SME Advisor Middle East - Good advice for better business

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ISSUE 70 SEPTEMBER 2011 WWW.SMEADVISOR.COM

presents

HOW­TO

BE IRRESISTABLE TO BANKS PAGE 48

It’s a small world

The Arab Business Club brings together professionals and companies exploring opportunities with the Arab world.

Other stories: APPEALING TO EVE

STARS OF BUSINESS

AWARDS & SUMMIT 2011 Be part of the action!

Page 39 Hamdan Mohamed, Founder, President and Chairman of the Board of the Arab Business Club

CONFLICT RESOLUTION

MOBILE MARKETING STRATEGIES

Publisher Dominic De Sousa COO Nadeem Hood Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 Commercial Director Chris Stevenson chris@cpidubai.com +971 4 440 9138

EDITORIAL New horizons Last month, we left you with the promise of more to come.

So, drum roll please...

EDITORIAL Dave Reeder dave@cpidubai.com +971 4 440 9106 Group Editor, CPI Business Ketaki Banga ketaki@cpidubai.com +971 4 440 9115 Assistant Editor Mike Byrne mikeb@cpidubai.com +971 440 9105 Assistant Editor, CPI Business Aparna Shivpuri Arya aparna@cpidubai.com +971 440 9133 ADVERTISING Sales Director Raz Islam raz@cpidubai.com +971 4 440 9129

First up is the announcement that, very soon, SME Advisor is going Arabic with its Qatar edition titled Private Sector (www.privatesectorqatar.com).

This is a monthly magazine published by CPI and presented by Qatar Development Bank. It is aimed at business owners and senior executives in Qatar. Armed with practical advice, it highlights key issues for the business community. Just like with SME Advisor’s initiatives in the UAE, Private Sector helps maximise opportunities and growth in Qatar through our initiatives spanning magazine, events, Website and social media.

And that’s not all. We are also launching a trade and export magazine – imaginatively titled Trade and Export Middle East (www.tradeandexportme.com) – in association with Dubai Exports, an agency of the Department of Economic Development.

CIRCULATION Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Art Director Kamil Roxas kamil@cpidubai.com +971 4 440 9112 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 DIGITAL SERVICES www.smeadvisor.com Digital Services Manager Tristan Troy Maagma Web Developers Jerus King Bation Erik Briones Jefferson de Joya Louie Alma online@cpidubai.com +971 4 440 9100 Published by

1013 Centre Road, New Castle County, Wilmington, Delaware, USA

Branch Office PO Box 13700 Dubai, UAE Tel: +971 4 440 9100 Fax: +971 4 447 2409 Printed by Printwell Printing Press LLC © Copyright 2011 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.

This is a monthly magazine in English and is aimed at traders, exporters, re-exporters and producers in the region. As with all our titles, it will include a converged media platform.

Trade and Export Middle East will advise on all matters related to trade including updates, regulations, logistics, opportunities, legal, finance, marketing, management and much more.

The aim of the magazine is to increase the number of exporters, build international trade networks, improve the value of exports by enhancing business performance, present advice and opportunities for non-traditional exporters, provide the latest information on local and international trade fairs, as well as match buyers with exporters.

Sounds ambitious! It is. But it is also a labour of love – and lots of coffee – as is the new and improved look of SME Advisor. We incorporated a lot of your feedback and hope you like it.

We have added to our team these last few months and I’m happy to note that each and every one of them is as weird and wonderful as they come. They are driven, hard working, talented... but above all they are absolutely lovely people who work hard and laugh harder. You’ll see more of them in the coming months. Hopefully, you’ll support them as much as you have supported the SME Advisor team.

Did I ever tell you how just plain delighted we are every time we meet you, our readers, and hear your stories? We’ve learnt much from you, we’ve seen each other through some tough times, and we’ve grown older and wiser together. Thank you for that. Yes, the economic rollercoaster still threatens to derail the best-laid plans, but we’ve been through this very recently and, going forward, we can try to retain some of the tough but needed lessons from the first time around.

By the way, to all of you who keep addressing me as “Mr Ketaki” in your mails...I am a woman.

No, really! I am! That’s my photo up there. Just kidding because I got another one of those mails right now. Until next month...

Ketaki Banga, Group Editor, CPI Business Talk to us: E-mail: ketaki@cpidubai.com Twitter: @SMEadvisorME Facebook: www.facebook.com/SMEAdvisor LinkedIn group: SME Advisor

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CONTENTS Issue 70 September 2011

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Marketing 30 APPEALING TO EVE Following on from last month’s article, this month John Lincoln, Vice-President, Enterprise Marketing, du, explains strategies and tactics for attracting female customers.

34 MOBILE STRATEGIES Never have there been more opportunities to integrate mobile into the broader marketing mix and generate new business, says Abbas Alidina, Founder and Director, Logicks.com.

36 CUSTOMER COMMUNICATIONS The trick to satisfying customers is to add sustained personal communications, says Dan Smith, Head of Integrated Marketing for the Middle East and Africa region of Xerox’s Developing Markets Operations.

Breaking through barriers Arab Business Club’s Founder, President and Chairman of the Board, Hamdan Mohamed, talks to Mike Byrne about the driving force behind his vision to forge better business relationships.

38 BLOGGING Alan Devereux, Communications Officer for the British Business Group, Dubai and Northern Emirates, discusses why the power and influence of blogs should not be taken lightly.

Sales Shoptalk

Management

08 TRENDS AND UPDATES

20 CONFLICT RESOLUTION

A quick look at news and events that will impact SMEs in this region.

14 SHELF LIFE New toys for you and your business. Like you need an excuse!

Trade 16 EXPORT PREPARATION These simple steps will prepare you for global success, says Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department.

Sahar Haffaar Moussly, Executive Director, Trans Gulf Management Consultancy, discusses clashing office personalities, fine-tuning your communication skills and coping techniques for disruptive working environments.

24 EMBRACING CHANGE

At a time when a handful of accounts can mean the difference between make or break, many sales companies are pushing the boundaries to seal the deal, says Jennifer Baxavanis, Managing Partner, BAX Consulting.

Legal

Why do some businesses resist change so stubbornly and what more can you do to embrace, rather than resist, asks Debbie Nicol, Principal Consultant and Owner of business en motion.

44 COMMERCIALISING IDEAS

Human resources

Business growth

26 RECRUITING LEADERS

48 FINANCING

More than ever the recruitment process needs to protect the welfare of the company against the threat of inflated egos, individualism and dictatorial management style, explains Philip Lefebvre, Managing Partner, Whitewater Executive Search.

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40 PITCHING TO CLIENTS

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

In the first of a two-part article, Geethalashmi R., CEO and Managing Partner, Associated Business Attorneys, discusses how to evaluate an idea’s worth.

Banks do want to loan and they want to grow just like any other business. The bad news is there are some requirements you must fulfill before any financing is considered, says Vikram Venkataraman, Director, Salvus Strategic Advisors.

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Business guru 50 HAMDAN MOHAMED The Founder, President and Chairman of the Board of the Arab Business Club talks to Mike Byrne about the driving force behind his vision to forge better business relationships.

Business pin ups 54 XTR GLOBAL

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Dr. Reza Borhani, talks about the added benefits of non-invasive and nonconventional medical treatments and how XTR Global is providing the management expertise to help integrate it into mainstream medicine.

56 EDUCATION ZONE Suad Alhalwachi, CEO, Education Zone, gives us more insight into her business, that provides academic services to schools in the UAE.

Industry watch 58 REAL ESTATE MARKET According to a recent report, the real estate market continues to face a host of challenges amidst a weakened economic and investment environment.

60 EMPLOYMENT OPPORTUNITIES

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The latest research from Bayt.com and YouGovSiraj has revealed that over 50% of UAE employers are planning to hire in the next quarter.

SME about town 62 RAMADAN FOOD PRICES The UAE Ministry of Economy’s Consumer Protection Department conducted a field visit in August to the Union Co-operative in Al Barsha to verify the outlet’s compliance the prices and sales terms.

SME Speak Survey 64 INNOVATION SURVEY SME Advisor, with Tickbox Surveys Middle East, conducted a survey to understand how innovation impacts SMEs.

A day in the life…

66 CO-SIGN Adetokunboh Adeniyi, Vice President of Co-Sign, an independent record label and talent agency, takes us through a typical day in his life.

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SHOPTALK

TRENDS & UPDATES

Exports continue to foster growth in Dubai’s manufacturing Dubai Exports, an agency of the Department of Economic Development (DED), Government of Dubai, revealed that in 2010, the Emirate has been exporting diverse products, such as gold and precious metals, sugar, plastics, and food, in various target export markets particularly in South and West Asia.

The report showed that in 2010, exports sustained continuous growth trend, while imports to Dubai and Free Zone as well as re-exports have reversed the decline witnessed in 2009. Another important trend was the continuous growth of direct and Free Zone exports during the past years, followed by the positive growth trend of manufacturing GDP, indicating that exporting was a main factor in fostering manufacturing growth during the recession.

According to Dubai Export Monitor Performance Highlights, a yearly publication produced by Dubai Exports, the Emirate’s top ten products accounted for 77% of the total value of direct exports, an indication of a relative concentration of diverse product portfolio.

From the total direct exports

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of AED 68 billion, the top ten products were valued at AED 53 billion.

Gold, the top exported product by value, accounted for AED 38 billion or 56% of direct exports value. The other nine products, worth AED 14 billion in total, included waste and scrap of precious metals; sugar; sheets, film, foil and strip of plastics; petroleum oils; ferrous waste and scrap; polyacetals, other polyether and epoxide resins; articles of jewellery ,chocolate; and unwrought irons.

Export scenario Meanwhile, direct re-export pattern was significantly different as some products such as motor vehicles, spare parts and electrical apparatus were not in the direct exports list. Among the leading re-exported products were diamonds, worth AED 56 billion or 39% of the total re-exports value of AED 144 billion, followed by articles of jewellery; motor cars and other motor vehicles; parts of goods of other headings; electrical apparatus for line telephony or line telegraphy; gold; woven fabrics of synthetic filament yarn and motor vehicles for the transports of goods.

Trade pattern for Free

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Zone exports, valued at AED 143 billion, was also different from both direct export and re-export, being characterised by low product concentration.

“This edition of Dubai Export Monitor report has been compiled to serve as a ready reference to various stakeholders in the four main areas of interest – overall trade trend, regional trade, trade by product and trade by market,” said Engineer Saed Al Awadi, Chief Executive Officer, Dubai Exports “The report covers the latest trade statistics of last year, which was provided

by Dubai Customs. All the data included here depicted the performance of exports by target products and markets. The report also gave exporters and investors with an analytical evaluation of the trends and composition of exports from Dubai as well as an evaluation of potential opportunities,” Al Awadi added.

The top destinations of Dubai’s exports and reexports in 2010 were in South and West Asia at AED 157 billion; followed by ‘Other Arab Countries’ at AED 48.4 Billion; Arab Gulf Cooperation Council(AGCC) at AED 47.6 billion; and West

Europe at AED 37.5 billion.

Top Free Zone export destinations in 2010 were: South and West Asia (AED 40 billion), AGCC (AED 33 billion AED) and Other Arab Countries (AED 28 billion), while it is to be noted that about AED 0.8 billion worth of goods were supplied by Free Zone to Duty Free Shops in UAE Meanwhile, Dubai export markets by value were highly concentrated in India and Switzerland, comprising of 40% and 20% respectively, due to the export of gold to these countries, whereas other direct exports go mainly to GCC and the neighbouring countries in small shares. Furthermore, while India still took the biggest portion of 36% of direct re-exports, there was a clear pattern of re-exports relative focus in Iran and Iraq with 17% and 5% shares respectively, including a number of other markets in small shares.

Some new export markets emerged as potentially important for Dubai, including Brazil, South Africa, Kazakhstan and Australia.

Also, based on trade flows, the report highlighted some trade opportunities with Free Trade countries that can benefit from free duties.

SHOPTALK

TRENDS & UPDATES

du’s vocational training for Emirati students As part of its initiative to nurture and develop young UAE talent while promoting Emiratisation, du invited 20 Emirati students to participate in a summer training programme spanning July and August. In parallel, du has an ongoing work experience internship programme, through which 30 Emiratis have received vital vocational skills in 2011 alone.

The summer training programme is an ongoing du initiative that is now drawing closer to the end of the third year. For the first time, high school graduates were able to apply for a position in the 2011 programme alongside college graduates, with summer trainees initiated into the brand and communications, retail, marketing, human resources, finance and technology departments at du.

“We are very keen to encourage the abilities of young UAE nationals and have several initiatives in place in order to increase the employability of our country’s youth, in alignment with the UAE leadership’s vision and efforts towards Emiratisation,” commented Fahad Al Hassawi, Chief Human Resources and Shared Services Officer, du He added, “There is always a strong demand for positions

in our training programme.

With that in mind, this year we increased the number of intern spots in order to give even more students a solid foundation for a successful future.”

Nasser Khalifa Alfalasi took up a position as an intern over the summer, and was assigned to the events management section of the Communications Department, where he took over the task of handling one of du’s largest

Ramadan initiatives, the Mawaed Al Rahman (Iftar tents).

“I was given sole responsibility of this event, from recruiting volunteers to setting up the branding, meals and locations of the Iftar,” said Nasser. “du treated me like any other employee and gave me full responsibilities and tasks.

Most interns agree that they aren’t given the chance to be responsible and to be taken seriously in the work, but I can actually say that du has never made me feel unproductive, useless or irresponsible.” du begins sourcing potential trainees at the beginning of every year, by promoting the scheme at the various career fairs and academic organisations that the company is represented at. Emirati students are encouraged to submit an application, which is then processed by du.

Successful applicants are then invited to participate in an interview, from which students are selected to be admitted to the programme. They are then assigned to a department where their existing skills can be best put to use.

Dubai SME joins hands with Majid Al Futtaim Dubai SME, the agency of the Department of Economic Development (DED), Government of Dubai, has signed a partnership agreement with MAF ORIX Finance to offer benefits to the top 100 SMEs. His Excellency Abdul Baset, Chief Executive of Dubai SME, expressed his gratitude to MAF ORIX Finance for their

commitment and support of this critical initiative to champion the SME sector.

Benefits offered by MAF ORIX Finance include preferential interest rates, higher loan amounts and priority access to new financial products.

In line with the strategy to groom promising SMEs, the Dubai SME 100 ranking will act as a platform and catalyst

to identify promising SMEs, to groom them to become bigger, better and sustainable enterprises.

Unlike other rankings which are based mainly on financial indicators, the Dubai SME 100 ranking places a balanced emphasis on financial and nonfinancial dimensions of enterprise performance and development.

The basic criterion is that the applicant must be an SME

based on the official definition of Dubai’s SMEs, with up to 250 employees and a turnover of up to AED 250 million.

Over 830 eligible SMEs have been nominate d by banks, business councils and Free Zones to participate in the initiative, with more applications coming in. The first ever Dubai SME100 ranking list will be out in late October 2011.

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SHOPTALK

TRENDS & UPDATES

Dubai Culture hosts Forsaty Summer Training Programme Thirty-three students from universities and secondary schools in Dubai were selected to participate in the Summer Training Programme hosted across the various departments of the Dubai Culture and Arts Authority (Dubai Culture), the Emirate’s dedicated Authority for culture, arts, and heritage, under the Forsaty (My Chance) campaign, aimed at empowering students with career-planning opportunities.

18 university students and 15 secondary students were trained across all the departments in the Authority, from marketing, events, culture support, operations, human resources, and the Dubai Public Library, for four hours a day during Ramadan, until August 18th, 2011. With a workforce of approximately 150 employees in the Authority, the Training

and Performance Department under Dubai Culture provided the participants with insights into the operational ethos of the Authority.

Saeed Al Nabouda, Acting Director-General, Dubai Culture and Arts Authority, said: “The Dubai Culture and Arts Authority is committed

to creating a positive growth environment where every Emirati can achieve their full potential. The introduction of these training sessions gives our participants a chance to give back to the community that they have grown up in.”

The Summer Programme Training incorporated lectures

on various fields including self-building, leadership skills, community development, and team work. Students were awarded with certificates and gifts upon completion of the training sessions, while special prizes were distributed to students that complied with all the requirements.

Over 40% of MENA professionals would like to receive investment education The region’s majority save none of their income, with 51.3% believing they will only have the means to retire after the age of 60.

40.9% of Middle East professionals save nothing from their household income, with the biggest non-housing expenditure on food (40.8%), according to the latest online poll series conducted by job site Bayt.com.

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The results of the Bayt. com MENA Saving and Spending Trends poll showed that only 18.3% of Middle East professionals manage to save between 1-10% of their household income. This comes in line with the latest Bayt. com Consumer Confidence Index survey in which the overwhelming majority of Middle Eastern professionals claimed that their salary increase

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

was not keeping up with the cost of living.

Poll results also revealed that 32.3% of Middle East professionals spend 21- 40% of their income on rent or mortgage.

Outside of housing costs (which includes rent or mortgage and utilities), 40.8% of respondents’ claim that their biggest expenditure is on food, and 15.6% state it

is on school fees. Transport, travel and clothing rack up a collective 23.6% of costs, with only 1.5% of Middle East professionals spending most on children’s items.

More than half of Middle East professionals (51.3%) are expecting to retire after 60, with the primary source of postemployment financial support coming from career savings and investments.

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SHOPTALK

TRENDS & UPDATES

UAE Ministry of Economy builds strategic international ties

His Excellency Engineer Sultan bin Saeed Al Mansoori, UAE Minister of Economy

His Excellency Engineer Sultan bin Saeed Al Mansoori, UAE Minister of Economy, said that in the first half of 2011, the UAE promoted its policy of international co-operation and built strategic ties with a number of nations.

He said the Ministry was focused on promoting the framework for strengthening international relations, the exchange of experiences especially in promoting the growth of the small and medium enterprises sector, and boosting a culture of innovation and creativity. This was in line with the UAE Vision 2021 to further underline the UAE’s status as competitive

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knowledge-based economy.

