO TFDVSJUZ r *ODJEFOU BOE SJTL NBOBHFNFOU r "DDFTT DPOUSPM r 1SPDFTT TZTUFN BOE DPNNVOJDBUJPO management; r %FWFMPQNFOU BOE NBOBHFNFOU PG information systems; r -FHJTMBUJWF SFHVMBUJPO The 2012 Dubai Information Security Resolution is Dubai’s first step towards

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r *NQMFNFOU BOE PQFSBUF UIF *4.4 QPMJDZ controls, processes and procedures. r "TTFTT BOE XIFSF BQQMJDBCMF NFBTVSF process performance against ISMS policy, objectives and practical experience and report the results to management for review. r 5BLF DPSSFDUJWF BOE QSFWFOUJWF BDUJPOT based on the results of the internal ISMS audit and management review or other relevant information, to achieve continual improvement of the ISMS. The standard does not provide any detailed operational direction as to how to actually implement these processes; that is left up to each organisation to work out for itself, on the basis that there can be no ‘one size fits all’ information security management system. However, the standard does provide overall requirements in terms of the approach to be taken when developing and managing an ISMS.

PCI DSS The Payment Card Industry Data Security Standard (‘PCI DSS’) is a security standard developed and administered collectively by the leading credit card companies (including American Express, Visa and Mastercard). The PCI DSS is globally facilitating a further exchange of information applicable, and applies to any person, between the private sector and government business or organisation that handles entities in Dubai. credit card data - from the small retailer through to the multinational organisation. Corporate security standards The PCI DSS standard contains 12 overall There is no uniform standard that can be requirements which need to be satisfied in used as a benchmark to judge the adequacy order to establish compliance. The PCI DSS of an information security regime. Instead, standards are significantly more granular a variety of industry standards have than the ISO 27001 standard - for example developed, which can be used as a basis one of the 12 requirements of the PCI DSS for implementing ‘reasonable’ measures in standard is to “Install and maintain a firewall the context of information security. configuration to protect cardholder data�. While PCI DSS is confined in scope ISO/IEC 27001 to organisations handling credit card ISO 27001 relates to the development and transactions, in practice its detailed maintaining of an Information Security provisions provide general practical Management System (‘ISMS’) within an advice on a number of security issues for organisation. The system constitutes an organisations that are considering their integrated set of documented policies and information security regimes (particularly procedures. The fundamental approach the more technical aspects of those regimes). of ISO 27001 can be expressed as follows: For further information please contact r &TUBCMJTI *4.4 QPMJDZ PCKFDUJWFT Chris Appleby at c.appleby@tamimi.com processes and procedures relevant to or Sana Saleem at s.saleem@tamimi.com. managing risk and improving information security to deliver results in accordance For an online version, please visit: with an organisation’s overall policies ww.smeadvisor.com/2013/07/safe-andand objectives. secure/

July 2013

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INDUSTRY WATCH

6859(< $66(66(6 &25325$7( 63(1',1* UAE companies are adopting more comprehensive expense management WYHJ[PJLZ [V PUJYLHZL LMÄJPLUJ` HJJVYKPUN [V YLZLHYJO YLSLHZLK I` (TLYPJHU Express® Middle East. have introduced new corporate expense policies, and 27 per cent have reduced the number of expense activities which can be billed back to the company. 4. Cost reduction has also been important, with a third (33 per cent) of respondents switching to less expensive suppliers, 27 per cent have reduced executive travel, a fifth (20 per cent) have reduced business class travel, and the same number (20 per cent) have per diem allowances. However, only three per cent of respondents reported they have cut back on corporate hospitality in the last six months, indicating the continued importance of corporate hospitality in the UAE.

Mazin Khoury, Chief Executive Officer of American Express Middle East

T

he American Express Middle East Corporate Spending Survey, conducted by YouGov, surveyed corporate expense managers in the UAE and found that, following the financial crisis, 70 per cent of study participants said their companies are now more financially conservative, but rather than spending less, they are spending smarter, focusing on cost management.

