Intelligent SME latest issue 35 (December 2016)

ISSUE: 35 | December 2016 facebook.com/theintelligentsme @intelligentsme

Give your brand an unfair advantage

AUGMENTING SMES: An Interview with Peter Aziz

BUILDING RELATIONSHIPS: An Interview with Bilal Sabouni

DECIPHERING THE NEW UAE BANKRUPTCY LAW Strategic Alliance Partner

Corporate Banking Partner

Sole Automotive Partner

Insurance Partner

Print Partner

December 2016

Intelligent SME

THINK TANK

EDITORIAL THINK TANK & ADVISORS Ajay Bindroo, CEO & Managing Partner, Clasico Brands Within a span of 18 months, Ajay has established a global venture that caters to consumer goods ranging from beauty and personal care, grooming products to oral care, bath and hygiene, hair care and homecare products. Under the flagship of “CLÁSICO BRANDS”, over a dozen brands have been created and are in the process of being launched worldwide. Ajay is a true visionary and makes sure that the company's concept and strategies are right on track.

Akram Miknas, Chairman & Founder, PROMOSEVEN HOLDINGS B.S.C.C. (P7H) Akram Miknas is known to be one of the pillars of modern marketing communications in the Middle East. His involvement in real estate development, especially after the successful completion of the Pearl Towers (Abraj Al Lulu), anchored him as a leading accomplished developer in the Gulf. In early 2000, he branched into the hospitality business and successfully managed and built several hotels and outlets in Bahrain. His success in this business was crowned by becoming the franchisee of McDonald’s in Lebanon; where he built the business from seven to 26 restaurants in just five years.

Alexandar Williams, Director, Business Development, Department of Economic Development (DED) Alexandar Mathew Williams is presently the Director, Business Development, Department of Economic Development (DED), Government of Dubai. He has more than 20 years of experience in SME development and business creation. He is interested in the life cycle dynamics of firm growth and mentoring entrepreneurs.

In his current job, Alexander is responsible for developing new initiatives for DED to take it to the next level as a knowledge-driven economic development agency.

Deepak J Babani, CEO, Eros Group Deepak J Babani has been with Eros Group for over 30 years. Mr. Babani has spearheaded the growth of Eros Group from a turnover of Dhs six million in 1981 to over Dhs four Billion in 2010. Under his leadership, Eros Group has established itself as the leading distributor for Consumer Electronics, Home Appliances, Telecom, IT and Air-conditioning products in the UAE, GCC and East African regions. Mr. Babani joined Eros as Marketing Manager and was promoted to General Manager in 1988 and subsequently to CEO in 2002. and subsequently to CEO in 2002.

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December 2016

Intelligent SME

THINK TANK

EDITORIAL THINK TANK & ADVISORS K. Rajaram, CEO, Al Nabooda Automobiles K. Rajaram has more than three decades of experience in the automotive industry, starting his career in Oman in 1983. He moved to the UAE in 1996 to lead Al Nabooda Automobiles, the exclusive dealer of Audi, Porsche and Volkswagen in Dubai and the Northern Emirates. Under his leadership, Al Nabooda Automobiles has changed the face of the UAE automotive market by setting the highest benchmarks in customer service and pioneering the automobile ownership experience.

Mishal Kanoo, Deputy Chairman, The Kanoo Group Mishal Kanoo serves as the Deputy Chairman of The Kanoo Group, one of the largest, independent and longest running family-owned group of companies in the Gulf region. He is also one of the most iconic business figures in the Middle East, featured on various magazines and listed in the ‘Top 100 Powerful Arabs 2013’, and ‘The 15 Wealthiest Arab Businessmen in the World 2012’, among others.

Subsequently, he worked at Arthur Andersen in Dubai as an auditor before taking up his current position in 1997. Mishal Kanoo adheres to family values and ideals in pursuit for quality and excellence which has greatly influenced his corporate policies and goals for ‘The Kanoo Group’ as a reputable company.

Rizwan Sajan, Founder & Chairman, Danube Group The Danube Group was founded and established by Mr. Rizwan Sajan in 1993. Over the last 22 years, the group has come a long way since its humble beginnings of a small trading shop in Deira to being the region’s leader in construction, building materials, home interiors and shop fitting industries. The head office & logistics facilities are present at the Jebel Ali Free Zone (JAFZA). Danube has coursed a path that transformed only one shop with three employees to over 40 locations in nine countries worldwide including UAE, Oman, Bahrain, Saudi Arabia, Qatar, Africa and India, in addition to procurement offices in China with employee strength of over 2,200 people. Being a top ranking business icon, Mr. Rizwan Sajan has been a source of inspiration for driving Danube’s business by leaps and bounds.

Reg Athwal, Founding Partner & MD, RTS Global Partners Reg Athwal is the Chairman of RAW Group and the Founding Partner & MD of RTS Global Partners, the leading family business advisory firm in Africa, Middle East and Asia. The company has been supporting hundreds of clients in over 150 disciplines spread across 57 countries with offices in Dubai, UAE and Nairobi, Kenya. Reg’s vision is to grow into a major company of 1000 members in 22 countries by the year 2022 with the primary aim of transforming 22,000+ family businesses and impacting millions on the way.