The Ministry held five joint economic committee meetings during the first half of 2011 with Italy, Turkey, Azerbaijan, Algeria and Syria. The meetings focused on the development of SMEs and driving innovation through the signing of several cooperation agreements and exchange of experiences.

The Ministry also arranged an official visit to Australia to explore new opportunities between the two countries.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister and Ruler of Dubai personally witnessed the signing of a cooperation agreement between the UAE

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

and Italy in the field of small and medium enterprises.

Areas of cooperation A key area of cooperation with Italy is in alternative energy. The two sides agreed to strengthen cooperation frameworks and exchange of expertise in promoting sustainable development and also committed to protect intellectual property rights and strengthen the infrastructure to ensure this.

The Ministry of Economy has provided a proposal for a Memorandum of Understanding with its counterpart in Turkey for strengthening the role of SMEs. The UAE also plans

to send a delegation of entrepreneurs to Turkey to learn more about the country’s SME experience. The two sides also agreed to cooperate in the field of renewable energy and innovation.

The Ministry of Economy has launched several initiatives this year that will contribute to supporting the pillars of the knowledge economy.

Most notable among these is an initiative to build genuine partnerships between industrial incubators to encourage foreign direct investment and promote a culture of entrepreneurship.

Among other initiatives was its support to www. madeintheuae.com, a comprehensive Website that helps manufacturers to promote their factories, products, and services.

The Ministry also launched the Electronic System for Goods Monitoring which connects the Ports and Customs, the Ministry of Economy and centres of major retailers, enabling the Ministry to counter any attempts at potential monopoly practices by negotiating with suppliers or distribution outlets.

Another service was the issuance of Arabic Certificates of Origin online which offer flexible procedures for investors. The procedure is available in both English and Arabic languages.

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High-performance Back-UPS Pro units deliver cost-cutting, energy-efficient features.

Power-saving outlets automatically shut off power to unused devices when your computer and peripherals are turned off or on standby, eliminating costly electricity drains.

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Š2011 Schneider Electric. All Rights Reserved. Schneider Electric, APC, Back-UPS, and Legendary Reliability are trademarks owned by Schneider Electric Industries SAS or its affiliated companies. All other trademarks are SEPTEMBER 2011 SME ADVISOR MIDDLE EAST PROPERTY OF THEIR RESPECTIVE OWNERS s ?'" s !0# -IDDLE %AST n 0/ "OX n $UBAI n 5NITED !RAB %MIRATES *Conditions apply. Promotion giveaways are at the discretion of APC. Details and conditions for the lucky draw available at the APC by Schneider Electric booth.

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SHELF LIFE

Aspiring performance To meet the growing need for fast and reliable notebooks, Acer has developed the Aspire 5755 and 4755 . Using second generation Intel Core processor it is ideal for music, games, videos, photos and social networking.The laptops come in two format sizes- 35.5 cm (14”), 39.5 cm (15.6”) – both with high-definition CineCrystal LED backlit displays presenting striking 720p visuals in 16:9 aspect ratio.

In terms of memory it offers up to 8 GB of DDR3 memory. Hard disks with up to 1TB of capacity, 802.11b/g/n WiFi certified network connection, Acer SignalUp with Nplify are some of the other features.These laptops also come equipped with Acer’s media sharing system.

The laptops are equipped with Acer Crystal Eye high performance HD webcam and built-in microphone, enabling face-to-face communication with vivid images and clear sound. In addition, with the mic/earphone combo jack you can listen to music or watch a movie with the headset.

A viewfinder The new Fujifilm FinePix X100 featuring the “Hybrid Viewfinder” has made its UAE debut The camera has a 1,440,000 dot LCD panel image and can switch between optical and electronic viewfinder images with a simple touch. It also comes with reverse Galilean optical finder with a 0.5×

magnification,23mm (135 equivalent: 35mm) F2 lens, 8 elements in 6 groups, one spherical glass molded lens, 12.3 Megapixel APS-C CMOS sensor, and EXR processor.

The Fujifilm FinePix X100 is available across leading retail outlets

On the go The Packard Bell Go USB 3.0 version is here and it is 100% USB 2.0 compatible. It is upto ten times faster, has exclusive powersave technology and an automatic backup software suite.

External portable storage solutions are nowadays indispensable devices due to the growing amount and size

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SME ADVISOR MIDDLE EAST SEPTEMBER 2011

of digital contents you always need to have with you. USB 3.0 is bi-directional, using one direction for sending and the other for receiving data.

The new Packard Bell PB Go has been available in Middle-Eastern retail outlets since May 2011 in assorted capacities. Street price and availability vary according to country.

Phones just got smarter

Style meets power The Mercedes-Benz has upgraded its E 63 AMG to a 5.5 litre V8 biturbo engine.

Available in saloon and estate variants, the base level E 63 AMG produces 525 hp and 700Nm of torque. Combined with the optional AMG performance package, these figures increase to 557 hp and 800 Nm, through 2000 to 4500 rpm.

Both variants of the E 63 AMG achieve exceptional performance; acceleration from zero to 100 km/h takes 4.3 and 4.2 seconds respectively, and the top speed is 250 km/h (electronically limited).

The new engine, already familiar from

the recently launched CLS 63 AMG, delivers an output of 525 hp to 557 hp, together with an impressive reduction in fuel consumption; the E 63 AMG consumes 9.8 litres per 100 kilometres.

The new E63 AMG also features a host of additional new driver assistance systems such as new AMG ride control sports suspension, active blind spot assist and active lane keeping assist.The 2012 Mercedes-Benz E 63 AMG will be available in the Middle East as saloon and estate variants in Q4 with GCC pricing starting at USD 119,450 (AED 438,400).

Payments go mobile Samsung Electronics Co Ltd. announced a new payment method for its UAE customers for Samsung Apps through its mobile application store where customers can now download applications from Samsung

Apps and charge the payment to their credit card. The addition of this secure payment method provides customers convenience and flexibility while allowing them to optimise their Samsung Apps experience.

Research In Motion (RIM) have announced plans to launch five new BlackBerry SmartPhones based on the BlackBerry 7 Operating System (OS). RIM is rolling out two new BlackBerry Bold models and three new BlackBerry Torch models, all running the powerful new BlackBerry 7 OS. The new BlackBerry Bold 9900 and 9930 are RIM’s thinnest smartphones ever, each offering a large keyboard and touch display. The new BlackBerry Torch 9810 SmartPhone builds on the popularity of the BlackBerry Torch 9800 and combines a large touch display with a convenient slideout keyboard. The BlackBerry Torch 9850 and 9860 introduce an all-new, all-touch design featuring the largest display on a BlackBerry SmartPhone to date.

Combining the improved performance of the advanced WebKit browser engine together with the hardware enhancements found in the BlackBerry 7 based SmartPhones deliver browsing results that are up to 40% faster than BlackBerry 6 based SmartPhones and up to 100% faster than BlackBerry 5 based SmartPhones.

The updated Social Feeds (2.0) app has been extended to capture updates from media, podcasts, and favourites all in one consolidated view. The new Facebook for BlackBerry SmartPhones (2.0) app introduces features like Facebook chat and BBM integration that makes it easier for users to connect with their Facebook friends in real time.

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TRADE

PREPARING TO EXPORT

THE WORLD AT YOUR FEET There are unprecedented opportunities for businesses to export in a global marketplace. Dr. Ashraf Mahate, Head of Export Market Intelligence, Dubai Exports, and Vice Chair of the Economic Policy Committee, Dubai Economic Department, outlines the various stages of the process.

T

he massive restructuring of political boundaries, the opening of new consumer markets, historic trade agreements, abolition of quotas, and the World Trade Organisation (WTO) have created numerous benefits for SMEs willing to take the step forward into the foreign markets.

Here are some of the reasons why businesses may wish to export: t Increase in sales and profits: If a firm is performing well domestically, expansion into foreign markets is likely to improve its profits. t Gain global market share: By exporting, a firm will learn from its competitors; their strategies and what they have done to gain a share in foreign markets. t Reduce the level of dependence on existing domestic markets: By expanding into foreign markets, a firm will increase its marketing base, and reduce its dependence on local customers. t Offset market fluctuations: By tapping global markets, firms are no longer held captive by

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economic changes, varying consumer demand, and seasonal fluctuations within the domestic economy. t To make use of excess production capacity: Exporting can increase the utilisation of production capacity and length of production runs, thereby reducing average unit costs, and achieving economies of scale. t Enhance competitiveness: Exporting enhances a firm’s and a country’s competitive outlook.

While the firm will benefit from exposure to new technologies, methods and processes; the country will benefit from an improved balance of trade. t Find excellent no-cost or low-cost experts in export: For many firms, the decision not to export is based on the fear of the unknown.

The exporting process Exporters stand a much greater chance of success if, as a first, step they start thinking about their objectives in terms of t 8IBU QSPEVDUT UP FYQPSU

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

t 8IFSF UP FYQPSU t )PX UP FYQPSU Lack of a definite set of goals or objectives will lead to dissipation of efforts in wrong direction and a waste of resources. The objectives need to be realistic, should take into account the existing situation of the market, the exporter’s position in the market and competition. The objectives should neither be too ambitious nor too modest and should not be modified constantly if the same is not attained in the target period. But efforts should be intensified or resources should be redirected effectively to attain an objective in time.

Once the export goals and objectives have been formulated the exporter needs to understand the export process namely: the feasibility analysis; planning foreign market entry; and implementation. The stages are outlined below: Stage #1: Export feasibility study t "OBMZTF EPNFTUJD QFSGPSNBODF t "TTFTT UIF mSN T DBQBDJUJFT t $POTJEFS UIF EFNPHSBQIJD TPDJBM QPMJUJDBM and economic factors of target markets. t $POGFS XJUI JOUFSOBUJPOBM USBEF FYQFSUT GPS example. in the fields of marketing, finance, legal, and logistics) t 4FMFDU UBSHFU NBSLFUT Stage #2: Planning foreign market entry t $POEVDU BOE FWBMVBUF NBSLFU SFTFBSDI JO UIF industry sector t %FDJEF IPX UIF QSPEVDU XJMM CF NBSLFUFE t $PNQMZ XJUI UBSHFU DPVOUSZ MJDFOTJOH standards and certification requirements t "QQMZ GPS UIF OFDFTTBSZ QBUFOU USBEFNBSL and copyright protection t *EFOUJGZ UBYFT UBSJGGT EVUJFT RVPUBT PS PUIFS non-tariff trade barriers t &TUBCMJTI QSJDJOH TUSBUFHZ t 4FFL mOBODJOH Stage #3: Implementation t %FUFSNJOF NFUIPET PG EJTUSJCVUJPO t *NQMFNFOU NBSLFUJOH QMBO

TRADE

PREPARING TO EXPORT

translation of product materials, credit terms, payment schedules, payment currencies, insurance, commission rates, warehousing costs, after-sales servicing responsibilities, and costs of replacing damaged goods and so on.

Each of these costs should be taken into account in the financial projections and budget.

For further details in this area please refer to the EDC publication, “Pricing for Export”, which also includes a pricing matrix.

The objectives need to be realistic, should take into account the existing situation of the market, the exporter’s position and competition. The objectives should neither be too ambitious nor too modest and should not be modified constantly.

t $IPPTF TBMFT SFQSFTFOUBUJWFT PS TBMFT NFUIPET t /FHPUJBUF TBMFT DPOUSBDU t 1SPEVDF mOJTIFE QSPEVDU t 0CUBJO JOTVSBODF DPWFS t $PNQMFUF UIF SFRVJSFE QBQFSXPSL t 1BDLBHF BOE MBCFM UIF QSPEVDU t 4IJQ UIF QSPEVDU

Highlight the firm’s capabilities Price is not the only factor contributing to a buyer’s decision to purchase a product or service. Other important factors include management capability, production capacity, quality control system, technical cooperation with foreign firms, system for handling orders, export experience, financial standing, and links with banks. These points should also be included in the international business plan.

The export traps The following are some of the avoidable traps, that can become problematic for exporters when writing the international plan.

Seek no-cost or low-cost advice Firms that are new to exporting or are expanding into an unfamiliar foreign market often do not obtain qualified export counselling before developing their international business plan. Public and private sector professionals and organisations are available throughout the region to help firms clearly define their export goals and objectives.

Obtain management commitment Before researching and writing the plan, the person responsible for developing the foreign market strategy must make sure that top management is firmly committed to the project.

That person will then be better equipped to negotiate with foreign and financial partners to overcome the initial difficulties and financial requirements of exporting. All parts of the firm, from management to finance, marketing, production and training, must understand and appreciate the firm’s export expansion plans. Detailed CVs of all senior staff should be included in the international business plan.

Conduct market research Many international business plans are weak in terms of market research. Market research should confirm the exporter’s instinct that a product will be acceptable, and sell in a particular market. Confirmation is sought

Producing an export plan Developing an international business plan requires careful planning and a commitment of time. As with any new business operation, the decision to export must be envisioned with a long-term business investment attitude rather than a short-term profit objective.

Before making a commitment to enter into

Dr. Ashraf Mahate through research carried out on small focus by sending product samples, or by generally understanding the unique preferences of potential foreign customers.

Before researching and writing the plan, the person responsible for developing the foreign market strategy must make sure that top management is firmly committed to the project.

Determine the export price Pricing a product is the most important factor affecting financial projections in the international business plan. Many new, or infrequent exporters do not consider the various foreign costs that can contribute to the per unit price.

Among the special elements to consider when exporting are, the percentage mark-up, sales commissions, freight forwarder processing and documentation fees, financing costs, letter of credit processing fee, export packing charges, labelling and marking, inland freight charges, unloading at the terminal, insurance,

international business agreements, the development of an international business plan is an important and key step for determining a product’s readiness for export.

A well-prepared plan will assist the business in assessing the potential of a product in international markets; facilitate application for financing and how much it will cost to export a product. The core elements of a business plan include the following: Executive summary State what makes the company successful

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

17

TRADE

PREPARING TO EXPORT

and then list the competitive advantages over domestic and foreign competition.

Conduct an inquiry to determine the firm’s competitiveness within the industry. In analysing competition, it is helpful to know what market shares are and what the excepted industry or market trends are.

Present situation Identify the company’s products with export potential.

Objectives Define long-term goals and how exporting will help to attain those goals.

Management Conduct a company analysis in order to ensure that the decision to export is supported by all levels of management and to decide who will execute what functions.

Description Answer the question: Why is the product/ service unique in an international market?

Market analysis Determine what are the opportunities in this market.

Target customers Find out the demographic and socio economic profile of the target customer.

Existing competition Conduct an inquiry to determine the firm’s competitiveness within the industry. In analysing competition, it is helpful to know about the market shares and expected trends of the industry.

Focus group research Focus research on a small group of potential customers in order to gain feedback and constructive criticism.

Calculated risk Estimate the industry and the firm’s performance over a period of three to five years so that the firm may calculate risks accurately.

Marketing strategy Determine how customers will be attracted and their interests sustained.

Pricing/profitability Develop an international pricing strategy.

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Selling tactics Carry out direct mailing, cold calling, and advertising tactics.

Source/use of funds Decide from where the funds will be obtained to start or expand export operations.

Methods of distribution Determine where and how to deliver overseas

Use of proceeds Decide where profits and loans will be dedicated.

Advertising Consider foreign labelling and packaging requirements, literature translations, and customer relations.

Public relations Develop a regular and consistent product/ service programme, internal newsletter, press releases and so on.

Business relationship Articulate a plan for developing and determining the type of international business relationships, including culture training.

Manufacturing plan Indicate initial volume, expansion requirements, source materials and location of manufacture.

Financial history List out a five-year profit and loss statement.

Financial projections Remain realistic and conservative.

12-month budget Anticipate costs for financial year of exporting.

Cash-flow projection Calculate cash receipts vs. cash disbursements.

Balance sheet Illustrate liquidity and cash position.

Break-even analysis Calculate number of units to sell for break-even.

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Conclusions State exporting goals, total capital required profile, expected schedule and general comments.

These lists are not to be taken as the entire process but they provide some of the steps that will help companies to prepare for their journey to export.

About Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports (formerly known as the Dubai Export Development Corporation), which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. He has written a number of journal articles, chapters in books and edited books in the areas of economics, finance and banking.

He has also presented papers at major international conferences. Dr. Mahate has provided extensive consultancy services to various organisations in the areas of banking, economics and finance. He has been a director of a number of companies including a venture capital company and a private equity fund.

Dr. Mahate received his doctorate from Cass City University Business School in London (UK) which was ranked by the Financial Times newspaper as the 12th best university in the world for finance.

He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified Anti-Money Laundering Specialists (ACAMS).

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SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MANAGEMENT

CONFLICT RESOLUTION

RISING ABOVE IT ALL Sahar Haffaar Moussly, Executive Director, Trans Gulf Management Consultancy, discusses clashing offices personalities, fine-tuning your communication skills and coping techniques for disruptive work environments.

makes a person difficult. They are people who: Make us lose our cool Force us to do things we don’t want to do Prevent us from doing what we want or need to do Often use coercion, manipulation or other underhanded methods to get their way Make us feel guilty if we don’t go along with their wishes Make us anxious, upset, frustrated, angry, depressed, jealous, inferior, defeated or any other negative feeling Make us do their share of the work !

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hen you are required to interact on a regular basis with fellow co-workers, the chances are that at some point you will cross paths with someone who, in your mind, is just plain and simply difficult. The best solution when faced with such behaviour from others is to learn to control our own mood, by not allowing others to fill us with negative feelings.

It would be great if we were all able to learn how to control our anger and stress levels by improving our people skills, thereby obtaining a psychological edge. In other words, maybe we should pay more attention to our communication skills with ourselves and with others, as the quality of our communication defines the quality of our life.