Key highlights of the survey:

1. When asked to what extent their company’s interest in improving different business processes has changed as a result of the financial crisis, 87 per cent reported that planning, budgeting and forecasting have become a higher priority. 2. Other processes that have taken on greater importance for UAE businesses include internal cost management reporting (70 per cent) and cash management (70 per cent). 3. Half of the participants (53 per cent) said that they have renegotiated contracts with suppliers, a third (33 per cent)

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5. 67 per cent of participants reported that they now have a clear, company-wide corporate expense management policy in place, while another seven per cent have an intention to develop one. Additionally, among companies that have become more conservative since the financial crisis, 53 per cent said they are implementing new expense management tools to give them greater visibility over outgoings, 44 per cent have introduced new tools to help with liquidity, and 35 per cent are introducing simpler expense management processes. 6. Addressing their outlook for corporate expenditure for the coming year, 47 per cent of UAE participants said they expect expenditure to increase, compared to 20 per cent who anticipate a decrease. 33 per cent of respondents said they are likely to maintain their current corporate spending level in 2013. Of those expecting an increase, the areas of IT equipment (53 per cent), business travel (40 per cent), employee training (37 per cent) and logistics (37 per cent) are where companies expect to see most growth in controllable expenses. “A clear consequence of the financial crisis is that companies in the UAE have become shrewder and more informed when it comes to controllable expenses,” said Mazin Khoury, Chief Executive Officer of American Express Middle East. “It is not so much that companies are solely focused on reducing their costs, rather, their overriding objective post the crisis appears to be a desire to extract the maximum value out of every dirham they spend.”

12 6&$5&,7< 2) WEALTH IN THE GCC UAE ranks ninth globally by proportion of millionaire households as revealed by a recent report.

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he thirteenth annual global wealth management report by the Boston Consulting Group (BCG) stated that the UAE has the world’s ninth highest density of millionaires, with four per cent holding private wealth of at least USD one million. In the study, Maintaining Momentum in a Complex World: Global Wealth 2013, BCG addresses the current size of the market, the performance levels of leading institutions, and the state of offshore banking. The report also provides a thorough analysis of the key trends shaping the business landscape. Key highlights:

1. The UAE ranks fifteenth in the world by ultrahigh-net-worth (UHNW) households, defined as households with more than USD 100 million in private wealth, with three out of 100,000 households falling into this category. 2. On a regional level, the report shows that private financial wealth in the Middle East and Africa (MEA) grew to USD 4.8 trillion in 2012, an increase of 9.1 per cent from USD 4.4 trillion in 2011. Wealth held in equities in the MEA region grew by 18.3 per cent in 2012, as compared to increases of 9.2 per cent in bonds and 5.2 per cent in cash and deposits. 3. The report asserts that private wealth in MEA will grow to an estimated USD 6.5 trillion by the end of

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Markus Massi, Partner and Managing Director at BCG Middle East

100,000 households falling into this category. Kuwait ranks seventh and UAE comes in fifteenth with seven and three households per 100,000 in this segment, respectively. 5. Globally, private financial wealth grew by 7.8 per cent in 2012 to a total of USD 135.5 trillion. The rise was stronger than in 2011 and 2010, when global wealth grew by 3.6 per cent and 7.3 per cent. 6. The total number of millionaire households reached 13.8 million globally in 2012, or 0.9 per cent of all households. The U.S. had the largest number of millionaire households (5.9 million) overall, followed by Japan (1.5 million) and China (1.3 million). “Qatar ranks first in the world with the highest density of millionaires, with 14.3 per cent holding private wealth of at least USD one million. Kuwait ranks third with 11.5 per cent, while Bahrain (4.9 per cent) and the United Arab Emirates (four per cent) ranks seventh and ninth, respectively,� said Markus Massi, Partner and Managing Director at BCG Middle East.

July 2013

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INDUSTRY WATCH

%( $ 723 3(5)250(5 Top strategists and Co-Heads of Bain & Company’s global strategy practice, Chris Zook and James Allen, reveal the secret to being a successful best performer.

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ccording to the authors – Chris Zook and James Allen, nearly half of what differentiates the best performers from the worst, in any industry; lies in how these Great Repeatable Model companies exemplify three simple, yet powerful, business principles. Their book, Repeatability: Build Enduring Businesses for a World of Constant Change (Harvard Business Review Press, March, 2012) advances the concepts first articulated by Zook and Allen more than a decade ago in their groundbreaking analysis of sustained value creation from Profit from the Core (HBRP 2001). They lay down the three powerful yet simple business principles of Great Repeatable Model companies:

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r A Well-Differentiated Core: The authors reveal that 93 per cent of the top 20 per cent of performers had some strong form of differentiation in their core. They classify 15 types of differentiation – from low cost to differentiated product or service – that help top performers stand out three times better than the bottom 30 per cent of performers. r Clear “Non-negotiables�: Companies with Great Repeatable Models also have well-defined core principles that are widely and easily shared within the company, from top executives down to employees on the front line. Such shared principles, specifically defined by the authors, have among the highest correlations to business performance. In fact, Zook and Allen’s research shows that this is the number one place where strategies break down, accounting for roughly 50 per cent of the yield loss. r Closed-Loop Learning: Top performers have developed learning processes to help them adapt faster than their competitors. For example, they may have developed methods to gather instant, actionable feedback from customers. Speed of adaptation is key. As the authors noted: “Business history is littered with great business models like Kodak, General Motors, Xerox and Sony that eventually succumbed to their ‘arrested adaptation’ and not being able to change fast enough.� James Allen said: “The Great Repeatable Model resonates within the Middle East business landscape because of the huge number of family businesses in the region. Repeatability is an important concept

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James Allen, Co-Head of Bain & Company’s global strategy practice

within the region’s dominant business model as the ‘founder’ mentality is easy to pass on between family members. This means that founding principles as well as positive attributes of an institution are more likely to be transferred from one generation of business leaders to the next.� The authors drew on significant primary data sources including a comprehensive survey of 377 global executives, a database of 8,000 global companies tracking strategy against results over 25 years, and another database of 200 companies tracking practices, business models, and performance. The book features 30 case examples, many with executive interviews, and focused analysis on groups of high performers.

INDUSTRY WATCH

0(',$ 75(1'6 '85,1* 5$0$'$1 A recent report gives seasonal advice on how to change your social media strategy and increase interaction during Ramadan. the driving forces. We monitored thousands of tweets and Facebook posts in nine countries to study the user behaviour. Instead of looking at their social media platforms first thing in the morning when they wake up or get into work, our results show that during Ramadan, people are most active on Twitter early evening at approximately

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he Online Project (TOP), a social media agency in the Middle East, launched a report that highlighted the behavioural trends of consumers in several Middle Eastern countries during the holy month. The study observed Facebook and Twitter activity in nine different countries – Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, KSA and the UAE. It analysed levels of engagement, sentiment, perception and the time of their interaction. Key findings:

a) The results revealed an increased use of social media platforms – by 30 per cent – during the holy month of Ramadan. b)Furthermore, it reported that there was a shift in the time of the day during which users engage with social media communities. Users were now using social media later in the day. c) Their engagement with brands was seen to be hugely multiplied during Ramadan providing businesses with the ideal window to communicate with customers. Zafer Younis, CEO of The Online Project said: “Having discovered that social media consumption and user habits significantly change during the holy month, we set out to study the outlying variable of this change to isolate

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7 pm, just before they break their fast. Therefore, if brands wish to take advantage of this spike in audience, they should also consider posts that include content tailored to specific audiences that is entertaining or value-adding.� TOP offers their recommendations to maximise your interaction with consumers during Ramadan: 1. Recognise that Ramadan is a unique time in the Arab world both online and off. As a result, lessons you have learnt about your communities during the year may not apply during the holy month so adapt your campaign to the recommended timings to make the most out of your advertising campaign. 2. Align your publishing times with your audience and maximise engagement. 3. Optimise your content mix as user interests’ shift during the holy month. Adapt your content accordingly to stay relevant and build stronger relationships with your audience. 4. Increase your advertising support budgets during Ramadan. The holy month enjoys higher organic engagement rates so your budget can push your content further in Ramadan. 5. Implement integrated marketing campaigns by interlacing social media usage increase in-line with TV, radio, and print consumption to deliver higher multiplier effects in Ramadan.

INDUSTRY WATCH

%,* '$7$ 72 (032:(5 75$9(/ ,1'8675< Harvard Business School professor Thomas H. Davenport, reveals how big data can YLZOHWL [OL M\[\YL VM [YH]LS ^P[O WV[LU[PHS ILULÄ[Z MVY IV[O [YH]LS JVTWHUPLZ HUK travellers alike. industry whilst assembling the necessary data science skills and formulating an overall big data strategy for their organisations. 2. Big data offers major opportunities for travel companies to improve both the business and experience of travel: the benefits of big data include better decisionmaking, greater product and service innovation and stronger customer relationships that will be delivered by new approaches to customer management, revenue management and internal operations. 3. Pockets of innovation using big data are present in the industry today: the study includes examples of how leading travel firms are making use of big data. For instance KAYAK’s price flight forecasting model, which presents customers with the likely change in a flight’s price over a seven-day window, to Air France-KLM’s use of Hadoop as the basis of a group-wide revenue management system.