So let’s explore this further; how can we adjust our own behaviour to become resilient around difficult people. But before we go on, let us first define what we believe

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SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Often when we encounter a difficult person, many of us react in ways that make the problem worse, for example by making a sharp retort, by becoming defensive rather than attempting to deal with the real issue and by taking the person’s anger personally.

These natural but counterproductive responses, reduce our chances of transforming a negative encounter into a constructive one.

Becoming aware of and familiarising ourselves with those techniques that help us deal with difficult people and situations can, on the flip side, boost our confidence, improve our competency at work, reduce stress and anxiety, and increase our enthusiasm for our job.

My life changed when I realised that I could choose how to react when confronted with difficult situations. I discovered that I could either endorse the negative feelings projected upon me, or choose not to. This simple but very effective technique has helped me to determine the mood of my day. We should never forget that life has

MANAGEMENT

COMMUNICATION SKILLS

In general, many conflicts and resentments arise because people feel either that they have to defend themselves against an aggressor, or that they have inadvertently taken advantage of an overtly passive person. The ability to behave assertively rather than aggressively or passively can significantly reduce the level of conflict and stress in your life.

in trying; they won’t get what they want anyway.

Unable to acknowledge feelings: They hide feelings of fear and inadequacy by pretending everything is all right.

Liable to put themselves down: They have difficulty accepting even the simplest compliment and tend to underestimate the value of what they do.

Lacking in energy: Their zest for living is missing. They are usually doing things that others want them to do, rather than what they themselves want.

infinite possibilities and we always have a choice and we should not give anyone the chance to push us into being defensive or negative.

In order to learn the techniques necessary to deal with such individuals, we first need to detach ourselves from the situation and understand why they behave the way they do, so that we can deal with them. I tend to divide people into three categories in this context: aggressive, passive and assertive.

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Aggressive

These people tend to feel the following: Powerful: In the beginning these individuals enjoy having people rush around to cater to their every whim.

Guilty: Eventually they do feel remorse as a result of the knowledge that they are taking advantage of others.

Threatened: They constantly brag about their qualities from strength, intelligence and so on. They do this because others may learn they are not really as talented as they make out to be. They attempt to make themselves feel important by putting others down.

Right: They are convinced that their ideas are the only ideas worth listening to Critical: They blame others when things go wrong.

Lonely: Their aggression isolates them from everyone around them.

Excessively energetic: They expend energy in the wrong direction, doing destructive rather than constructive things.

Sahar Haffaar Moussly

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Angry: They know others take advantage of them.

Frustrated: They seldom get their way Withdrawn: They believe nobody listens to them.

Insecure and inferior: They lack self-esteem !"

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Assertive

People who are assertive are likely to feel: Positive: They approach every new task or idea with a positive rather than a negative attitude.

Calm: They are at peace with themselves and others.

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Your communication skills will help you to control your moods and stay level headed in tough situations. Instead of becoming defensive when dealing with irate, rude, impatient, emotional, upset, persistent and aggressive people, you will concentrate on solving the problem.

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Passive Passive people generally feel the following:

and self confidence, are unaware of their abilities, and are reluctant to try new things for fear of failing.

Anxious: They feel they have little control over their lives.

Defeated: They believe there is no use !

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Enthusiastic: They complete tasks with zest and feel that they will succeed at them.

Proud: They accomplish what they do without stealing ideas from others or climbing over others. They can take full credit for what they achieve.

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SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MANAGEMENT

COMMUNICATION SKILLS

One of the best investments you might possibly be able to make in your future is to perfect the art of being assertive, build your confidence levels and master the communication skills necessary to improve your relationships with staff, superiors, co-workers and clients.

explain to others how unpleasant behaviour affects them.

Respect for others: They recognise that others have needs and rights just as they do Energetic: Their energy is directed towards achieving their goals. !""

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Honest: When they give their word that they will do something they do it, so others believe in them.

Direct: They are upfront in situations, and usually succeed at what they attempt.

Confident: They take risks, but know their limitations. They know that it’s okay to be wrong sometimes and are ready to learn from their mistakes.

Satisfied: They know where they are going, and how they are going to get there, so they usually attain their goals.

In control: They seldom have mood swings that adversely affect their communication with, and behaviour towards, others.

Able to acknowledge feelings: They can

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In general, many conflicts and resentments arise because people feel either that they have to defend themselves against an aggressor, or that they have inadvertently taken advantage of an overtly passive person. The ability to behave assertively rather than aggressively or passively can significantly reduce the level of conflict and stress in your life.

However, conflicts cannot be avoided entirely. When they do arise, the principles of assertive behaviour, which are so effective for preventing conflicts, are also helpful for resolving them.

On a gender note I might indicate here that many women still follow the behaviour of their mothers and grandmothers. They believe that passive behaviour is appropriate for women and that women who compete, or become powerful, are unfeminine.

Successful women have had to discard this traditional behaviour and become more assertive. However, in some cases their attempts to change have gone to the other extreme and have become aggressive.

Men, on the other hand, have a tendency to retain the traditional belief that their role in life is to be strong, competitive and aggressive. To adapt to new thinking and circumstances in business, men have had to change. They’re acting less aggressively

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

and are becoming more in tune with their feelings and the feelings of others.

One of the best investments you might possibly make in your future is to perfect the art of being assertive, build your confidence levels and master the communication skills necessary to improve your relationships with staff, superiors, co-workers and clients.

Your communication skills will help you to control your moods and stay level headed in tough situations. Instead of becoming defensive when dealing with irate, rude, impatient, emotional, upset, persistent and aggressive people, you will concentrate on solving the problem.

By developing this kind of self-control, your confidence will grow and you will become more enthusiastic. Learn to utilise these skills and no longer will you allow others to decide the kind of day you will have.

About Sahar Haffar Moussly is a Dubai based, UKcertified Life Coach and NLP (Neuro-linguistic programming) practitioner. Today she runs two businesses. Alongside her life coaching practice, Life in Harmony, Sahar is also Executive Director of Trans Gulf Management Consultancy (TGMC), a firm specialising in conference interpretation and translations service, which was established in 1997.

TGMC was listed as a finalist in the SME Advisor Stars of Business Awards, 2010, in the category of Professional Services.

With over 25 years experience in the corporate world, Sahar holds a BA in English Language and Translation gained from Damascus University, and an MA in International Diplomacy gained at the University of Washington. She went on to become a qualified interpreter and translator, gaining a diploma in simultaneous translation and interpretation from the UK and became a member of the Chartered Institute of Linguists.

In 2010 Sahar published a research and guidebook in Arabic entitled Welcome to Tomorrow which introduce the topic of life coaching and self development to Arab audiences. The book was launched in Damascus in January 2010.

For more information about Life in Harmony visit www.lifeinharmony.me

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MANAGEMENT

BUSINESS CHANGE

DON’T RESIST CHANGE – EMBRACE IT! Business can present us with various opportunities, many of which we feel we want or need. Yet sometimes the change it requires just never happens. Why does such hesitancy exist and what can you do to change this, asks Debbie Nicol, Principal Consultant and Owner of business en motion.

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ou see more aligned and greater efficiencies with an alternative supplier, yet it’s easier to simply stay with the original one! You wish to change banks due to the frustrations you experience, yet it all seems too hard to do so. You recognise the need to evolve your corporate culture to the next level yet the size and intangibility of this task seems daunting.

Change is one of those things; you love it or you hate it! For those who hate it, a legitimate reason can always be found as to why a change just doesn’t happen.

For those who love it, there may be a reactionary impulse that causes change to yield unintentional results. So, how can one strike a balance, one which will provide a structured and aligned process to yield desired results in a changing business environment?

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What can drive us to resist the change in business?

The People (for example with suppliers) When dealing with people change, the emotional factor can block us from moving with the change. There may be a concern of letting a supplier down, given the relationship and bond that has formed over the years. This then is translated into an absolute in our minds that this will have a knock-on effect on credibility if other suppliers hear of this, and the freeze effect occurs.

The system (for example the bank) Facing a system, and the system requirements, can simply become too hard at times, too tough or too detailed. Systems make demands on us, possibly rendering us as incapable without it. The evidence and documents that are required, the time frame that we are commanded to work within, the

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Debbie Nicol positions that we must deal with, the rules that we cannot overcome or bend in any way all can render us as feeling incapable without our crutch, the system.

The unknown (for example corporate culture) Facing the unknown can become allconsuming. When it’s unknown, the world seems to be full of what if’s and what could be’s. We lose sight of any possibility of positives altogether. This change searches for absolutes in answers, the one right way to do it, and eradicates any semblance of a positive contribution if it simply is not deemed as the right way.

MANAGEMENT

BUSINESS CHANGE

boot. How will you bottle that great feeling your actions have produced? How will you be calling upon that reserve when next you face change? How will your celebration inspire others to take that first step? Did I change to learn, or learn to change?

Nothing in business can work in isolation, and change is no exception! What resources are out there that will feed into my change needs? How can I surround myself with like-minded people, or those experienced with that which I currently face?

Behind all the examples exists a fear! To get through fear can involve confrontation, and the very sound of the word conjures up negativity. Let’s redefine confrontation as meeting the situation. Will we need to confront the supplier, or meet with them to share thoughts, thanks for the past, needs for the future and possibilities?

Will we need to confront the system with arguments, or, simply meet the system’s requirements as a bump to get over before we move to the new bank.

Will we need to know the right way to change our corporate culture or find new clients, or is it possible that we will design the best way for our own business as we move and find that which serves us best?

Change tips t Meet the need When an answer to change is not evident, what could stopping, looking, listening and feeling do for you? When allowed and encouraged reflection can provide such insight. Is it possible that you already have some form of insight into the answer, but simply are too busy worrying about the change that the indicators are not heard, recognised or appreciated?

Are you allowing yourself to forsake the real business reasons for the change of supplier for the sake of emotional trash? Do you consider the other side of the equation, feeling what the consequences will be if you don’t change?

Are you trusting your own intuition when you just know that a system is limiting your effectiveness, or, your current way of doing things is no longer serving? Is there a need for this change that should not be ignored?

t Decision time to become the change If you are now aware that the need for and benefits of the change outweigh the consequences of not changing, how will you prepare yourself to meet its requirements?

What state of mind shall you need to be in when dealing with the representative of the system and how will you get to that state? How can you break the change down in to manageable pieces or stages?

What will you need to be clear about, and possibly have prepared, for when you communicate with the supplier of your decision that you will be immune to his emotional strings and persuasions? What can you do to ensure that when barriers towards the corporate culture change emerge, that you’re ready and willing to do whatever it takes to work through those? t Use your inclusion mindset Nothing in business can work in isolation, and change is no exception! What resources are out there that will feed into my change needs? How can I surround myself with likeminded people, or those experienced with that which I currently face?

What is the alignment of others’ suggestions and how could they be integrated into my change? How can I apply some or all of the ideas to my situational action plan? How can the change impact positively on others too, to facilitate the change even on a wider level? The role of networking in this phase should not be underestimated. t Celebrate and reinforce The new bank feels great! The evolving corporate culture is reaping rewards. The new supplier is so much easier, and cheaper to

How would it feel to declare?

I can describe the change required I have a clear understanding of the change’s impact I am working through blocks I am happily engaging with the change I know how to change and if not am freely collaborating, finding alternatives to trial I am making this change happen I believe in supporting this change in the future Case in point – corporate change on a personal level The successful CEO had redesigned his future moving to a new industry, a new company, a new structure and a new role.

His hopes were high for the next phase of his evolving career.

Month after month, examples of misalignment became evident.

Month after month, debates became increasingly heated. Month after month, the family felt a change in his wellbeing, debates became increasingly heated and the emotional bank account plunging deeper into red.

Excerpt from ‘Corporate Embers’ Is a corporate change or move on your list? Do you see yourself in a situation or position that no longer serves? Apply the above steps and touch points to work through this change.

About Debbie Nicol, aka “the enablist”, principal consultant and owner of business en motion assists organisations and leaders to move ahead through change. She works with organisational development, change management, corporate cultures and learning strategies. For more information visit www.businessenmotion.com

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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HR

DILIGENT RECRUITMENT

YOU GOT THE RIGHT STUFF! When analysing corporate failures the question around smart recruiting is now centre stage. More than ever the recruitment process needs to protect the welfare of the company against the threat of inflated egos, individualism, and dictatorial management style, explains Philip Lefebvre, Managing Partner, Whitewater Executive Search.

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rganisations must embrace a more thorough recruitment process and show more diligence when hiring senior executives. It is no longer enough to rely on an individual’s reputation when making a decision.

Humans and their decision-making processes, are much more complex than what can be assessed during an interview.

Companies must be able to measure the individual’s ability to seamlessly integrate into the organisation, and to successfully deliver against the organisation’s objectives.

A diligent recruitment process can only benefit and protect an organisation from future negative events. The required diligence is in essence a formal agreement on what are the ideal competencies of the individual who will be successful in the role, and how can we be certain that the person we hire will, in fact, be who we want them to be. This decision becomes the framework for the recruitment project and, ultimately, the recipe for a successful hire.

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Gaps in the process?

Methods of measuring an individual’s competencies have been around for many years. In the past, some companies relied on a combination of psychometric testing and industrial psychologist reports to support

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

the hiring decision of an executive. These tests comprised of several hundred multiple choice questions that extracted a broad understanding of an individual’s personality and what their potential strengths and weaknesses were. They were then supported

HR

DILIGENT RECRUITMENT

by an industrial psychologist’s report derived from a one-on-one interview with the potential candidate.

As these methods evolved, organisations began to see the potential flaws in such processes. The obvious was that candidates were becoming experts at structuring their responses in line with what the role was requiring and, thus, companies were not getting the “true” picture of who they were hiring.

Beyond this, these exams and interviews only supported a “snap shot” or static analysis of a potential candidate’s personality. They were not able to capture the individual’s active behaviour in a broad range of situations such as their ability to integrate into a team, how they would react in times of stress, or how they process a situation and act upon it.

In addition to the validity of the information gathered during a psychometric testing session, companies did not have a methodology to ensure that potential candidate skills were aligned to the overall corporate objectives.

A Vice President responsible for sales can demonstrate that they are great sales drivers, but if the company views customer satisfaction rather than revenue generation as a key corporate objective, they could end up making a costly error in hiring the wrong person.

Competency modelling Today, these tools have evolved tremendously and they are more frequently used in the recruitment process, particularly when hiring an executive. The practice is now more commonly known as competency modelling; a powerful tool to ensure a targeted recruitment approach and subsequent proper “fit” between the new hire and the organisation.

The objective of developing a competency model is to ensure that the

The process of developing a position’s competency model can be extremely insightful for a senior executive team.

The exercise demands a complete alignment between each executive’s views on what the corporate objectives are – both short and long term. Based on these objectives, the team will then align the necessary competencies required for an individual to be successful in the role.

right people are currently in the right roles. Furthermore, these competencies are aligned perfectly with the organisation’s objectives or mission statement, which further supports its future success and strengthens the point of having the right person, in the right place, at the right time.

The process of developing a position’s

Competency modelling is also used in the analysis of a candidates overall fit with the other members of a team.

The benefit is to ensure that the new hire’s personality or behavioural traits will not clash with the current team.

It also increases the probability of the successful hire to remain engaged and committed to the company for a longer period of time.

Furthermore, as corporate objectives changed over time, there was no mechanism in place to know whether the current CEO was capable of leading the company towards these new goals.

Philip Lefebvre

competency model can be extremely insightful for a senior executive team. The exercise demands a complete alignment between each executive’s views on what the corporate objectives are – both short

and long term. Based on these objectives, the team will then align the necessary competencies required for an individual to be successful in the role.

A typical executive position requires 8 - 12 key competencies and these make up the competency model for that role.

This model is then used by the recruiter in order to target the exact profile required by the company in order for the candidate to successfully attain the objectives set out by the executive team.

Armed with the organisation’s Competency Model for a specific role, it is now the recruiter’s responsibility to use this as a blue print for the identification of potential candidates. These competencies are rarely identified through an interview so the recruiter will typically use tools to measure an individual’s ranking against the specific competency model. It now becomes important to link an individual’s behavioural traits to these competencies.

This is typically measured through a case study or questionnaire, which maps out the individual’s automatic behaviours, given

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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HR

DILIGENT RECRUITMENT

certain circumstances. These behaviours are then measured against the pre-established behaviours required for a competency to manifest itself. So, in essence, once a candidate completes the case study, a recruiter is able to discern whether or not a candidate will demonstrate the required competency for the role.

This process is not as cut and dried as it seems. In some cases, candidates demonstrate a core competency but at a lesser degree than desired. In these instances, organisations can use this as a foundation for formal training and development in order to promote certain behaviours and subsequently align a candidate closer to the required competency level. Some tools can actually suggest specific types of formal developmental programmes and self-help techniques that can be followed by the candidate.

In addition to drastically increasing the probability of a successful hire, competency modelling is also used in the analysis of a candidate’s overall fit with the other members of a team. The benefit is to ensure that the new hire’s personality or behavioural traits will not clash with the current team. It also increases the probability of the successful hire to remain engaged and committed to the company for a longer period of time.

Many businesses today have successfully implemented competency models through their executive ranks. There are fewer that have done so across all functions and levels and, unfortunately, very few actively use it to recruit new executives. Nonetheless, the benefits of having the basis of a formal competency model are evident. A fully integrated corporate competency model offers the organisation the backbone for human capital management.

Once implemented, it assists in the recruitment process and aligns the new hire to the existing team dynamics. It’s used as the foundation for performance reviews and, finally, it acts as the outline for employee training programmes.

Furthermore, it can be used as a powerful

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A company’s road to growth is highly reliant on its human capital and it only takes one poor judgement call to impact its course. The future health of an organisation is determined by the people who are making today’s business decisions. Therefore, recruiting key decision makers is not an exercise in cutting corners or to be outsourced to the cheapest firm.

retention strategy as it gives the employee a comprehensive understanding of their strengths and opportunities for development.