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ig data has the potential to transform how travel companies deliver services to travellers, according to a major independent global study. The study suggests that businesses must make big data a top priority in order to truly maximise its benefits and ensure a more intelligent and responsive travel experience in the process. The study, At the Big Data Crossroads: turning towards a smarter travel experience, highlights the emergence of new technologies and strategies for managing big data, and outlines how big data can be harnessed to focus travel around customer needs and preferences, not industry processes. First things first. What is Big data? webopedia.com defines, "the term big data - especially when used by vendors - may refer to the technology (which includes tools and processes) that an organisation requires to handle the large amount of data and storage facilities. Key findings from the study are: 1. Now is the time to act: Professor Davenport urges travel firms to start benchmarking their maturity against the

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4. Emerging technologies will be key to the big data evolution: the onset of new open-source software for dividing data processing jobs across multiple commodity servers, together with new types of databases including ‘columnar’ and ‘vertical’ approaches, and emerging programming languages like Python, Pig and Hive, combine to deliver the potential to harness big data. 5. The effective deployment of big data initiatives is not without challenges: the study finds that to access the big data opportunity the travel industry must overcome significant challenges, including: data fragmentation across multiple systems; co-existence of both big data and traditional data management architectures; finding and recruiting scarce big data science skills; and managing data responsibly and in the interests of all. Thomas H. Davenport, Visiting Professor at Harvard Business School, Co-founder and Director of Research at the International Institute for Analytics, and study author, commented: “The travel industry stands at a big data crossroads today, with new technologies and techniques offering the potential to translate increasing volumes of data into higher profits and more efficient operations. Some leading companies are pioneering the use of big data and already seeing a huge impact. Airlines, airports, hotels, rail companies and travel sellers need to ask themselves if they have a big data strategy in place, and if it will allow them to be at the forefront of this opportunity.”

THE INFLUENCE 2) 62&,$/ 0(',$ Social media continues to impact our lives in more ways than one. A recent study reveals more... The research also surveyed parents in Arab countries suffering from political instabilities, violence and civil strife. Around 68 per cent of respondents in these countries said that online resources can help their children catch up on material lost due to short or long interruption in schooling. The report is the latest of the series spearheaded by the Governance and Innovation Programme at the Dubai School of Government. The findings also revealed that Arabic language continues to be the fastest growing language on different social media platforms globally. For example, the percentage of Arabic tweets generated reached 74 per cent of total tweets in the region in March 2013, up from 62 per cent a year ago. Facebook registered an increase of 10 million users between June 2012 and May 2013. The number of active Twitter users in the Arab World has also grown exponentially from just over two million to 3.7 million in the past year. In March 2013, Arab Twitter users generated 336 million tweets - almost double the number of tweets generated in March 2012. The report additionally states that the number of LinkedIn users in select Arab countries stands now close to five million. "Transforming Education in the Arab World: Breaking Barriers in the Age of Social Learning”, the fifth edition of the Arab Social Media Report series was launched by the Dubai School of Government’s Governance and Innovation Programme. In addition to analysing patterns, demographic breakdowns and usage trends of social media platforms in the Arab region, this edition of the report focuses on the impact of social media on education and life-long learning in the region. The Governance and Innovation Programme at DSG conducted a regional survey with around 4000 participants, exploring perceptions about the quality of schooling in the region, the use of technology and social media in the classroom at different educational levels, interruptions to schooling due to conflict, as well as views on educational reform. In terms of technology and social media use in the classroom, 55 per cent of the teachers who responded to the survey said they use social media as a classroom resource, while 10 per cent of the parents surveyed indicated that their children have access to social media platforms in the classroom, and more than half said their children’s classrooms do not incorporate technological tools. In contrast, nearly 56 per cent of the parents are concerned with the distractions social media cause to their children.

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Analysing demographics, the report reveals that the UAE continues to score the highest amongst all Arab countries in terms of Facebook penetration at 41 per cent, while Egypt claims around 25 per cent of Arab Facebook users and Saudi Arabia has more than half 50 per cent of the Arab active Twitter users. However, most GCC countries saw a drop in social media adoption for the first time in 2013. The report also analysed the Twitter activity of selected official government accounts. In line with the rapid growth of Arabic language on social media, the findings also reveal that Arabic is the preferred language for Twitter conversations among government entities and their respective Twitter followers in the Arab region.

July 2013

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TECHNOLOGY FOR BUSINESS

%XVLQHVV UHJLVWUDWLRQ DW \RXU ÚQJHUWLSV A wide range of services, including business registration and licensing, can be accessed with added ease on your iPhone.