A new application for competency modelling has recently emerged as companies are faced with cost cutting initiatives and hiring freezes. Although they are not in the position to hire top talent today, they seek to stay top-of-mind with the candidate market. A “talent mapping” service can assist companies in identifying executives for future hire.

This process uses the competency model of a given organisation and applies it to the candidate pool in a given function, region and compensation bracket. Short-list candidates are then regularly updated and once the company is prepared to hire the recruitment timelines are drastically diminished.

Although competency modelling can be perceived as a complication to an otherwise straightforward recruitment process, it definitely provides a much more tangible measure to the importance of “smart hiring”. The cost of a bad hire can be astronomical and in some circumstances, as we’ve seen recently, can actually destroy a company. The only way for an organisation to safeguard against such catastrophes is to embrace a strict and diligent recruitment process, and to use the tools that are currently at their disposal.

A company’s road to growth is highly reliant on its human capital and it takes only one poor judgement call to impact

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

its course. The future health of an organisation is determined by the people who are making today’s business decisions.

Therefore, recruiting key decision makers is not an exercise in cutting corners or to be outsourced to the cheapest firm, but rather a process that should be done with the utmost attention to detail.

About Philip Lefebvre combines more than 15 years of executive search experience between Korn/ Ferry International, and Heidrick & Struggles. He subsequently moved to Dubai in 2008 to participate in the growth of a regionally-based executive search firm.

Philip began his career in Montreal, Canada, assisting companies across the telecommunications and natural resources sectors. He then moved to Toronto, where he broadened his experience and worked closely with clients in the pharmaceutical, FMCG and financial services sectors. Prior to moving to the UAE, Philip was the Canadian Practice Head for the life sciences industry sector for Korn/Ferry International. Since his arrival to the region, Philip has had the opportunity to work with a wide variety of clients. He has successfully closed searches in sectors such as industrial, oil & gas, real estate, hospitality and pharmaceuticals. He has also worked across several key geographies including UAE, Saudi Arabia, Qatar, Egypt, Iraq, Morocco, Algeria and Tunisia.

Philip is Canadian but spent the first eight years of his life in Saudi Arabia. He holds a Bachelor of Finance degree from Concordia University in Montreal, Canada, and is fluently bilingual in English and French.

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SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. © 2011 SAS Institute Inc. All rights reserved. S65512US.0411

MARKETING

WOMEN: PART II

MARKETING TO EVE In the second part of the series, John Lincoln, Vice-President, Enterprise Marketing, du, advises on the strategies and tactics businesses should use to attract the spending power of the fairer sex.

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arketing in general requires a marketer to truly understand that a proposition means the end-to-end experience at all touch points across the lifecycle of the customers.

Marketing to women requires the marketer to not only understand what designing a proposition means, but also requires the marketer to understand the difference, subtle or not, between men and women.

Before I dwell into the marketing implications arising from the differences between men and women, it is important to note a few differentiating factors and marketing engagement rules that will accentuate your marketing efforts to women.

Here are a few basic rules of marketing engagement that any small business owner or SME marketer should keep in mind before targeting to women: A proposition to commemorate an eventful day Launch a proposition targeted at women to be introduced on a commemorative day, like Mother’s Day, Valentine’s Day, International Women’s Day, or even, Father’s Day.

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help ensure that your marketing gets the momentum it needs.

At times, women, more than men, can connect emotionally to the relevance of a day and will generally appreciate marketing activities targeted to special days more than their male counterparts.

(Please read my previous article, The experience is the proposition (www. smeadvisor.com/2011/01/the-experience-isthe-proposition/), which articulates on what a proposition truly means.

Design should be easy to use, functional and importantly stylish Although this would apply to any customer, it is really important to ensure that your product features are easy to use and are able to do what they are intended to do. Adding a dash of relevant style will help to differentiate it as a proposition targeted to women.

Build brand credentials and target women as its primary customer base If you are an SME, you probably are not established in the minds of your potential women customers. Aligning your proposition through a product bundling or channel alliance, with established brands that have women as their primary targets, will

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Include women in your marketing and sales team Ensure that you have women in your marketing and sales team. No matter what men claim, they can never understand women as well as women do. This will not only ensure that your proposition design, function and style are commensurate to the needs of women, but also will ensure that your communications efforts are not “off message” and irrelevant.

Ensure channel suitability Ensure that your go-to-market models reflect the needs, aspirations and expectations of your women target market.

Cleanliness, safety, design and style are basic considerations. Also, insist your sales team are friendly, honest, empathetic and caring.

Communicate relevantly and differently If you’re in the business of targeting women as your primary customers, then you will have to ensure that your communications messages are not only relevant and functional, but are also able to evoke the emotional stimuli that matters to women.

MARKETING

WOMEN: PART II

The devil is in the details Women are very detailed oriented. Do not attempt to hoodwink them with headline pricings that are misleading. Ensure that your offer, its terms and conditions and other relevant information, is fully communicated up front. Although this is practiced by most businesses, they do it primarily as legal caveats.

For women, it normally conveys discipline, reliability and honesty.

Women are more loyal customers than men Women are loyal. Once you have interested them as a customer, they will more than likely give you a second chance, if you miss a score.

Design retention propositions and ensure that the loyalty reward value is communicated clearly and directly to your female customers. They will certainly ensure that you get the full benefits of the “network effect” by recommending your brand and propositions to their network of family, friends and co-workers. Imagine the compounded multiplier effect of this on your business growth and your marketing activities.

Facebook, Twitter and micro sites. If the offer makes sense, profits will follow, as women will promote, recommend and refer your brand to their network.

If your proposition experience does not live up to its intended or stated claims, then your business will be equally damaged, as the social networks can also openly criticise.

Friend-get-friend offers and discounts As women are better networkers, offers of friend get friend discounts and promotions will succeed better.

Social networking tools Actively promote your proposition through widely available social networking tools like

Sense of hearing and listening Small business owners and SME marketers will need to ensure that your sales personnel are trained to speak clearly, concisely and honestly.

The music or the jingle for your brand or retail

Actively promote your proposition through widely available social networking tools like Facebook, Twitter and micro sites.

If the offer makes sense, profits will follow, as women will promote, recommend and refer your brand to their network.

premises should also not be too loud. Keep in mind that sound which is considered normal by men, is at times perceived as too loud by women.

Women also have a keener sense of picking up social cues, nuances, intonation, meaning and, intensity of conversations. This implies that all your communications across all touch points including “above the line” communications, collaterals and Websites, are designed to reflect this keener sense of nuances and listening.

A small business owner or SME marketer should ensure that all front customer facing employees are trained to be friendly, honest, sincere and non-condescending.

Understanding the differences between men and women It is important that we know and understand some of the key, and not so obvious, differences between men and women. A keen observation and understanding of these differences are critical before you attempt to craft a proposition targeted primarily at women.

You can also refer to my previous article, Who really rules the roost? (www.smeadvisor.com/2011/04/ entrepreneurship-who-really-rules-the-roost/), where I have written extensively about the relevant differences between men and women.

Interpersonal and social networking skills Women, generally, tend to connect and form longer lasting relationships with their peers, friends and work mates, and as such, are seen as more equipped to maintain these relationships.

Any small business owner or SME investor targeting propositions to women will have to leverage this aspect through:

Implications for women’s keener senses Colour vis-a-vis the sense of sight Marketers need to be especially aware of what this means in terms of colour for their packaging, presentations and premises. The colour cannot be too loud, but instead should have a soothing and softening effect.

John Lincoln

Special offers targeted to a circle or network of women An offer targeted at a group of women, like professionals or entrepreneurs, or, through your local chamber of commerce, is effective. Women are very effective networkers and an offer approved by one member has a high propensity for adoption by the rest of the circle.

Women are nurturing and caring Women are by their very nature, nurturing, caring and giving and marketers have a tremendous opportunity to craft and leverage this unique aspect of a women’s trait.

Marketers should be extremely cautious to ensure that their offer designs are not superfluous or falsely claimed. As caring and giving that women are, they will not hesitate to severely reject any business that attempts to promote propositions that do not deliver the desired experience intended for their loved ones.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MARKETING

WOMEN: PART II

Deciphering detail from a wider range of information Women think locally and so rely on details and nuances that really matter – their attention to detail is something that should be considered before designing any offer.

Small business owners and SME marketers have to pay very special attention to the details of the product design, function and style. They also have to ensure that no hidden costs are camouflaged within the headline price.The detail oriented nature of women means that they will shop around and seek the best value.

immediate attention are some of the key attributes that a female customer will appreciate more than men.

Marketing communications Marketing communications is often focused on a core message. The intensity of focus depends on the type of media. If it is a billboard, then it is more intense versus a print advertisement. The visual abilities of women will require you to design and create a message that communicates the big picture of what you are trying to sell.

Small business owners and SME marketers have to pay very special attention to the details of the product design, function and style. They also have to ensure that no hidden costs are camouflaged within the headline price.The detail oriented nature of women means that they will shop around and seek the best value.

where customers can call in, as well micro sites specifically created and targeted for the launch of a single proposition.

Marketing communications using “real world” testimonials would certainly be effective when targeting women. This has the compounded effect of creating and communicating a personalised message for your potential female customers.

A final note I am sure that most readers would agree that the advice given here could be relevant and applicable to any marketing target. The point of this article is to highlight the differences between men and women that really matter.

As the famous American author, Camille Paglia, said “Women are in league with each other, a secret conspiracy of hearts and pheromones”.

Woe betide any marketer who truly cannot fathom what this means.

About Sharper vision Men have a need to track, trace and navigate the path to their goal. In other words men see in a narrow field – mild tunnel vision – with greater concentration on depth. Women, however, take in the bigger picture – literally speaking.

Not only do women have a wider peripheral vision, but they can also store, for short periods at least, more relevant and random information than men. This wider peripheral vision combined with the acute sensory awareness and overall intuitiveness makes women an interesting market to target, attract, communicate to and sell.

Retail channel location and store The peripheral vision scope of women will dictate that any small business owner or marketer will have to pay special attention to the entire external and internal surroundings of their retail store, office or location.

What this means is that safety, cleanliness, convenience, play area for their toddlers and

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Women seek out comments, opinions and suggestions of others Keep note that while men are generally more independent in their thoughts and actions, women generally seek out and are open to suggestions, comments and opinions from others.

SME marketers should design their propositions in a way as to enable your customers to give feedback. You should have a medium to share your customers’ opinions and feedback through online, print, or other media.

You are in a better position to generate real buzz and excitement around your proposition if more positive opinions and feedback are communicated back to your target market.

Therefore, your proposition design should ensure that you are able to capture this feedback and communicate it back to your wider target.

The tools used in this are not just the obvious social media tools like Twitter or Facebook, but also could include 800 numbers,

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

John Lincoln has over 20 years telecommunications experience in the USA, Japan, Europe, India, Dubai, Malaysia, Latin America and various other countries.

He has extensive senior expertise in international telecommunications sales, marketing, business development and customer service delivery. John also has executive experience with general management, marketing, P&L, product development and revenue management responsibilities in both consumer and enterprise segments for both the fixed and mobile sectors. In addition John has an impressive operational and management portfolio of established proven expertise in incremental business value creation and management of large multi-cultural teams in Vodafone Global in the UK, Japan Telecom in Tokyo, AirTouch and Pacific Bell (now AT&T) in San Francisco and Tokyo, Airtel in Delhi and other telecom and technology companies. Additionally he has extensive large scale business development, M&A and operational project experience across the USA, Europe, Asia and Latin America. John has an MBA and MS in Telecommunications from the Golden Gate University in San Francisco, California, USA. You can find John’s personal blog at johnlincoln.blog.com.

He can be contacted via: john.lincoln@gmail.com, Twitter: @lincolnjc.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MARKETING

MOBILE STRATEGIES

GETTING WITH THE PORTABLE PROGRAMME Mobile devices are fast becoming the single most important means of communication. Consumers have grown more demanding as has the expectation that everything should be only a fingertip away.

Never have there been more opportunities to integrate mobile into the broader marketing mix and to generate new business, says Abbas Alidina, Founder and Director, Logicks.com.

L

ast year in the United Arab Emirates, the mobile device penetration rate crossed 200%.

This means that we reached a stage where there were twice as many mobile devices as people in the UAE. Globally, there are over four billion mobile phones, of which approximately one billion are SmartPhones. In many countries, the penetration of mobile devices is over 100%, which means that there are more mobile devices than people.

Consumers have changed As consumer behaviour continues to evolve in the social media era, attention is shifting away from the destination Web of the nineties and towards a social Web that is distributed across numerous platforms such as Facebook and Google+ and devices like iPad and BlackBerry.

The capabilities of mobile devices have rapidly caught up to those of desktop and notebook PCs. We can now use our mobile phones to have video chats, play games, browse social networks, listen to music and much more. People have started to replace

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fixated on the screens of their mobile devices, it should come as no surprise that there is a huge opportunity for businesses to leverage mobile as a powerful marketing tool.

Ask why, not how Unfortunately, most businesses that perform mobile marketing are focused on mobile tactics. As new technologies and platforms come up, they rush to develop a solution for each platform without putting much thought into why they are performing these activities.

Rather than rushing to develop mobile applications for the iPhone, iPad, Android, BlackBerry and all other possible devices, stop for a minute and ask yourself what you are trying to achieve with mobile marketing. Why are you doing it? And why will it improve the experience that your customers have with your brand?

Developing a mobile marketing strategy Businesses must research how their customers use mobile technologies across the customer engagement cycle.

their primary computers with mobile devices.

Our heavy usage of mobile devices has conditioned us to become dependent on them. We are accustomed to being connected all the time – whether we are at home, work, or travelling. Even when we go on vacation, we remain connected to our friends, families and sometimes unwillingly to our jobs.

With consumer attention so heavily

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

The customer engagement cycle Consumers rely on their mobile devices

MARKETING

MOBILE STRATEGIES

you may be likely to go jogging more consistently.

Going forward, mobile apps will become integrated with our lifestyles on a much deeper level than they already are. As a result, we will continue to become even more dependent on them.

Rather than rushing to develop mobile applications for the iPhone, iPad, Android, BlackBerry and all other possible devices, stop for a minute and ask yourself what are you trying to achieve with mobile marketing. Why are you doing it? And why will it improve the experience that your customers have with your brand?

to guide them through every step of the purchase process, from determining if they need a product, to making a purchase, to evaluating a product post-purchase, and to promoting a purchase to their friends.

By studying the mobile usage habits of customers, you can establish a mobile marketing strategy that provides value to users throughout the customer brand experience and not just features and functions.

Rapid growth of mobile usage This year more SmartPhones and tablets will be sold more than PCs. By 2014 mobile Internet will overtake desktop Internet usage (Microsoft TAG)

Mobile Websites As the growth of mobile Internet usage outpaces that of desktop Internet usage, soon more people will browse your website from a mobile device rather than from a laptop or desktop computer.

Unfortunately, the majority of Websites are still designed for laptops or desktops

with no consideration for mobile users.

Businesses must develop mobile friendly versions of their Website to ensure that they display correctly on a device such as an iPhone or BlackBerry.

Mobile applications or apps In addition to mobile friendly Websites, businesses have an opportunity to provide their customers with a more enhanced experience by developing mobile applications. A mobile application is a software program that is downloaded onto a phone. Users can download mobile applications from the Apple App Store, BlackBerry App World or from various other mobile app stores.

There are free as well as paid mobile apps available on the market. Market research firm, Gartner, forecasts that global mobile app store revenues will triple from USD 5.2 billion in 2010 to USD 15 billion in 2011, and keep growing to an astounding USD 58 billion by 2014.

Why do customers use apps?

We already use mobile apps in our personal lives for a number of different reasons, from staying in touch with friends, to playing games, to making our lives easier.

Mobile apps have become critical tools for many of us. For instance, you can go for a jog in the park and automatically track your progress online with an iPhone app. Then you can share this activity with friends on social media in real time via the same app, so that they can provide support and feedback. This support structure may keep you motivated and

Generate business with mobile marketing While there are numerous ways to leverage mobile marketing to generate business, here are three tried and tested methods that could work wonders for your business if implemented correctly: Mobile coupons: Enable customers to opt-in for mobile coupons. It is an effective way to encourage users to try a product or service or visit your locations. Mobile coupons have a high redemption rate and it is easy to measure the return on investment.

Mobile commerce: Customers want the flexibility to purchase whenever and however they want. Make it easy for customers to browse your products or services and purchase directly from their mobile phones.

Social integration: Make it effortless for customers to interact with you via social media. For instance, allow them to interact with your brand as well as share product information, reviews, coupons via Facebook, Twitter or Google+.

The mobile marketing industry is growing at a tremendous pace. It all begins with studying and understanding how your customers use mobile technologies.

About Abbas Alidina is the Founder & Director of Logicks.com, a digital marketing agency that helps businesses across the Middle East to improve their online performance. With more than ten years of marketing experience, he has developed strategies and executed projects for numerous global and regional brands.

For more information please visit www.logicks.com or follow Abbas on Twitter @AbbasAlidina.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MARKETING

CUSTOMER COMMUNICATIONS

TALK TO ME The trick to satisfying financial services customers is to add sustained personal communications, says Dan Smith, Head of Integrated Marketing for the Middle East and Africa region of Xerox’s Developing Markets Operations.

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e’ve heard it often enough – it costs more to acquire a new customer than to keep an existing one. If a business has a 20% customer attrition rate on average, it must acquire 20% net new clients each year just to remain in the black.

So it’s easy to see why using marketing dollars effectively to maintain customer loyalty is essential to revenue stability and, growth. Not only this, customer experience will be a key competitive battleground; customers will join for a superior experience and customers will leave over a poor one.

These tips can help you to make the most of customer communications: Strike early: Most crossselling opportunities occur during the first few months of a customer relationship. Research shows that companies that communicate with customers early and often in the relationship improve cross-selling results and lower attrition rates. Welcome kits are a common means of building on the initial relationship; they need to be crafted carefully and tailored to the customer and product needs.

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and comprehensive workflow capabilities to make servicing the customer a natural and seamless act for your customer service agents.

Take inventory: Any communication with a customer (by phone, Web or face-toface) is an opportunity to acquire data about their life stages, attitudes, needs and preferences. The information can then be centralised and integrated into your inventory of brochures, catalogues, fulfilment literature, direct mail and statements so that details about individual customers or targeted segments can be placed in your own document templates to deliver greater impact.

Analytics will be crucial; you can take a page from what retailers do in this regard, in order to know your customers well enough to both sell and service them.

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Get personal: You are more likely to generate sales if you personalise every document, e-mail and so on. Incorporating variables in documents such as the customer’s name, product type or life event is the key to generating response rates that far outstrip the typical 0.5% – 2.0% expected from direct-mail campaigns. Of course you also need to know if your customer will welcome personalised communication or if it will be considered an invasion of privacy.

For example, getting personal can go high-tech with quick response codes (QR codes), modules that marketers print on communications for customers to scan with SmartPhones, directing them to a personalised landing page with tailored information about products and services, case studies, helpful tools and so on.

In order for QR codes to be effective,

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Dan Smith

Be responsive: By scanning and electronically storing documents, you can provide a faster, more efficient service, obtain information for more personalised communications, ensure greater data accuracy and increase compliance.

Looking through paper records or shunting them off to storage facilities will not be deemed adequate in the future. Start thinking now about back file conversions, information repositories

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SME ADVISOR MIDDLE EAST SEPTEMBER 2011

MARKETING

CUSTOMER COMMUNICATIONS

marketers should stay true to the basic principles of marketing. People will only engage and interact with the content if it is relevant to them. The content on the initial communications piece must be relevant in order for the person to be interested in navigating to the landing page, and the content on the site must be relevant in order for the person to spend a meaningful amount of time there.

Keep it simple: Keep product information – including rates and fees – as simple as possible so your staff can explain them and customers can understand them.

customers are increasingly expecting their service providers to communicate with them via social media. Businesses must ask themselves: what are our consumers’

improve efficiencies. A strong business process outsourcing partner can automate workflow, consolidate vendors and improve touch points with your customers.

Different customers prefer different communications channels. Communicate offers in terms that customers or prospects will readily understand, through the channel they prefer, and at a time when they are open to receiving it.

5

Be creative: Customers say they would be more responsive to more informal and creative communications; if your business requires it, get the marketing and legal departments to work together to produce understandable and compliant communication.

6

Change the channel: Different customers prefer different communications channels (direct mail, e-mail, online or text messages), so ask early in the relationship which method the customer prefers and stick with it.

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expectations and requirements around social media? What information do they want shared via social media, and what conversations do they want to participate in?

To address these questions, many businesses have begun to create social media teams charged with transforming traditional methods of doing business.

Beyond social channels, however, you must decide whether to build the infrastructure and processes to manage the social media communications, or to “borrow” the infrastructure and process instead (meaning: outsource it). Social media channels are fabulous opportunities to learn what your customers are thinking about.

People will only engage and interact with the content if it is relevant to them. The content on the initial communications piece must be relevant in order for the person to be interested in navigating to the landing page, and the content on the site must be relevant in order for the person to spend a meaningful amount of time there.

Communicate offers in terms that customers or prospects will readily understand, through the channel they prefer, and at a time when they are open to receiving it.

8

Embrace social media: Don’t be afraid. In the modern communications landscape,

Knowing when to engage a third party solution provider who specialises in optimising business processes is becoming more important. Suppliers can bring innovation – leveraging technology and process enhancements in customer care, transaction processing and document and digital asset management capabilities to

Power is changing hands in the industry, slowly but inexorably. Power is moving to the customer. Customers will insist on dealing with you when and where they choose, with their preferred channel and on their terms.

Customers will want to be in control and know that you consciously put them in control with their needs first. Improving the customer communications process is a vital step for attracting and retaining the right customers.

About Dan Smith is Head of Integrated Marketing for the Middle East and Africa region of Xerox’s Developing Markets Operations. He was appointed to this position in August 2008 and is based in the UK. He manages all facets of marketing – including channel communications, product marketing support, demand generation programs, electronic and e-marketing initiatives – for the Xerox lines of business in more than 70 countries comprising the Middle East and Africa region.

Dan joined Xerox’s UK operations straight from university in July 1997. His first role with the company was as a systems analyst for color solutions and pre-sales technical support. In August 2000 he joined a team tasked with establishing a channels business model for Xerox UK At the start of 2003, he began working with partner development in the UK and a Xerox sales team for enterprise-size organisations.

In October 2004 Dan joined DMO to drive the Xerox Office strategy in the Middle East and Africa and in 2007 he became Head of Marketing for the Xerox DMO Office business, overseeing a drive to maximise channel communication and demand generation in emerging markets.

Dan is a law graduate from Hertfordshire University in the UK.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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MARKETING BLOGGING

DEAR DIARY...

Alan Devereux, Communications Officer for the British Business Group, Dubai and Northern Emirates, discusses why the power and influence of blogs should not be taken lightly.

T

he word blog comes from two words pushed together, Web Log, which is in essence an Internet diary or journal. Despite the silliness of its name, a blog is an extremely sensible thing. Mae West, a Hollywood darling of the 1930s once said: “Keep a diary and one day it will keep you.”

Nearly 100 years later and the saying still stands true.

Blogs can take many forms, there is no one set rule for blogging. A blog can be a personal diary, a company newsletter, a review Website or a collection of photographs. A blog can be anything the user wants it to be. The one thing you should always remember is that a blog is a newspaper column, an interview and a window into you or your company’s practices. Blogs should not be taken lightly.

You are now wondering what your blog should be about; do you even have the time to write one? How do you promote it? How will it generate income?

The first thing you need to do is decide what your blog will be about. Whatever you decide it needs to reflect you as an expert in your field. I have a friend who is a headhunter (he likes the term) and one of his blog entries was C-Level interview tips. A COO seeking to move companies saw the blog and hired him, passed the blog to five of his friends and they also hired him. At 40% commission of the contract, he made a lot of money because of his blog, because he sat down and wrote about

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Alan Devereux something he was and expert in.

You are reading this now because of my blog. I wrote four entries and when I approached SME Advisor, I sent them the link to my blog. They were happy so I adapted the first two entries and made a content calendar for the year. You are reading my words because I wrote a blog – blogs work.

To move back a sentence or two, I mentioned the content calendar. When you start you must make a plan. Let’s imagine for a moment that you are going to update your blog weekly. You write the first 500 words, upload and share.

You write the second article, upload and share.

Come the third week you are short on ideas, or you have a workload that does not permit sitting and thinking for an hour, or perhaps your child is ill and you need to dedicate some time to domestic chores.

If for any reason you run out of content your blog will become stale (and therefore a bad advert). We are not all naturally gifted writers. Those that are will find blogging easy;

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

those that are not will need a plan. My plan was set in May this year and told me what each article was going to be about. There may be some changes along the way but I have a good idea of what I need to do.

And, I do not write my entries the day before the magazine needs them, I write them in advance. My advice is to update your blog every two weeks and before you publish the first article you should have written three entries at least. That gives you six weeks to write the fourth entry. After a while it becomes easier.

I now have a question for you – a question I ask many people who I speak to about digital and social media practices. Would you put your PA up for an interview with a national newspaper about your company? I make this point as it will be very tempting for you to delegate your blog to someone else, but there is no one in your company who knows it as you do.

There is, however, scope for you to have different writers. You may want to express the quality you have in your organisation by allowing your CFO to write an entry or perhaps you have a genius in your IT department. If potential clients see an organisation full of intelligent people they are likely to be impressed.

You can have a blog as part of your Website or you can register an account with www.blog.com, or www.blogger.com, or any one of the multitude of free services found with a simple Websearch.

The Huffington Post was bought by AOL for USD 315 million. The Huffington Post is a blog.

About Alan Devereux is a husband, a father, and Communications Officer for the British Business Group, Dubai and Northern Emirates, and can be found here: http://ae.linkedin.com/in/alandevereux He can be contacted at info@britbiz-uae.com

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SALES

PITCHING TO CLIENTS

THE GOOD, THE BAD AND THE UGLY At a time when a handful of accounts can mean the difference between make or break, many sales companies are pushing the boundaries to seal the deal. But in doing so some are committing cardinal sales sins, says Jennifer Baxavanis, Managing Partner, BAX Consulting.

I

am going to share a story about Karim, Vice President of sales at a well known occupational health and safety company, and of the good, the bad and the ugly, which transpired from his sales tactics.

The story Karim was anxious to meet up with me to share some of his latest sales successes.

He told me, “Jennifer, you are not going to believe this, but we have taken 54% of the market from our competitors in two months. You have to train sales persons on these lessons.”

Karim has many of the qualities of an effective sales person: confident, switched

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Karim could have applied a “positive tension” by promising an added service if the contract was closed on the same day. Also, cornering a prospective buyer to sign a contract will not bring repeat business.

on, empathetic, carries himself well, and adaptable to any environment and any person.

“Shoot,” I said.

“I had to do something! My sales team has spent the last few months just seating around, so I decided to create a multiple day field trip to show them how it is done. I

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

piled the three of them in the car with me, and told them our objective: We are taking the market away from x and y, I informed them that they are to breathe sales. These days, they are either in a sales meeting, or in the car, or on the phone fixing up the next meeting. Once we even stormed into the customer’s office, introduced me

SALES

PITCHING TO CLIENTS

as the VP of sales, talked to them, stuck the contract in their faces and made them sign.”

I interrupted, “Interesting. What was the dialogue between you and the prospective buyer? Did you ask questions or talk about the company?”

Karim carried on: “No, I tell my sales persons not to ask too many questions.

I have taught them to tell the customers what they need to know and to ask if the buyer has any questions. If the buyers replied that they have no questions, then we pass them the contract and say ‘Great, sign here.’ Of course, we had to find out who their contract was with, how much they were paying and when the contract expired. Then, I told them that they were overpaying and they could sign now for the ‘real’ price and take what they were paying down by about 20%.”

“Did they sign?” I asked.

“Jennifer, we stayed in their office until they signed, and a lot of them did. They could not get rid of us,” Karim added.

“Is your company offering something different or better? How did you convert them,” I asked.

“Well, they liked the fact that I came because it shows energy and persistence.

Jen, they were not used to their supplier coming to their office, and they liked the lower price. We have nothing more to offer them, as our service is the same as our competitors. There is not that much room for customisation,” Karim continued.

“Some of them felt loyalty towards supplier and some of them were angry at their supplier, so we made sure we pushed the angry ones to convert using a lower price.”

“Wow, so it worked for all of them?” I asked excitedly.

“With some of them it did, and with others it didn’t. Our competitors figured out what we were doing and sent out renewal forms with even lower prices to the customers we had seen and also to the customers we had not seen yet. They

Cutting prices devalues your product. It is more effective to show how your price equals the value you are promising.

Karim should have asked the buyer what he was looking for in health and safety services and then matched that with his service offering and price.

some lethal mistakes. He committed the good, the bad and the ugly of sales.

The good Take control: Karim abandoned the reliance of “relationship based” selling and took the bull by the horns. He did well in going to see the prospective buyer, provoking a pattern change.

1

Form an objective per sales call: Karim and his sales force formed an objective as per sales call.

The objective did not include their service presentation or get to know the customer.

“I told them our objective – we are taking the market away from x and y.”

2

Jennifer Baxavanis

thought they were going to outsmart us.

So, do you know what we did? When we came back the second time to their customer, we took off another 20% just to make sure the customer saw that their current supplier was still deceiving them.”

“Wow Karim, that is quite aggressive.

How did the customer react?” I was so intrigued by these methodologies.

“Some of them liked it and some of them felt suspicious, but we stayed until we obtained an answer. We even followed one guy to his car to sign, and he asked us to leave him alone,” Karim added.

I couldn’t believe it, so I asked, “Do you think that customers will stay with you for a long time? Do you think these are the best methodologies?”

The good, the bad and the ugly Karim did apply many effective selling approaches, but he and his team made

Train your team: Karim took it upon himself to go into the field with his team to show them how his sales process works. On-the-job training is the most effective way to increase learning retention.

3

Use an authority: The prospects felt flattered that the company’s VP of sales took the time to see them. Karim used his authority to influence the buyer’s perspective of his sales effort.

4

Determine the budget and timeline: Karim made it a point to find out the time and budget parameters to qualify the prospect.

5 6

Be persistent: Karim attempted to close a contract at the first

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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SALES

PITCHING TO CLIENTS

contact meeting. His urgency pushed the customer into a buying decision.

Always remember that the customer is the expert; the more you find out about your customers’ drivers, needs, and objectives, the more you can match those with your service offering and use the information as product development research.

The bad and the ugly Don’t be pushy: In the same way that we applaud Karim for being persistent, there are instances where Karim pushed too hard and the customer resisted by becoming uneasy.

Karim could have applied a “positive tension� by promising an added service if the contract were to be closed on the same day. Also, cornering a prospective buyer to sign a contract will not bring repeat business.

1

Don’t cut your price: Karim cut prices because he could not show the value his service offers compared to his competitors.

Cutting prices devalues your product. It is more effective to show how your price equals the value you are promising. Karim should have asked the buyer what he was looking for in health and safety services and then matched that with his service offering and price. The prospects, in this way, feel like they are buying what the want or need, and the sales team can achieve its objective.

yourself if you are offering a bespoke service that makes it more expensive or a simpler service that makes it less expensive.

2

Don’t cut prices more than once: If cutting prices the first time is the bad, then cutting the price a second time is definitely the ugly.

In reducing your fees, you are no longer only devaluating your service but you are also devaluating your industry across the market. Karim should have matched the quality of his services or brand with the prices and stuck by them.

3

Don’t forget that the customer is the expert: Karim neglected to find out what the customer really wanted or needed. “I tell my sales persons to not ask too many questions.�

He was not successful in some of his sales because the buying decision became based on a price war. He assumed he knew what

4

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In your sales meetings, ask the prospect what they are looking for in your service and compare it to the fees you are charging. t "MXBZT SFNFNCFS UIBU UIF DVTUPNFS is the expert; the more you find out about your customers’ drivers, needs, and objectives, the more you can match those with your service offering and use the information as product development research. Deals are closed when your service offering matches your prospects’ need, budgets and timing.

2

the client wanted and chose to attract and convert them based on price. Easy come, easy go. Some of the prospects went back to their current suppliers and played the same game back.

What does this mean for your business?

In looking at Karim’s experiences in sales, we can learn some lessons for SME companies that are managing a sales team from 1-20 sales persons. Here are some tips: t %PO U IJSF PS GJSF ZPVS TBMFT UFBN empower and capacitate them with sales process training, in the classroom or onthe-job. t 0GGFS JODFOUJWF TDIFNFT UP LFFQ UIFN selling and seeing customers face-to-face. t -FBSO IPX UP SFTPMWF UIF QSJDF WT WBMVF objection: Before the meeting, make sure your pricing is competitive. Ask yourself: Is my service or pricing similar to my competitors? If the answer is “no�, ask

1

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

About Jennifer Baxavanis is the Managing Partner of BAX Consulting LLC which is a sales and training consultancy that helps clients increase their top line. The services are mainly based around sales approach and sales process.

BAX Consulting is registered in the USA and in the UAE, with international clients. It currently specialises in the security, occupational health and safety, media, healthcare, and oil/gas sectors.

For more information about BAX Consulting visit www.baxllc.com.

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SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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LEGAL

COMMERCIALISING IDEAS

TURNING THOUGHT TO REALITY Do you have an idea? Does it benefit a business? Have you assessed the value of your idea and do you think you can commercialise it?

In the first of a two-part article, asks Geethalakshmi R., CEO and Managing Partner, Associated Business Attorneys.

T

hough simple, an idea carries an asset value, but to properly evaluate it we need to ask the right questions.

Transfer of technology Technology transfer is a term used to describe a formal transfer of new discoveries, innovations, creativity, modules.

Simply put; ideas that result from an action that is exclusive from so many actions a person or entity could do. An idea that has ingredients such as research, experiments, testing, implementations, can prove to be an example of excellence in some form, thereby carving a commercial value by itself.

Benefits Transfer of technology helps spawn new businesses, create industries, open new markets and spread new business relations globally. It leads to new products, new systems and improves our quality of life. With new cancer treatments, faster modems and environmentally friendly metal processing, technology transfer has come a long way.

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Steps in technology transfer In brief, technology transfer essentially includes the basic concept of preparing the technology in question to become viable for commercialisation. Here, while concentrating on raw technology converted into commercially viable technology, there are steps usually adopted by agencies who promote commercial entity for the subject technology.

The agencies appointed for securing the commercial potential for the property

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

maintain the procedures, which in brief would be: t 5IF EJTDMPTVSF PG JOWFOUJPO EPDVNFOU containing the complete information about the invention, or discovery t 3FDPSE LFFQJOH BOE NBOBHFNFOU PG BMM the documents t &WBMVBUJPO BOE NBSLFUJOH PG UIF JOWFOUJPO t 1SPTFDVUJPO PG JOUFMMFDUVBM QSPQFSUZ GPS the invention t /FHPUJBUJPO XJUI UIF QSPCBCMF CVZFS PG the invention t %SBGUJOH PG UIF -JDFOTF "HSFFNFOU t .BOBHFNFOU PG UIF BDUJWF MJDFOTFT There is also the need to apply the relative rules, regulations, legal formalities and comply with the policies concerned with the technology.

Commercial transfer and acquisition of technology The sale and purchase of the exclusive rights to a patented invention, the permission to use the invention, or of the know-how, takes place through legal relationships between the owner of the exclusive rights, or the supplier of the know-how, called the transferor and the person, or legal entity, which acquires those rights or permission, namely the transferee.