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new app that will enable businesses and investors to conduct a range of business registration and licensing transactions is now available to iPhone users in its first phase. In addition, the app will also offer services like trade name reservation, renewal of trade names, initial approval of licences, enquiry about fines, as well as company lookup (search for existing companies operating in Dubai and information on their business activities). Introduced by the Department of Economic Development (DED) in Dubai, the app comes in line with the Mobile Government (m-government) initiative of His Highness Sheikh

,QFUHDVH FXVWRPHU OR\DOW\ Effective network performance can boost subscriber loyalty among SmartPhone users, according to the Ericsson ConsumerLab report. Ericsson’s recent report revealed that users have high expectations from mobile networks and an improved network performance can help maintain customer loyalty – providing operators with a competitive advantage.

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Mohammed Bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai, to provide 24/7 access to the public to all federal and local government services in the UAE within the next two years. “The e-services launched from time to time by the Department of Economic Development have significantly improved the ease of doing business

About 50 per cent of all mobile phones sold globally in Q1 2013 were SmartPhones, and by 2018 up to 50 per cent of handsets in the Middle East and Africa and Asia Pacific regions will be SmartPhones – a top reason why network performance should be a priority for operators. Relatively low levels of satisfaction with network performance often result from SmartPhone users becoming tired of waiting. Reliability and performance are vital to SmartPhone users. Thus, providing a network experience that is good, reliable and efficient can make all the difference. Furthermore, after improving network

in Dubai. We are keen to support the Mobile Government initiative of His Highness Sheikh Mohammed Bin Rashid Al Maktoum as it will add to overall competitiveness in Dubai and the UAE and will allow us to showcase our alignment with the future,” said His Excellency Sami Al Qamzi, Director General of DED. Al Qamzi added: “The main focus of DED and its agencies is on positioning Dubai on the map of the most competitive cities in the world, which in turn will support trade and retail activity, as well as promote economic well-being and sustainable economic development.” Mohammed Shael Al Saadi, Chief Executive Officer of the Business Registration & Licensing (BRL) sector in DED said that the app is a strategic addition to business in Dubai as 95 per cent of the BRL services are available online. “Unrestrained access to government services in Dubai will be another major advantage for businessmen and investors for whom the emirate is a destination of choice. We will bring more BRL services on the new app and also extend it to the iPad and Android platforms in the next phase,” Al Saadi said.

performance, operators also need to ensure that the change is communicated to their customers. Once customers become aware of the changes, they will be more likely to stay loyal with the operator. The ConsumerLab research looked into the factors that influence users’ loyalty to operator brands, said Anders Lindblad, President Ericsson Middle East Region. “As the number of SmartPhone users continues to increase across the region, we expect that now more than ever, network performance will be an important factor that influences consumer loyalty to an operator brand.

At the same time, we see that operators are keeping network performance on top of their agenda in order to continue to meet subscriber demands. The Ericsson study revealed that when service requirements such as reasonable waiting times and sufficient coverage are not met – especially when people are in transit – consumer loyalty suffers. However, with the proper technology and infrastructure in place, operators can ensure that their networks are capable of maintaining user satisfaction, and at Ericsson we are committed to support our clients in doing so,” he continued.

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TECHNOLOGY FOR BUSINESS

0LFURVRIW KHOSV HPSRZHU 60(V The technology giant reinforced its support to startups and SMEs in the region at a recent conference.

'HOOoV 60% WDUJHWHG VROXWLRQ Dell announced the Middle East launch of its extended converged infrastructure portfolio, which includes the first converged solution specifically built for SMBs.

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ith a paradigm shift towards converged infrastructure emerging, two of the biggest players in the market — Dell and HP — are determined to take a market lead to offset the rapid losses they have both experienced in their respective PC divisions. Last month, Dell reported a 79 per cent plunge in profits for the quarter ended May 3, as CEO Michael Dell continues his fight to take the company private. The company hopes targeting a converged solution toward the SMB space — with the launch of Dell PowerEdge VRTX — will aid muchneeded growth by capitalising on the service and software capabilities it has built in recent years. Converged infrastructure solutions bring together networking, servers and storage into a single chassis, meaning all components are controlled by a single management console. Having just one console and vendor simplifies IT for the end user by eliminating the complexity, cost and sprawl of having disparate external devices and multiple management tools. IDC has predicted spending on such systems to grow by over 54 per cent between 2011 and 2016. However, all the major vendors have so far only released converged