Those legal relationships are essentially contractual in nature, which means that the transferor of the technology consents to transfer and the transferee consents to acquire the rights, the permission or the know-how in question.

There are three principal legal methods that can be used to bring about a

LEGAL

COMMERCIALISING IDEAS

commercial transfer and acquisition of technology.

The sale: Assignment The first legal method is the sale by the owner of all his/her exclusive rights to a patented invention and the purchase of those rights by another person or legal entity. When all the exclusive rights to a patented invention are transferred, without any restriction in time or other condition, it is said that an assignment of such rights has taken place.

The transferor is called the assignor and the other person or entity, the transferee, is called the “assignee.� When an assignment takes place, the assignor no longer has any rights in respect of the patented invention.

The assignee becomes the new owner of the patented invention and is entitled to exercise all the exclusive rights to the patented invention.

The license contract The second legal method is through a license, that is, the permission by the owner of a patented invention to another person or legal entity to perform, in the country and for the duration of the patent rights, one or more of the acts which are covered by the exclusive rights to the patented invention in that country.

When that permission is given, a license has been granted. The legal document evidencing the permission given by the owner of the patented invention is usually referred to as a license contract or, more simply yet, as a license. The owner of the patented invention who gives that permission is referred to as the licensor.

The person or legal entity who or which receives that permission is referred to as the licensee. The license is usually granted subject to certain conditions which will be set out in the written document by which the license is granted to the licensee.

The know-how contract The third of the three principal legal methods for the transfer and acquisition of technology concerns know-how. It is

Commercial transfer of technology may also take place in connection with the system of the franchising or distributorship of goods and services. A franchise or distributorship is a business arrangement whereby the reputation, technical information and expertise of one party are combined with the investment of another party for the purpose of selling goods or rendering services directly to the consumer.

Geethalakshmi R

possible to include provisions concerning know-how in a writing or document that is separate from a license contract. Whenever provisions concerning know-how appear in a separate or distinct writing or document, that writing or document is normally called a know-how contract.

Through such provisions, one party, the supplier of the know-how, undertakes or promises, to communicate the knowhow to another party; the recipient of the know-how, for the use by that other party.

The know-how may be communicated in a tangible form. Documents, photographs, blueprints, computer cards, and microfilm, among others, are all illustrations of tangible forms.

Examples of know-how that could be transmitted in such forms are architectural plans of the factory buildings, the

diagrams of the layout of the equipment in the factory, drawings or blueprints of machines, lists of spare parts, manuals or instructions for the operation of machines or the assembly of components, lists and specifications of new materials, labour and machine time calculations, process flow charts, packaging and storing instructions, reports on stability and environmental aspects, and job descriptions for technical and professional personnel. Such knowhow in tangible form is sometimes referred to as technical information or data.

The know-how might also be communicated in an intangible form.

Examples would be an engineer of the supplier of the know-how explaining a process to an engineer of the recipient or the manufacturing engineer of the recipient and witnessing a production line in the enterprise of the supplier. Another example would be training in the factory of the recipient, or at the enterprise of the supplier, of personnel of the recipient.

Sale and import of capital goods The commercial transfer and acquisition of technology can take place with the sale, purchase and import of equipment and other capital goods. Examples of capital equipment are machinery and tools needed for the manufacture of products or the application of a process. Raw materials, for example, crude oil or phosphoric acid, can also be considered as capital goods in that although they are products in themselves, they may be necessary for the manufacture

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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LEGAL

COMMERCIALISING IDEAS

of another product, such as gasoline or fertiliser.

Also, intermediate goods, such as cotton or polyester fibre, or woven cloth and leather, which is to be cut and sewn into clothing, and parts or other components, such as tires, batteries, radiators and engines, which are to be assembled into an automobile, may be considered in the nature of capital goods in that they are needed in the manufacture of other products.

Franchising and distributorship Commercial transfer of technology may also take place in connection with the system of the franchising or distributorship of goods and services. A franchise or distributorship is a business arrangement whereby the reputation, technical information and expertise of one party are combined with the investment of another party for the purpose of selling goods or rendering services directly to the consumer.

The goods in question may be durable, as in the case of automobiles or home appliances. They may be consumable in use, as, for example, prepared food or beverages. The services may extend to the rental of capital equipment, for example, automobiles, trucks or other power equipment, or to hotel operations, or dry cleaning facilities, or secretarial help.

The consultancy arrangement The help of an individual consultant or a firm of consultants that will give advice and render other services concerning the planning for and the actual acquisition of, a given technology can be useful, if not indispensable, for such enterprises, entities and governments that wish to acquire technology from enterprises in other countries.

In such a business arrangement not only is help received in acquiring the technology but the experience gained and the lessons learned in engaging and working with the individual consultant or firm of consultants will be valuable knowledge that can serve to better carry out future projects. Design

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There are two fundamental forms of joint venture, the equity joint venture and the contractual venture. The equity joint venture is an arrangement whereby a separate legal entity is created in accordance with the agreement of two or more parties. The parties undertake to provide money or other resources as their contribution to the assets or other capital of that legal entity.

and engineering services are a typical example.

of expressing the completion of the tasks agreed to between the parties.

The turn-key project In certain instances, two or more of the business arrangements, and the legal methods that they reflect, can be combined in such a way as to entrust the planning, construction and operation of a factory to a single technology supplier, or to a very limited number of technology suppliers.

Thus, the turn-key project may involve a comprehensive arrangement of certain of the legal methods, whereby one party undertakes to hand over to his client, the technology recipient, an entire industrial plant that is capable of operating in accordance with agreed performance standards.

More usually, the turn-key project involves the undertaking by one party to supply to the client the design for the industrial plant and the technical information on its operation. In the latter event, supplementary arrangements might also be made for the acquisition of rights to the technology, for civil engineering work and for provision of technical services and assistance concerning the construction of the plant, the purchase and installation of equipment, raw materials or parts and components, training, and supervision of the operation of the plant, at least in its initial stages.

It is called a “turn-key” project because the end result is to “turn” over to the client the “key” to the door of the industrial plant. That is a symbolic way

Joint venture arrangements There are two fundamental forms of joint venture, the equity joint venture and the contractual venture. The equity joint venture is an arrangement whereby a separate legal entity is created in accordance with the agreement of two or more parties. The parties undertake to provide money or other resources as their contribution to the assets or other capital of that legal entity.

On the other hand, the contractual joint venture might be used where the establishment of a separate legal entity is not needed or where it is not possible to create such an entity. This may be the case where the project involves a narrow task or a limited activity, or, for a limited time, or where the laws of the country in which the business operation is to be conducted do not recognise the ownership of property by foreigners. The relationship between the parties will be set forth in the contract or agreement concluded between them.

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

About Advocate Geethalakshmi is held in great esteem and high regard amongst her profession. She is the CEO and Managing Partner for Associated Business Attorneys FZC, UAE, ABA Management Consultants, Dubai UAE, ABA Investments LLC, Dubai UAE and Associated Business Attorneys, Bangalore India – a position which is not common for an expatriate woman in the profession. Geetha can be reached at geetha@abattorneys.com

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BUSINESS GROWTH FINANCING

HOW TO BE IRRESISTIBLE TO BANKS There is the impression that banks don’t want to lend under any circumstances but this is an urban myth. Banks do want to loan and they want to grow just like any other business. The bad news is there are some inviolable requirements you need to fulfill before any financing is considered, says Vikram Venkataraman, Director, Salvus Strategic Advisors.

T

o understand how to gain financing from banks, one needs to understand how banks think.

A fundamental thing to remember is that they only share your down-side; they have nothing to gain from your up-side. In other words, if you go bust, they lose money. If you make millions, they only earn a fixed rate of interest.

Hence, their view of any business is vastly different from that of an entrepreneur.

Banks view every business as primarily a venture involving risks and seek to mitigate these all the time. Therefore, keep in mind

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Vikram Venkataraman

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

that bankers may not be excited by a very clever business idea that is a “first”, for example. They would much rather lend to a boring, predictable and stable business! Here is how a bank will view a business that is seeking finance: ! What are the financial, business and structural risks? !"How can these be best mitigated? !"What is the ability to repay and how can this be demonstrated? !"How can we establish the willingness to repay (reputation, integrity and so on)? !"Is it profitable for the bank? !"What security or collateral can the bank get and how enforceable is it?

However passionate you may be about your business, remember bankers are not.

They are worried about protecting the bank and themselves. You therefore need to put yourself in their shoes before applying for a loan.

Are you a start up?

If yes then, regrettably, it is very difficult to receive funding in the UAE, unless you stump up 100% collateral, which of course defeats the purpose. However, you need to remember that to seek funding, you need to

BUSINESS GROWTH BANK CREDIT

prepare your firm well in advance. Typically UAE banks require firms to be at least four to five years old, with at least the last three years being consistently profitable. So if you are a young firm you would be well advised to take a few steps: !"Open operating accounts with at least two banks (which have SME divisions) and build a track record with both. !"Appoint an auditing firm (ensure it is bank-empanelled) to audit your books from year one. !"Invest in a good accountant who will maintain reliable books – or outsource. !"Build a good reputation with your suppliers, employees and clients; banks will check in the market and talk to people about what kind of person you are. This is very important. Remember: banks talk to each other too.

testimonials from clients. !"Prepare a file of your business plan, audited statements, brochures, testimonials, trade licence, MOA, bank statements for the last six months and all the other documents mentioned above. The careful preparation of a professional file makes the banks’ job easier and conveys to them the impression

Are you looking for growth capital?

If your firm has been around for a few years and meets the criteria mentioned above, you should be in good shape to approach a bank for financing. However, you still need to follow some steps which, all other

that they are dealing with a professional and organised outfit. !"Identify the right type of bank. You have to ask around. Some banks are slow and ultra-conservative, others are pragmatic and speedy. Some will not lend to the industry

Prepare a file of your business plan, audited statements, brochures, testimonials, trade licence, MOA, bank statements for the last six months and all the other documents mentioned above. The careful preparation of a professional file makes the banks’ job easier and conveys to them the impression that they are dealing with a professional and organised outfit.

confirm. Remember, it is hard work to make your firm “bank-friendly”, but careful and far-sighted preparation can help you do this quite easily.

About

To seek funding, you need to prepare your firm well in advance. Typically UAE banks require firms to be at least four to five years old, with at least the last three years being consistently profitable.

things being equal, can cut the lead time of processing from six months to two months.

Here are five basic steps to be followed: !"Clearly identify your financing needs. Your request should be backed by numbers – get help, if necessary, to prepare a robust but simple financial working. !"Prepare a brief business plan. You can get a format off the Internet but it has to be a combination of a business plan and a bank’s credit application. This means your plan has to contain detailed information on your business model and industry background, terms of trade, history, organisation chart and CVs of key people, financial snapshot and audited statements, list of suppliers and clients, and

stage firm. If you are three or four years into business, then you can carefully plan and take steps to ensure that all the boxes are ticked.

If you are not prepared, chances are that you will go into a tailspin with banks – some may say “no” instantly, some may give you the run-around for four months and still not

you are in – check if you are on a negative industry list! Talk to people and make a shortlist. !"Try and get an introduction to a banker at your chosen bank from a mutual friend, acquaintance, or bank client who knows both parties well. Bankers put a lot of weight on good references. Send your file in advance, take a copy and attend the meeting ready to make a brief presentation.

This seems easy but it is not, especially points one and two. If you cannot do it yourself, seek outside help. It is well worth it. Securing bank finance is relatively easy if you have the right ingredients in place, which you must ensure, if you are an early

Vikram Venkataraman is a career banker with 25 years of experience in banking in India and the Middle East with various banks. Some of the key senior positions he held are: t &YFDVUJWF %JSFDUPS 3FHJPOBM )FBE PG $SFEJU Structuring ABN AMRO Bank, Middle East and Africa. t 'PVOEJOH .FNCFS PG .BOBHFNFOU 5FBN BOE )FBE of Corporate & Institutional Banking, Dubai Bank. t )FBE PG 4.& #VTJOFTT 5SBOTBDUJPO #BOLJOH BOE Factoring, Mashreq Bank, Dubai. t 7BSJPVT BTTJHONFOUT JO $PSQPSBUF #BOLJOH JO HSBC India.

His most recent experience in banking has been as the Head of the SME Business at Mashreq, which he left in 2010 to co-found an SME focussed investment banking firm – Salvus Strategic Advisors, JLT in Dubai and Salvus Capital Advisors Pvt. Ltd. in Mumbai. Salvus advises SMEs with the objective of helping them grow. Raising equity and debt capital is an integral part of Salvus activities.

Vikram has also been an entrepreneur in the wellness business, giving him a unique perspective of SME issues, both from a banking and entrepreneur’s points of view. He holds a BA from Loyola College, India and MA from Oxford University, UK. He has served as the Secretary of the Oxford University Economics Society.

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BUSINESS GURU

HAMDAN MOHAMED

BREAKING THROUGH BARRIERS Hamdan Mohamed, Founder, President and Chairman of the Board of the Arab Business Club, has certainly come a long way. Recovering from financial loss with his initial computer business, his journey has taken him to the helm of one of the most influential business clubs in the region. He talks to Mike Byrne about the driving force behind his vision to forge better business relationships, cross-cultural understanding and communication in the business world.

S

peaking about his first steps into business, Hamdan recalls his early years living in Fujairah, where he purchased boxes of groceries and stored them at home. To save time with trips to the store, his mother would buy the supplies she needed and when word spread to neighbours and friends, a tidy profit was soon made.

Fast forward to 1991 and Hamdan was

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opening various stores in Fujairah, but it was with the establishment of a computer shop that he took the first major step into launching an entrepreneurial career.

After completing a four year course in computers in the US, Hamdan returned to the UAE and immediately set up a Website where he could trade goods online. “Back then online shopping was unheard of; people went to the mall to purchase whatever they needed but my

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

online grocery store built an e-commerce platform where groceries could be ordered online and delivered straight to the doorstep,� says Hamdan.

Push ahead a little more in time and Hamdan accumulated a holding company, Teqaniya, which means technology in Arabic, and, which encapsulates several profitable Websites, including a recruitment portal service for UAE nationals (www.wadifah.com) and the

BUSINESS GURU

HAMDAN MOHAMED

From the outset I wanted to break down the barriers between cultures and bring like-minded people of various cultures together to do business and, with this, forge business relationships between global enterprises and the Arab business community.

first accommodation sharing service Website in the Middle East (www.flatmateplus.com). These efforts were recognised when he was awarded the Online Retailer of the Year in 2007 by the Middle East Retail Association.

“By 2007 I was making headway with my businesses but, not being one to rest on my laurels, I thought it was time that I gave something back to the community – I wanted to provide entrepreneurs an opportunity to realise their potentials and fulfil their dreams. For this vision, the Arab Business Club was born in 2008,” he says.

“From the outset I wanted to break down the barriers between cultures and bring like-minded people of various cultures together to do business and, with this, forge business relationships between global enterprises and the Arab business community.”

So did the arrival of the economic slowdown cripple the Arab Business Club before it even got on its feet?

“The sudden and abrupt onset of the recession actually proved a blessing for us because at a time when a lot of businesses were struggling to maintain investment, our scheme of networking events proved invaluable. Many attendees were in search of services and what transpired was a sort of meet and greet, where people could come along and link up with someone who could provide an invaluable service to them,” says Hamdan.

He notes that at this time there were no events of this kind for Arab businesses; what existed were events for

local business councils and networking evenings held for the expatriate community but no unified platform which merged everyone together to talk shop.

“Time is money” never rang so true, so according to Hamdan, it was vital to bring together top management in order to have principles agreed upon without having to go through middle management and where all that was essentially left was the paperwork.

“The speed at which business was concluded became much faster and alliances were swiftly established. Our networking events undoubtedly helped these top decision makers to find business faster and for cheaper – these people were saving money on advertising and

membership is reserved only for the senior official of a business, with specialised and tailored round tables and delegations catered for, on request.

“We have found that by accommodating smaller and more intimate meetings between CEOs, and at times with high ranking government officials, business issues can be discussed and resolved more expediently,” says Hamdan.

“One of the major success stories this year was when we brought together the inventor of an oil spill rescue system with multinational investors where it was agreed upon that the system would be manufactured right here in the UAE.” Premium members are by no means left short with their membership; there is the option of marketing your products and services to the entire membership by bidding with members’ needs and through trade delegations and conferences; receiving market advice and professional feedback from all business industries through their database; availability of the Arab Business Club’s meeting rooms and office

We have our Website where people can register and get to know members worldwide. This effectively acts like a social networking tool and with this we have what we call business match-making – a fully automated application where the needs of one business are placed with the products and services offered by another.

were instead paying only minimal fee for events and our membership,” notes Hamdan.

Reading through the list of different membership options it’s clear why the Arab Business Club has attracted the attention of not only SME owners, but government officials and elite international corporations. Elite

lounges in Dubai and availing of their PR service; not to mention the benefits and discounts from the Club’s partners, including airlines, hotels, car rentals and special event invitations. Membership is open to men and women, regardless of nationality, race, creed or religion.

At the core of the Arab Business Club is the idea of friendships and

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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BUSINESS GURU

HAMDAN MOHAMED

Within the coming months we will be launching the Young Arab Business Club, which will target university graduates working in business organisations and under the age of 30. The idea will be headed by someone who is under 30 and we will have them choose their own board, have the opportunity to interact with senior Club members and have their separate events.

Hamdan Mohamed

partnerships; networking serves as the main tool for this very objective, but, there are various other tools which act as a reinforcement to this.

“We have our Website where people can register and get to know members worldwide. This effectively acts like a social networking tool and with this we have what we call business match-making – a fully automated application where the needs of one business are placed with the products and services offered by another,” notes Hamadan.