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solutions that are built for larger enterprises, many of which face difficulty in migrating away from existing setups, according to Basil Ayass, Marketing Director, Dell ME. “At GITEX last year, we showcased what we called Dell vStart,” said Ayass, who spoke to CNME at the launch in Dubai. “It’s a half rack, it starts at USD 70,000 and goes all the way up to USD 200,000, and it’s for large enterprises, because I believe we thought convergence was an enterprise play. “But what we’re seeing is that SMBs are adopting convergence, to simplify their lives. With SMBs, you’re starting with a greenfield and a very small investment, so it’s very easy for them to adopt convergence. “What we’re doing differently is, for the first time, we’re now introducing something that is converged to SMBs. All the major vendors have converged solutions that are much larger.” Dell’s portfolio expansion also includes the next wave of its converged infrastructure offerings, Active Infrastructure 1.1, which adds new validated workshops, a broader portfolio of pre-integrated systems, and enhancements to the unified management platform. Source: www.cnmeonline.com

Showcasing the company’s commitment to empowering SMEs and leading the future of digital media through Windows 8 App innovation, Microsoft hosted seven startups apps at its booth at ArabNet, a digital gathering in the region, highlighting successful entrepreneurial cases supported by the Microsoft BizSpark programme. Bizspark, a Microsoft programme that provides technology, support, visibility, and community to promising startups and entrepreneurs at no charge, was accessible at the Microsoft booth at the event, through the BizSpark Adoption Kit, for free.

Microsoft’s alignment with ArabNet highlighted its ongoing commitment to supporting entrepreneurs in the region, addressing youth unemployment and in turn contributing to the UAE national aspiration to be among the best countries in the world by 2021. Microsoft is looking to support high impact startups such as Nabbesh.com which currently connects thousands of freelancers across the MENA region with project-based work opportunities, effectively tearing down national borders, leveraging technology to enable virtual and remote opportunities and creating wealth for individuals. “Microsoft understands the importance of empowering SMEs as a way of creating ‘Generation Y’ jobs, and is focused on providing the necessary tools to startups in the UAE and region,” said Charbel Fakhoury, VP Sales, Marketing & Services, Middle East and Africa Region at Microsoft. He added, “Partnering with ArabNet helps us to connect with this key audience and share the latest Windows 8 innovations, which effectively use technology to service and nourish the SME community.”

TECHNOLOGY FOR BUSINESS

7RS WHFKQRORJ\ VROXWLRQV Leverage the growth of your SME with the latest ‘Business Cloud Platform’ by du.

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u has announced the expansion of its managed services portfolio with the launch of its newest enterprise solution, Business Cloud Platform in partnership with Encloud. The Business Cloud Services Platform provides du enterprise customers with access to a broad range of flexible cloud services, covering infrastructure platform and software. Business Cloud Platform from du offers standard cloud building blocks that support multiple market segments, from small to medium enterprises (SMEs) through to large enterprise customers. du and Encloud have partnered with Cisco, EMC and Citrix to bring the best technology solution in the market. The services offered are customisable based on individual requirements, giving the customer complete control of

&RQWUROOLQJ F\EHUFULPH A recent research by Gulf Business Machines (GBM) revealed that more than 65 per cent of IT experts in the GCC believe that the region is a prime target for cyber criminals. With cybercrime escalating quickly, GBM’s research reported top reasons behind the phenomenon. Lack of employee awareness was one concern with 35 per cent of incidents being staff related. The other concern was the increase in the use of social media within companies.

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their cloud investment with continuous access to new cloud products. du Business Cloud Services have been designed to offer a one-stop shop for a wide array of services, all delivered from a virtual data centre out of a world class hosting facility in Dubai. Each service is backed by technical experts and can be provisioned in minutes, with easy scalability and a Pay-as-youGrow Opex model. du Business Cloud offers flexible packages for Virtual Servers, Virtual Storage and Data Backup with bundled bandwidth; However, customers can subscribe to more advanced services such as PrivateCloud, Community Cloud, Virtual Desktop and so on, with additional array of services to be added in the near future. “Managed services provide companies with the opportunity to employ a full

Furthermore, the results of the research also highlighted that 25 per cent of respondents said their organisations have not been conducting regular proactive screenings to ensure that their IT infrastructure and critical data are protected. They also expressed a false sense of security as the survey showed that 60 per cent of respondents believe that the number of successful attacks will decrease in the next 12 months. “Companies are more aware of IT security issues than ever before. Although organisations are showing more interest in pre-emptive measures against possible cyber threats, they are not always taking the appropriate

suite of IT services to suit their business needs, without having to directly employ professionals within their company. The launch of du Business Cloud Platform services brings further value to our managed services suite, giving our enterprise customers the freedom to focus on their core business while we take care of the rest,” said Hatem Bamatraf, Executive Vice President Enterprise, du. “Cisco’s sees this strategic collaboration with Encloud and du to deliver cloud based enterprise services as significant because cloud computing has come of age. As cloud traffic continues to proliferate in a new world of many clouds, the forecast confirms that strong growth in data centre usage and cloud traffic are global trends, driven by our growing desire to access personal and business content anywhere, on any device. It is clear that the next-generation Internet will be an essential component to enabling much greater data centre virtualisation and a new world of interconnected clouds,” commented Fady Younes, Client Director, Cisco UAE.

measures,” said Hani Nofal, director of Intelligent Network Solutions (INS) at GBM. “Nearly half of the organisations polled spend up to 10 per cent of their IT budget on security. However, we expect this number to increase in the future,” continued Nofal. Similar GBM research conducted last year showed that just over a third of those polled claimed that their organisations’ IT policies completely prohibited access to social networking websites. Today, this number has been cut in half, indicating that more businesses are adopting and embracing social media. “Companies in the region have been exploring social media as a new way of communicating with the

public. Enterprises are, therefore, opening their internal networks and allowing access to social media. This is increasing the potential of cyber risks for organisations and making them more vulnerable to cyber security attacks,” said Nofal. GBM has been at the forefront of addressing challenges resulting from an ever-changing cybercrime eco-system in the region. The research coincides with the launch of GBM’s Security Framework, which assists users with mitigating risks. At the core of its IT security offering, the Security Framework enables customers to meet and exceed IT industry best practices in order to secure their infrastructure.

THE NEXT LEVEL

1DWXUH YV 1XUWXUH Can entrepreneurship really be taught? How does entrepreneurship education add value, if at all, to your career growth? Educational experts at Cass Business School reveal...

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hen it comes to entrepreneurship, there is arguably no universal mantra, secret formula or magic potion. However, what most successful entrepreneurs have in common is: Aptitude to take risks Adaptability to changes Ability to identify and seize new business opportunities A mind-set that puts a positive spin on events

However, the question to be asked, and one that is asked quite too often, is – Can entrepreneurship really be taught? The obvious answer is no. With the likes of Bill Gates and Steve Jobs who created entrepreneurial history with little or no educational background, it is hard to come to terms with the fact that such skills can be attained by spending a few years (and thousands) at a high-profile business school.

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In a bbc.co.uk article by Sarah Treanor, UK business coach and turnaround specialist Peter Ryding, agrees that successful entrepreneurs are born, “I would say the simple answer is 70 per cent born, 10 per cent nurture, and 20 per cent trainable.” On the flipside, however, “Entrepreneurship can be taught, but passion for an idea, for the opportunity, has to come from the entrepreneur,” says Caroline Daniels, a professor at Babson College, in ‘Can School Make You a Better Entrepreneur?’ by Antonio Neves on Entrepreneur.com. This sentiment is reflected in a 2011 survey by the Association of Business Schools which revealed that entrepreneurship is one amongst the top five content programmes that prospective MBAs want their schools to offer. With the rising interest in entrepreneurship and the huge shift in number of self-employed individuals in the recent years, major colleges and universities have definitely taken notice of this subject.

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THE NEXT LEVEL

For instance – at Cass we also have the Peter Cullum Centre for Entrepreneurship. New ventures by Cass alumni receive incubation support, and they can also receive investment from our £10 million fund.” 2. Is there a true measure of entrepreneurship?

Ehsan Razavizadeh, Regional Director - MENA, Cass Business School

A 2009 report by the Global Education Initiative (GEI) of the World Economic Forum (WEF) stated: “Entrepreneurship education plays an essential role in shaping attitudes, skills and culture – from the primary level up. ...We believe entrepreneurial skills, attitudes and behaviours can be learned, and that exposure to entrepreneurship education throughout an individual’s lifelong learning path, starting from youth and continuing through adulthood into higher education – as well as reaching out to those economically or socially excluded–is imperative.” So – how can entrepreneurship education help leverage your career to the next level? We spoke to experts Ehsan Razavizadeh, Regional Director, MENA, and Professor of Entrepreneurship Nicos Nicolaou from the Cass Business School…(Cass Business School is a part of City University London and offers an Executive MBA programme in Dubai.) 1. How important is ‘entrepreneurship education’ before starting your own business?