He is a big believer in social media; you will find the Arab Business Club active across Facebook, LinkedIn and

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Twitter, with a YouTube channel also in operation. As well as being cost effective, social media has no expiration date and exposure to the needs of businesses and their management is more easily monitored, he says.

With plans to launch a series of Arabic and English televised round table discussions, including audience Q&A participation, it’s obvious that Hamdan in constantly keeping innovation as a cornerstone of the Club.

With the next breath he points out that their events are not restricted to the Middle East and in 2010 he brought the Club’s events not only to Munich and

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Dusseldorf, but San Francisco and Moscow.

“Where possible, we organise not only our own events but also partner up for many international conferences – again it is proving to be one of the many successful ways to broaden the scope of the Club for its members,” he says.

“This year we are expanding even more.

We participated in the Khazan Summit as a Strategic Partner, in June we had the Second Islamic Summit in Astana in Kazakhstan, and we have events arranged for Stockholm, New York and London.”

Speakers for their events are equally impressive. Quite recently they brought speakers from international banks to explain to members how the Arab Spring is affecting the Middle East and GCC and, next month, the UAE Minister for Economy, His Excellency Sultan Bin Saeed Al Mansouri, will address members as well as other high ranking management from multinational companies.

“As much as introducing our members through networking is important, we also see the long-term benefits in educating them through conferences. Business practices and developments move at such a fast pace that constant updates and education is vital for the success of all our members, regardless of industry and geographical whereabouts,” insists Hamdan.

With so much activity, are there any more major developments in the pipeline to help propel the club further into the business sphere?

“Within the coming months we will be launching the Young Arab Business Club, which will target university graduates working in business organisations, under the age of 30. The idea will be headed by someone who is under 30 and we will have them choose their own board, have the opportunity to interact with senior Club members and conduct separate events. My role will be simply one of guidance in helping the next generation progress into the business arena,” he beams with satisfaction.

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BUSINESS PIN UP XTR GLOBAL

EMBRACING THE NATURAL Alternative medicines have been in existence long before modern medicine came to fruition and yet for many it’s something that remains unexplored. Dr. Reza Borhani talks to Mike Byrne about the added benefits of incorporating these non-invasive and non-conventional medical treatments into current health practices and how his company, XTR Global, is providing the management expertise to make this happen.

X

TR Global was established in the UAE in early 2010 as a management company for health centres and clinics wishing to implement alternative and natural medicines. The company specialises in providing guidance on how to integrate natural medicine with conventional medicines so that patients have the best available range of options for treatment.

The founder and CEO of XTR Global, Dr. Reza Borhani, has had an interesting journey before setting up in Dubai. He has received his Doctorate of Philosophy (Alternative Medicines) from the International University for Complementary Medicines (Calcutta, India). He also holds a Diploma in Naturopathy and Neurotherapy (India), Certified teacher and practitioner of Scenar Therapy from Research Laboratory of Medical Electronics (Russia), Certified teacher and practitioner of Ozone Therapy from the Russian Association of Ozone Therapy (Russia), an Advanced Diploma of Remedial Massage Therapy (Australia), and is a holder of Certificate IV in Assessment and Workplace Training (Australia).

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His belief in the nature of alternative and holistic medicine led to the successful establishment of Australia’s first Neurotherapy Clinic in 2005. Tailor-made

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

solutions to treat the cause rather than the symptoms of the disease, has made his treatments quite unique.

“I have travelled the globe and studied different therapies separately. I couldn’t find a place that offers everything so I studied 20 different alternative therapies and how they work, their implementation, their concepts and so on. There is still no one place that teaches you fully how to integrate all of these together and that is something that I have been striving to formulate for quite some time,” he says.

Indeed alternative medical treatment and remedies is something which has been picking up ground in the West over the past decade, but when analysing the Middle East there seems to be a general lack in awareness of where to avail of such treatments.

“Without a doubt one of the major issues XTR Global and other similar organisations face is education and awareness. Traditional forms of remedial treatments have been around for centuries but it is viewed by many as something which is not the final solution,” says Dr. Borhani.

“In a world where the pace of life is

BUSINESS PIN UP XTR GLOBAL

“Treatments like Neurotherapy can prove very effective; by simply exerting pressure and pushing on certain parts of the body, the desired chemicals or hormones can be activated or deactivated from particular organs and blood flow can be increased and decreased.” moving very fast, time is an issue which affects everyone. People want quick-fix solutions and often the root cause of sickness or disease is never addressed. This can be something as simple as a headache or back strain, which can be relieved quite quickly with medication, but it is a short term solution to what may be a long term ailment.”

What is particularly encouraging is that many University medical programmes are now beginning to offer alternative medical treatment as an optional module on their syllabus. The Journal of American Medical Association has reported that up to 60% of medical schools in America are doing just that.

More importantly hospitals and clinics are now beginning to see the benefits to integrating different therapies and remedial treatments with conventional medicine. Over 63% of Americans are reported to prefer an alternative medical treatment option as a first line treatment prior to traditional medicine (1) and in the UK studies have confirmed that at least 20% of medical practices offer ready access to holistic and alternative practitioners.(2) “The corporate world in America and Japan are certainly leading the way in considering alternative options for employees. Yoga sessions, weekend team bonding sessions at clinics and offering meditation classes are just some of the activities improving the overall work efficiency of employees,” comments Dr. Borhani.

“What XTR Global has discovered through market research is that the demand for holistic and alternative medicines is very much present in the Middle East, but the facilities are not. There is a definite desire

Dr. Reza Borhani

by hospitals and clinics to incorporate these practices but the knowledge of exactly what needs to be done is absent and this is where we come in,” he says.

Indeed XTR Global’s plans for the coming year are a very interesting prospect.

Dr. Borhani emphasises that clinics and centres specialising in detoxification are the priority. Because of the nature of Dubai, the services will be targeting corporate clients who can register to attend day classes or weekly stays, depending on the need of the company.

“Many people in the region have to travel to Europe or the Far East to avail of these treatments and the cost can be quite substantial. By investing in clinics and centres here we can offer these services and concentrate on diet, remedial treatments for fluctuating blood pressure, muscle strains and so on,” says Dr. Borhani.

“Treatments like Neurotherapy can prove very effective; by simply exerting pressure and pushing on certain parts of the body,

the desired chemicals or hormones can be activated or deactivated from particular organs and blood flow can be increased and decreased. There is no medication required, no unnecessary surgeries and the results can be as equally effective.”

Dr. Borhani, as the founder and Principal of the International Institute of Neurotherapy, enabled the establishment and accreditation of Neurotherapy in Australia in 2007. During this time the clinic in Australia successfully treated disorders such as depression, chronic fatigue, digestive problems and immune deficiency problems.

“With previous clinics that I established there was a demand from both people simply looking to maintain their current health and also people who were quite seriously ill and wanting to avail of alternative medicines to help eradicate the disease. With the cultural diversity that exists here in Dubai I am under no doubt that there is a similar demand for such clinics,” he says.

“The demand for such remedial treatments is certainly very evident. What XTR Global will be working towards now will be to find a strong platform from which to inform, educate and help promote these natural alternatives through clinics and centres,” says Dr. Borhani.

What is clear is that XTR Global is offering the expertise to help accommodate alternative treatments. Dr. Borhani stresses that Dubai and the UAE stands as a gateway between East and West and with its multi cultural dynamics the government here is in a very unique position to lead the way globally with introducing measurable steps towards integrating these alternative medicines.

References 1) Understanding Complementary and Alternative Medicine, Speroni, Anthony, NIHC, 2009.

2) Integrative medicine models in contemporary health care; Complimentary Therapies in Medicine, Volume 19, Issue 2, April 2011, Pages 84-92; Kate Templeman, Anske Robinson.

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BUSINESS PIN UP

EDUCATION ZONE

LEARNING CURVE We look at dynamic companies and entrepreneurs in the region, what makes them tick, and the buzz on their business.

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ducation Zone (EZone) was founded by Suad Alhalwachi and her husband in early 2003 to provide educational consultancy to schools in the UAE and the rest of the Gulf states.

Despite initial setbacks and numerous bank loan rejections, the couple persisted and EZone is now in its ninth year.

Suad Alhalwachi, CEO, Education Zone, gives us more insight into this enterprising organisation.

What motivated you to enter this field?

I am passionate about education and want the education system to change, to reflect the real needs of the society. And there is no better way of doing it than by educating young minds. I also want the Middle East to revert to its earlier glory when we were the leaders in the fields of science and technology.

Also, improving the standard of education in the country has been an important factor for us. We recognise the inquisitiveness and ambitions of fresh school graduates and strive hard to provide them with our expertise and resources.

When students come back and ask us for another service, it is a proof that we have provided them with the best service to begin with. It is very important to us that they do well and we also help them with finding jobs and counsel them.

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What is most innovative about your approach?

Our continuous link with our students and repeat business through them is one of our notable achievements. Most agencies do not even see the students after their initial contacts, whilst we see them after every holiday and sometimes daily prior to leaving.

The online registration and uploading of documents is one of the most innovative aspects of businesses like ours. Also as part of our Corporate Social Responsibility (CSR) we invest half of our profits into scholarships and help schools that work for special needs students. We really value our students and realise that we wouldn’t have been where we are, if not for them.

We work with a customer-focused, professional management philosophy with clearly defined deliverables and commitments. The academic services division of EZone is a recognised entity by itself, which deals with international universities and is recognised by all the ministries in the GCC. We cater to all categories of students – primary, middle and high school.

Also, I am very active on Twitter, and have a blog and a Facebook page that has my students on it. We also have a company page on Facebook, Twitter and video channel on YouTube. We use social media extensively as it keeps us close to our target market. Also we publish an annual

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

In a nutshell Name: Suad Alhalwachi Designation: CEO Company: Education Zone Industry: Educational consultancy Date it was founded: March 2003 Number of employees: Under 25 Location: Dubai, UAE Website: www.ezone.ae

book on education abroad, called World of Education.

What are the services provided by Education Zone?

EZone provides academic services to schools in the UAE and the rest of the Gulf area.

We partner with these schools to help their students attend the best universities in the world.

Also these schools invite us to their annual career fairs to meet their students and answer their queries. We act as international education consultants to our student clients, helping them to make the right choices in terms of country, course and institution. We work closely with our universities and have exclusive marketing rights with most of them.

We support the universities with international curriculum, international books, setting up international exchange programmes and credit transfer

BUSINESS PIN UP

EDUCATION ZONE

Performance appraisals are done bi-annually.

We also provide them with continuous training in student enrollments processes, and one day a week we encourage them to do something that is not their regular work, but benefits the business in one way or another

EZone provides academic services to schools in the UAE and the rest of the Gulf area. We partner with these schools to help their students attend the best universities in the world.

What are your near future plans?

We intend to expand in the coming years and set up some franchises across the region. We are currently working on establishing schools, sale of schools, and the franchising of international schools within the UAE and the rest of the Gulf. In terms of franchising we look for well established international schools with a high rank on the league table. We have a portfolio of investors who are interested in investing in these initiatives.

We would like to have a branch in every city of the UAE as well as expand in other Gulf states. The ten year plan is to start a business school and an art school. I think we lack in these two fields. Also, I believe that the art in our children is stunted by the education system. So our art school will be a real eye opener.

Suad Alhalwachi (second from left) with her team

programmes. We also offer languages, work and study, and summer camps.

Summer camps for ages 6 - 21 are also a speciality of ours. We can cater for all ages and provide chaperones to travel with the students. We can also provide any type of camps, such as sports, languages, etiquette, leadership training for young global leaders and so on.

EZone also provides corporate training and courses for our corporate clients in any country in the world. We offer two magazines on education in New Zealand and

Canada. We have also bought the rights for the Dental Tribune Middle East & Africa (DTME), which is part of the global Dental Tribune International and reaches more than 600,000 dentists worldwide in more than 95 countries.

What are the main features of your HR policies and training for staff?

We keep our staff motivated by regular increments on salaries, proper motivational gestures (lunches and gifts) and training in the fields that are relevant to the jobs.

What are the challenges faced by your business and what have your solutions been?

Too much competition is the main challenge, but our basket of services put us ahead of others. We cover all the requirements for the students to go abroad and settle including opening a bank account. The other challenge is finance. We are always short of capital since the fees for our services are kept relatively low. We are putting together a plan for investors to join our board and become active in the business, so let’s see where this takes us.

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INDUSTRY WATCH REAL ESTATE

NORTHERN STIMULUS

Quick stats Lease Rates

H1 10

H2 10

Residential Office

According to a report by commercial real estate services firm CB Richard Ellis (CBRE) the real estate market in the UAE continues to face a host of challenges amidst a weakened economic and investment environment. However, in a bid to stimulate activity and improve overall living conditions in the Northern Emirates, the UAE Government has committed significant new funds towards the development of key infrastructure projects.

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n recent years, power shortages have become increasingly problematic, as an expanding population has seemingly outgrown the capabilities of the existing infrastructure.

The allocation of AED 5.7 billion over the next five years will go some way to alleviating persistent problems, with the majority of investment focussed on increasing the production capacity of electricity and water facilities.

Road and other transport projects are also to see further investment with a number of major road infrastructure works already underway. This includes expansion and improvement works on the Emirates Road and development of the ZorahAl Helio Road.

The number of business licenses registered in the RAK Free Trade Zone between quarter one, 2010 and quarter one, 2011 recorded a 17% growth, whilst the number of license renewals during the same period increased by 37%.

The Sharjah government continues to revitalise its economy with a number of investment initiatives aimed at boosting non-oil revenues.

According to the Sharjah Economic Development Department (SEDD), the number of new and renewed licences issued in the Emirates during 2010 grew by 7.1% and a similar improvement is hoped for during 2011.

The Sharjah Investment and Development Authority (Shurooq) are charged with developing the Emirate’s tourism and investment markets

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Apartment lease rates - (H1, 2011) 50,000

13% 0%

40,000

Al Majaz will be one of the first masterplanned projects to complete in the Emirate and is likely to prove popular with residents looking for a true community development.

-13%

30,000

-26% 20,000

-39%

10,000

-52%

0

-65% Sharjah

1BR

Ajman

2BR

3BR

Umm Al Quwain

Ras Al Kaimah

% change y.o.y

Fujairah

% change from peak

through real estate projects such Al Majaz, a mixed-use scheme which is to see handovers from the second half of the year.

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

Residential sector Deflationary pressures persist for poor quality residential products, particularly those further impacted by inferior location. As more residential units enter the market, the importance of providing adequate facilities and amenities has become increasingly clear, and a major consideration in judging the overall appeal of

INDUSTRY WATCH REAL ESTATE

A quiet second half is anticipated for 2011, with rental rates likely to suffer as result. With significant new residential supply approaching completion a further increase in vacancy levels should be expected over the next six months. real estate offerings for both end-users and investors. This is negatively impacting older stock, which typically lacks the same level of specifications and conveniences available in newer comparable property.

The relative affordability of residential accommodation in Dubai continues to impact the Northern Emirates market. A sustained migration of residents to Dubai has continued during H1, 2011, with an increased inventory in the districts of Al Nahda, Ghusais and Muhaisanah.

As competition intensifies many landlords in Sharjah have started to include parking and chiller charges within their quoted lease rates.

In some cases, agent commissions on initial lettings are also being ignored. With further new residential supply in the pipeline the market is expected to correct further, particularly in less desirable locations, whilst ongoing infrastructure works may also have a negative impact in the interim period.

On average, lease rates across the Northern Emirates have now dropped by 18% year-onyear. The worst affected area was Ajman where rents have fallen by 28% as a result of significant new supply and ongoing infrastructure issues.

This was followed by Umm Al Quwain which registered a 22% decline. Rents fell 21% and 15% in Sharjah and Ras Al Khaimah respectively during the same period.

Rental rates in masterplanned and gated community developments are currently outperforming the wider market with significant premiums being achieved. The highest lease rates in Ras Al Khaimah were noted in The Cove project where a one bedroom chalet is currently offered in the range of AED 45,000 – 55,000 per annum, inclusive of access to the facilities and amenities at the Cove Rotana. Lease rates in the developments of Al Hamra Village and Mina Al Arab are also faring comparatively well, with a four bedroom villa ranging from AED 90,000 – AED 120,000 per annum.

In Ajman, freehold projects that were launched during the market peak have eventually started to see handovers achieved.

Jasmine Towers (Garden City) is one such development. Further supply of new units is expected from the Garden City project wherein the Almond and Mandarin phases are currently in various stages of construction and anticipated to complete during the next six to eighteen months.

Residential units at Julphar Towers in Ras Al Khaimah, which offers 349 residential units, has seen the start of the handover process to investors. The landmark tower project is located prominently on the corniche and is likely to attract significant interest from occupiers.

Other projects in the pipeline which are expected to enter the market in next six to twelve months, include Bab Al Bahr (Marjan Island), Phase One of Yasmin Village and further phases of the Mina Al Arab project.

Office sector Lease rates across the Northern Emirates are showing signs of greater homogeny as supply continues to exceed demand. Availability of office space within the Free Zone’s (with the exception of Umm Al Quwain) continues to encourage international occupiers who are seeking to benefit from the incentives offered by the Free Zone authorities.

The on-shore office market remains under considerable pressure with rising vacancy rates a universal problem. The utilisation of residential accommodation for commercial purposes is also adding further strain to dedicated office spaces located outside the Free Zones.

Office lease rates in Sharjah have slipped 22% over just a six month period. Average lease rates in H2, 2010 were in the range of AED 430 - 860/ sqm/annum, but have now fallen to AED 300 700/sqm/annum. Lease rates across the Northern Emirates currently range from AED 240 -700/

sqm/annum with the lower pricing for residential conversions. Dedicated office accommodation continues to hold a significant premium.

An increasing inventory of new towers has started to affect tenant loyalty, with increased occupier movement away from ageing buildings that lack sufficient amenities and facilities.Prime properties set to enter the market over the next 12 months include the Al Ghanem Business Centre Tower which is located in the Al Majaz area. The property should achieve handover within the next few months and is quoting lease rates from AED 590-700/sqm per annum inclusive of service charge.