“Entrepreneurship education provides significant benefits to students. It increases awareness of entrepreneurship, raises selfefficacy and heightens entrepreneurial intentions. It enables students to better evaluate the feasibility of a new business idea and provides them with the knowledge and resources that increase the likelihood of success. “It demystifies entrepreneurship and inspires students to take the leap. It also enhances opportunity identification and the ability to spot valuable opportunities in the market place. In Dubai our Executive MBA students can choose to take the entrepreneurship stream, which includes modules on New Venture Creation, Private Equity, and Innovation and Entrepreneurship.

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“Entrepreneurship entails recognising and exploiting entrepreneurial opportunities. There is no single empirical measure of entrepreneurship as there are different aspects of entrepreneurship. These range from starting new businesses to corporate entrepreneurial activities, which involve strategic renewal and external corporate venturing. There is also social

Mentorship – Joanna L. Krotz says in her blog for tech giant Microsoft, “Mentoring is defined by an agreement between a protégé and a business guru in your community or industry. Both sides understand that the purpose is to advance the protégé’s interests and goals. Mentoring isn’t a gripe session or a flurry of phone calls. It’s a formal process, with regular meetings and a system for reviewing progress and performance.” We might also add the following – Education – While inherent skills like optimism and leadership come naturally, skills that are more technical in nature such as management or accounting definitely need to be learnt. An MBA degree can add value to your career path and give you an edge over your peers. Capital – Most entrepreneurs struggle when it comes to acquiring finance for their business. Being part of a well-known college network can lead to new interactions where you can introduce your business and get honest feedback. Universities also very often tend to have alumni groups that support and encourage entrepreneurship financially. Leap to the next level…

Nicos Nicolaou, Professor of Entrepreneurship, Cass Business School

entrepreneurship, where the creation of social value is very important, as well as public sector entrepreneurship.” 3. What kind of metrics can be used to evaluate the effectiveness of an entrepreneurship course?

An effective entrepreneurship course should look to increase entrepreneurial: a) Awareness b) Attitude c) Intention Finally, the most important aspect of all, the course should have the capability to enhance future entrepreneurial activity. 4. What are three key things that could jumpstart an entrepreneur’s early career path?

The duo from Cass Business School give sound advice, “Access to mentors, education and adequate capital.” These are key aspects that essentially boost chances of growth during early stages of your career.

Finally, here is some food for thought – if we all become entrepreneurs, who would do the day-to-day actual work? An interesting anecdote on Henry Ford sets the scene: “The forceful executive, Henry Ford II, and the leader of the automobile workers union, Walter Reuther, both saw many examples of advanced machinery operating at the plant. The words they exchanged brilliantly encapsulated the paradox of automation: Henry Ford II: Walter, how are you going to get those robots to pay your union dues? Walter Reuther: Henry, how are you going to get them to buy your cars?” In other words, if you take out a complete level of ‘doers’, you also change the entire make-up of the economy. Conclusion: Nature vs. Nurture?

Whether or not you were born an entrepreneur – you may or may not find out if you are destined to be a startup guru or prefill two decades of employment and cosy employee bonuses. However, there is absolutely no doubt in the fact that effective entrepreneurial education can definitely take you one step closer to your entrepreneurial dream, or as we say, to the next level… For an online version, please visit:

www.smeadvisor.com/2013/07/nature-vsnurture/

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ADCB MEDICAL EQUIPMENT LOAN

At ADCB, we know that in today’s highly competitive scenario, every clinic, diagnostic centre and hospital needs state-of-the-art medical equipment to deliver on its promises of excellence in health care. Introducing the new ADCB Medical Equipment Loan that will help you make your medical equipment procurement quick, easy and efficient - just like the care and service you want to provide to your customers. Key features:

t )JHI MPBO BNPVOUT PG VQ UP PG UIF FRVJQNFOU DPTU t -PBO BNPVOU VQ UP "&% NJMMJPO t 'MFYJCMF MPBO UFOVSFT VQ UP ZFBST t .JOJNBM EPDVNFOUBUJPO BOE RVJDL BQQSPWBM UJNF t "UUSBDUJWF JOUFSFTU SBUFT t 4IBSJBI $PNQMJBOU QSPEVDUT BMTP BWBJMBCMF t A-PBOTIJFME BOE &RVJQNFOU *OTVSBODF BWBJMBCMF

For more information on "%$# .FEJDBM &RVJQNFOU -PBO please SMS .&- to or call 5FSNT BOE $POEJUJPOT BQQMZ $SFEJU BU TPMF EJTDSFUJPO PG UIF #BOL

BEST NEW SME PRODUCT EXPRESS BUSINESS FINANCE WINNER OF THE BANKER MIDDLE EAST PRODUCT AWARDS, 2013.

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