Outlook Despite widespread market negativity many investors are breathing a collective sigh of relief with a number of developments now handed over. Increased construction activity is taking place on projects along the Emirates Road and for developments in the City Centre, Ajman including Ajman One, Ajman Pearl and the remaining components of the Garden City development.

However, the slow pace of development work and extended handover dates are likely to have a telling and lasting impact on investor confidence.

A quiet second half is anticipated for 2011, with rental rates likely to suffer as result. With significant new residential supply approaching completion a further increase in vacancy levels should be expected over the next six months.

The Northern Emirates office market will feel mounting stress for the remainder of the year as new office supply, existing vacant spaces and increased landlord competition further exacerbates lease rates.

About CB Richard Ellis Group, Inc., is a Fortune 500 and S&P 500 company headquartered in Los Angeles.

The Company has approximately 29,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. For more information visit: www.cbre.com.

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INDUSTRY WATCH

EMPLOYMENT OPPORTUNITIES

PROMISING FUTURE The latest research from Bayt.com and YouGovSiraj has revealed that over 50% UAE employers are planning to hire in the last quarter of 2011.

Employers stated that engineering graduates or postgraduates stand the best chance from those that are likely to be hired.

According to the study, 25% of organisations around the MENA favour employing staff that are qualified in this field.

A

ccording to the latest quarterly survey conducted by job site Bayt.com, in conjunction with research group YouGovSiraj, over half of the employers in the Middle East and North Africa (MENA) region plan to hire new employees over the next three months.

Of these, 26% said they would probably be recruiting, while 28% said that their organisations would definitely be recruiting in the next few months. In the UAE, 53% of respondents expect to recruit in the next quarter.

The Jobs Index survey is conducted to gauge perceptions of job availability and hiring, to identify job trends and to provide an understanding of the key skill sets and qualifications required in the MENA region job market. Overall, employers in Saudi Arabia (KSA) and Qatar seemed slightly more likely

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to hire than others, with 33% and 31% respectively saying that their organisations will definitely be recruiting new staff in the next quarter.

When respondents were asked how many job positions their organisations would fill in the next three months, 45% said that less than five jobs would be available, while 23% said that between six and ten jobs would be available in the coming quarter.

“The level of regional hiring activity remains relatively encouraging given the regional economic backdrop. However, it is clear that in some parts of the region companies seem to be favouring a climate of cautious cost-consciousness, specifically in terms of HR growth. This continues to favour hiring activity on Bayt.com as evidenced by our latest job counts,” said Amer Zureikat, VP Sales, Bayt.com.

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

What are the firms looking for?

Furthermore, graduates or postgraduates in business management and commerce are equally sought after by the region’s organisations, with 23% and 22% of respondents citing that recruits in these fields are greatly required. The trend continues as organisations claim to be more on the lookout for people to fill in lower executive positions like junior executive (37%) and executive (29%).

Being able to communicate in both English and Arabic is considered a desirable trait that employers look for when selecting new staff according to the study. Over 59% of the respondents agreed this is what they look for most in a potential new employee.

Being a cooperative, flexible and helpful

INDUSTRY WATCH

EMPLOYMENT OPPORTUNITIES

Being able to communicate in both English and Arabic is considered a desirable trait that employers look for when selecting new staff according to the study. Over 59% of the respondents agreed this is what they look for most in a potential new employee. team player is also a clear priority for the region’s organisations; as 48% stated it being as a necessary characteristic.

Overall personality and demeanour was also cited as an appreciated attribute by 44% of the survey’s respondents and 41% claimed that being trustworthy and honest are extremely essential qualities as well.

Sundip Chahal, CEO, YouGovSiraj, commented, “When recruiting, the region’s organisations place much more emphasis on key skills such as fluency in the

first language of the region, in addition to teamwork, personality, loyalty and honesty.

By looking at the figures, it’s evident that employers will not instantly choose a candidate based on qualifications alone.”

Country-wise scenario Furthermore, the Job Index is gauged by asking the respondents what their hiring expectancy is in a year’s time, which develops the Hiring Expectancy Index (HEI). Suggesting widespread optimism for the future, 67% of the MENA region’s organisations expect to hire in the long term.

Job seekers in KSA are likely to be the luckiest at finding work in a year’s time, with 36% of the country respondents stating they will definitely be hiring in 12 months’ time.

In the UAE, only 3% said they will not be employing in a year’s time, while 28% said they would absolutely hire in a year.

Additionally, respondents in Algeria were also highly confident that their organisations will be hiring in the future; 33% said they would certainly recruit in a year’s time.

“When recruiting, the region’s organisations place much more emphasis on key skills such as fluency in the first language of the region, in addition to teamwork, personality, loyalty and honesty.

By looking at the figures, it’s evident that employers will not instantly choose a candidate based on qualifications alone.”

- Sundip Chahal, CEO, YouGovSiraj

However, the lowest figures among all of the surveyed countries in terms of propensity to recruit in a year’s time were shown in Morocco at 22% and in Bahrain at 19%.

Moreover, when asked to rate their current country of residence as an attractive job market compared to those across the region, respondents in the UAE, followed by Qatar were the most optimistic about their country – 44% and 43% respectively said their country of residence was the most attractive job market in the region.

In KSA, 42% said their country was much more attractive. The respondents were also asked to name which industries they feel are attracting or retaining top talent in their country of residence today.

Telecommunications (35%) took the lead followed by banking and finance (34%) and construction (32%).

Conclusion Zureikat concluded, “The Bayt.com Jobs Index has been designed to demonstrate how the region’s job market changes every quarter.

It allows the region’s employers and other industry stakeholders to benefit from current job market figures, which can be used for driving positive organisational change.”

Data for the July 2011 Jobs Index was collected online between 11th July and 9th August 2011, with 4,560 respondents from the UAE, KSA, Qatar, Oman, Kuwait, Bahrain, Syria, Jordan, Lebanon, Egypt, Morocco, Tunisia and Algeria. Males and females aged over 18 years old, of all nationalities, were included in the survey.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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SME ABOUT TOWN

RAMADAN GOODS PRICES

REDUCED COSTS FOR THE HOLY MONTH The UAE Ministry of Economy’s Consumer Protection Department conducted a field visit in August to the Union Co-operative in Al Barsha to verify the outlet’s compliance with the prices and sales terms.

D

r Hashem Al Nuaimi, Director of Customer Protection Department and his team conducted the inspection to monitor the prices of foodstuffs. The team checked whether the prices were fair and adhering to the Ministry standards and found that prices were maintained at stable levels.

Dr. Hashem said that prices of many commodities have decreased by about 20% compared with last year and expressed satisfaction on the availability of essential goods.

He praised the efforts made to reduce the prices of some basic commodities and said that it comes in line with the directives of the Ministry of Economy to reduce prices and ensure market stability during the Holy Month of Ramadan. The society is currently conducting necessary studies to widen the scope of this drive covering a large number of essential food.

According to the Ministry, prices have been fixed for 29 items during the Ramadan period.

In addition to these lower-priced goods, there were an additional 157 products from the supermarket’s own Union brand that were being sold at reduced prices during the Holy Month.

Some of the lower-priced goods included a litre of water, which was priced at AED 1.50 before Ramadan and was reduced to AED 0.90, a 710ml bottle of Vimto cordial was reduced from AED 7.50 to AED 4.95 and Californian Chick Peas was cut from AED 9.80 to AED 7.40.

The price of a bag of basmati rice was reduced from AED 145 to AED 75 and

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Australian beef was slashed to AED 29 from AED 42. Visits to different markets in the country have also been planned.

“The UAE Ministry of Economy is committed to supervising the consumer markets during Ramadan and will act quickly and decisively to ensure that all outlets adhere to the Federal Consumer Protection Law. We will not show any leniency to price manipulators or traders undertaking monopoly practices,” said Dr. Al Nuaimi.

“Our specialist teams will intensify their visits to monitor sales outlets across the Emirates in keeping with the Ministry’s priority to ensure consumer protection during the Holy Month,” he added. The department’s main concern is hypermarkets and groceries that sell items for double the price. This practice is illegal and we want to

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

stop it. Smaller groceries are often found violating the rules,” he said.

The Ministry of Economy started this initiative in March 2011 to combat prices of everyday staples in the UAE.The Union Cooperative Society, in cooperation with the UAE Ministry of Economy, launched the first phase of a campaign to curb food price rises through subsidising premium varieties of rice and Arabic bread.

The subsidy will be for Sinara and Itihad brands of rice and bread, respectively, from April 1st and will last throughout the year. As per the new move, the rice and bread will be sold at the Union Cooperative Society outlets at 2004 prices.

The Ministry, he added, welcomes feedback and suggestions from the public and business community to sustain market best practices.

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SME SPEAK

INNOVATION SURVEY 2011

SURVIVAL INSTINCT In order to understand how innovation takes place in business, SME Advisor Middle East, in conjunction with Tickbox Surveys Middle East, conducted a survey of its readers. The aim of these monthly surveys is to provide a snapshot of the current practices in the market.

I

n the era of globalisation SMEs face competition not only from domestic firms but also global players. Therefore, they need to have products that deliver greater quality and processes to ensure superior productivity and competitiveness.

To achieve this SMEs need to either invest in developing new products and processes or risk the possibility of having to shut down.

Although globalisation requires that SMEs pay greater attention to innovation in reality it is not always possible. They tend to have various constraints that restrict their access to innovation, such as appropriate or sufficient human capital, financial resources and so on.

Even for the SMEs that may have access to such valuable resources they tend to be preoccupied with firefighting day-to-day issues. Although pure innovation, which generates substantial economic benefit, may not be possible for the vast majority of SMEs, they can, however, carry out incremental innovation. This is where an SME makes small and continuous changes to its products and processes, so as to gain competitiveness and productivity.

due to a flatter management structure and size and have the ability to learn from larger firms and adapt in order to survive. Larger firms, of course, have the ability to recruit and retain a highly qualified technical team, obtain finance and are able to invest in long term R&D projects.

The success of innovation, regardless of the size of the firm, is whether it has the buy in from the top management or owner. If such a buy in takes place then innovation will be firmly embedded in the business plan of a firm and become an organisational priority.

The SME Innovation Survey found that 72% of firms had innovation as one of their top three priorities. A further 11% of SMEs stated that innovation was the most important organisational priority.

Only 17% of the SMEs did not see it as valuable and they tended to be in the trading sector. In many respects this is expected as

Where does innovation rank amog your company’s strategic priorities Not a priority 17%

Innovation as a strategic priority SMEs have certain advantages over larger firms in that their smaller size makes them more flexible and faster at decision-making,

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SME ADVISOR MIDDLE EAST SEPTEMBER 2011

The most important priority 11%

Among the top 3 priorities 72%

trading firms have very little control, if any, over the final product. The companies that saw innovation as one of their top three priorities tended to be in the services sector, while those who viewed it as the most important priority were in the manufacturing sector.

Innovation activity Statistics throughout the globe show that firms have the highest rate of mortality in the first three years of their life. One of the most commonly cited reason for SME failure is the lack of sufficient financing, as in most cases, they are required to fulfill the same conditions as larger firms leading to a biased selection process. The lack of finance usually implies that SMEs tend to place innovation at the bottom of their list while they deal with

How will your company’s effort on innovation this year compare with last year’s?

Stay the same 22%

Increase significantly (>10%) 45%

Increase slightly (1%-10%) 33%

more pressing matters. The SME Innovation survey sought to understand the impact of finance on innovation.

The results from the survey show that three quarters of the firms in the sample who view innovation to be an important organisational objective intend to increase their spending this year compared to last year. In fact, 45% of the SMEs in the sample intend to increase their spending on

SME SPEAK

INNOVATION SURVEY 2011

SMEs certainly view innovation to be an important organisational priority, especially as far as the manufacturing and services sectors are concerned. They are not only including innovation as a part of their strategic priorities but are also devoting greater financial resources to it. innovation by more than 10%. The survey did not find any firm that was looking to reduce their spending. This adds to the belief that SMEs are looking towards innovation in order to create long term sustainability of their business.

cost reductions. The SME Innovation Survey indicates that innovation has a very domestic bias and is not centred towards exports. Also, cost reductions are difficult to achieve through innovation and may be determined by other factors.

Goals and outcomes of innovation The SME Innovation survey found that the most common goal of innovation was to become more competitive as well as to gain greater specialisation. In fact, these two reasons account for 58% of all the responses.

Cost reduction was also important with 18% of firms stating it as the desired goal.

Contributory factors to innovation The success of SMEs in achieving their innovation goals can be quite broad, from strategic alliances to government support.

Also each category, such as strategic alliances, has sub-groups, which include technology development alliances and which are designed to transfer knowledge from universities or research centres to firms, so that they can incorporate it into their products or processes and commercialisation agreements, whereby universities or research centres transfer their knowledge from firms to commercialise it; and finance agreements which provide funding in return for a share of the profits.

The most important contributory factor for innovation was the need to exploit market opportunities. In other words, survival and opportunity were the engine of SME innovation. Also, private sector initiatives such as networking sessions and information events were considered to be extremely important in transferring knowledge to SMEs. The survey found that SMEs rarely received any financial support from either private or government sector organisations in order to innovate. Similarly, there existed very few cases of linkages between universities and SMEs. In fact, the survey felt that this is one area that should be developed, as it allows universities to gain market exposure for their research and for SMEs to commercialise products without the need to invest in expensive R&D. By and large the respondents did not feel that there was an innovation friendly environment.

What are the goals of innovation in your company?

35% 30% 25% 20% 15% 10% 5% 0%

Competitive advantage

Quality advantage

Specialisation

Diversification

Cost reduction

Finally, 12% of the respondents stated quality advantage and diversification were their primary goals. The survey sought to match the goals of innovation with the outcomes to date. It appears from the survey that the most common outcome is an expansion in market share. This outcome is consistent with the goal of gaining competitive advantage and to some extent, specialisation.

The second most common outcome was an improvement in service followed by quality.

It appears that, although quality improvement is the fourth common objective, it is the one that SMEs are more likely to achieve. The least common outcome was an increase in exports as a result of innovation, followed by

Innovation performance In general the SMEs in the sample felt that their performance was comparable to the leading competitors in the industry. A little over half the sample felt that their innovation performance was better than the leading companies in the sector. Of these, 22% felt that their innovation performance was significantly better than the leading companies in the sector.

This pool of the sample stated that innovation was either the most important or the top three priories in their organisation and they sought to increase their funding activity by over 10% this year. Only 11% of the sample felt that they were slightly lagging the leading companies in the industry.

Conclusion It appears from the SME Innovation Survey that SMEs certainly view innovation to be an important organisational priority, especially as far as the manufacturing and services sectors are concerned. SMEs are not only including innovation as a part of their strategic priorities but are also devoting greater financial resources to it.

The survey found that gaining competitive advantage and specialisation were the main motives behind innovation activities. By and large SMEs are achieving greater competitive advantage and specialisation as a result of innovation. However, it appears that the innovation activities have a domestic focus and have not really helped the firms increase their exports. It appears that the vast bulk of innovation activity is carried out in an ad hoc manner through the need to survive or exploit market opportunities.

Furthermore, it appears that private sector initiatives, such as networking sessions and information events, are extremely important in transferring knowledge. SMEs would like to see a more innovation friendly environment with greater government support and more formal linkages with universities and research centres.

The lack of alliances between universities and SMEs is a wasted opportunity that can bring research into the marketplace and allow SMEs to exploit a talent pool (through university staff) with incurring vast costs.

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

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A DAY IN THE LIFE OF...

CO-SIGN WORLD

Adetokunboh Adeniyi is the Vice President of Co-Sign, an independent record label and talent agency based in Dubai. This company is home to some of the region’s most famous artists, such as Emarati hip-hop duo Desert Heat, Arabic hip-hop artist Malikah and international female MC JJ.

EVERYTHING URBAN

At a time when many are looking to switch industries or try something different, we bring you first person accounts of the lives of entrepreneurs or senior executives, outlining a typical day in their business. Who knows, maybe the perfect idea is waiting for you. Read on and get inspired.

I’m working late into the night, listening to the latest mix of Miyah’s single being prepped for release next month. The tracks sound good to me, but the sound engineer is not convinced. I’ve learned to never argue with him; the man is a genius.

Off to the first meeting of the day with a radio station. The boys at the radio are impressed by the video and song sample I have brought them but I’m not thrilled by their offer not to include it in rotation just yet. They promise to do more, I promise to take it to the next radio station.

I reply to emails and go through some of the demos sent to us – one sounds very promising. Then I move on to reading proposals and decide which ones are worth replying to.

Lunch time – its’ my favourite part of the day.

It’s time to meet up with my business partners and order some food.

12:30 am

1:00 am

As I am about to step into 3:15 am the elevator in my building, phone rings and +1 means I have to take it.

Poor service in the elevator, so I sit back in the lobby and talk to the New York Office until they can hear me yawning answering every question with a “okay no problem”. That’s a sign that I’m barely awake. It’s time for bed!

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9:00 am

1:00 pm

I look through my agenda – I still have four more meetings to attend, with one pending.

2:30 pm

One meeting down and three to go! Everyday around this time my battery starts to run dangerously low and I can never seem to find the car charger.

4:00 pm

SME ADVISOR MIDDLE EAST SEPTEMBER 2011

I head back to the studio to work on some tracks with the sounds engineer. While the track blasts in the background, I run through the company Website to do some quick updates and edits.

6:00 pm

A pending meeting is confirmed in Al Ain. I fill up the car, stock up on Red Bull and off we go!

8:00 pm

I make my way back to Dubai, with the radio blasting, and me singing along to every lyric!

10:00 pm

I’m back in the studio; next track, next artist! It’s going to be a long night!

12:00 midnight

SEPTEMBER 2011 SME ADVISOR MIDDLE EAST

67

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