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CONTENTS 30

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UAE-US Relationship Envisioning a Better Tomorrow

An immensely positive and informative interview with Bilal Sabouni, CEO of American Business Council (ABC) of Dubai & Northern Emirates, where he opens up about UAE-US relationship, the benefits of working together, and how ABC’s role is crucial to the entire process.

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Globalism vs. Tribalism – Reshaping Reality

Akram Miknas on how separatist and bigoted politics is destroying global economy and why the politics of ignorance should stop.

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Empowering UAE’s SME Community

The emergence of SMEs in the UAE and how does Zawdeh plan to boost the entrepreneurial community. A candid interview with Peter Aziz, Co-founder and Marketing Manager of Zawdeh.

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CONTENTS 34

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In Focus: The UAE Bankruptcy Law

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The new UAE bankruptcy law has created quite a stir in the local and global business arena. This article attempts to deconstruct the complexities of the law and help the SMEs and entrepreneurs decode the new provisions – an ISME feature.

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Risk Management for Successful SMEs

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Financial risks exist everywhere; it cannot be avoided and has a certain influence on a company’s production and management.

In this article, Simon Hodges talks about the steps an SME needs to survive and put forward effective prevention and control measures to lower the possibility of risks and ensure development.

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Fintech and Peer-to-Peer Lending Opportunities in the UAE

The emergence of peer-to-peer lending in the UAE has opened up exciting and new investment opportunities for income-seeking entrepreneurs from the region. Craig Moore, CEO of Beehive explains further.

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The Rise of the Affordable Housing Sector

From introducing affordable homes to the road ahead: Rizwan Sajan and Danube Group takes on the housing market in the UAE.

Uncovering Online Brand Communities

Several brands have been stepping up to engage consumers and build online communities to showcase innovation and increase revenues and customer loyalty.

Marimar Portilla and Dr. Rodrigo Perez-Vega unearth the motivation behind them and how online brand communities can shake things up.

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Financing & Funding - Facing SME Challenges

Sandi Saksena sheds light on some of the challenges faced by SMEs and entrepreneurs in the UAE and how you can be prepared for them.

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The Life-Changing Power of Daily Questions Dr. Marshall Goldsmith outlines the importance of simple, fundamental questions that have the power to transform the objective and purpose of an individual.

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Expert Contributors: Akram Miknas Craig Moore Dr. Marshall Goldsmith Dr. Rodrigo Perez-Vega Marimar Portilla Rizwan Sajan Sandi Saksena Simon Hodges

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December 2016

Intelligent SME

PUBLISHER'S NOTE

Publisher's Note 2016 has been a year of slow economic growth with a continued decline in oil prices and a widening fiscal deficit in the region contributing to the rising pessimism among the residents of the region. The International Monetary Fund (IMF) has projected the UAE economy to grow at an average of 2.5% between 2016 and 2018. However, economic diversification and the enthusiasm surrounding the Expo 2020 have helped Dubai overcome the oil price rout.

The business community of Dubai has, lately, been in a positive mood with the UAE Bankruptcy Law likely to be effective from early next year. The news has restored the business confidence in the region and is a sign of the UAE catching up with the developed economies around the world. The feature story of this month’s Intelligent SME is a step towards understanding the Bankruptcy Law and its effect on the UAE companies and traders.

“Entrepreneurship is not a part-time job, and it’s not even a full-time job. It’s a lifestyle.”

– Carrie Layne.

A lifestyle rife with struggles, challenges, self-doubts, fear of failure, success and the circle goes on. But one can never afford to be still, to stop, for the day you stop; you lose even the slightest chance to achieve your dreams and your aspirations.

It has been five years since our first Intelligent SME magazine; the first one to predict the growth and importance of an SME in the UAE market. Since then, the magazine has strived to address the continual challenges that an SME faces in a constantly evolving society. It has never stopped for it believes in an entrepreneur’s dreams and aspirations; and with such rapid changes in the socio-economic-geographical environment, the responsibility only increases.

The December edition of Intelligent SME carries articles ranging from finance to politics, and risk management to life philosophy. It has two interviews; both of them are SME enablers, they believe in creating a better tomorrow for the SMEs, they are symbiotic, they work towards enriching the UAE community; they are committed to building a successful ecosystem; just different approaches.

Approach ideas; approach people; approach one’s dreams with a renewed sense of conviction and passion. Let that be our New Year resolution.

Happy Reading!

Shantanu Phansalkar, CEO & Publisher

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December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

ENEC and KEPCO Announce Financial Close for Barakah Nuclear Energy Plant

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he Emirates Nuclear Energy Corporation (ENEC) and the Korea Electric Power Corporation (KEPCO) announced today the formal financial close for the financing of the Barakah Nuclear Energy Plant project. The fund will be managed by the recently created subsidiary, Barakah One PJSC (Barakah One), of which KEPCO owns an 18 percent stake.

The total amount of financing to be managed by Barakah One is estimated at US$ 24.4 billion, composed of direct loan agreements of about US$ 19.6 billion as well as a total of US$ 4.7 billion in equity commitments. The equity commitments are provided by ENEC and KEPCO as part of the recently announced Joint Venture Agreement.

The direct loan agreements that Barakah One has entered into are: • Direct loan of the Export-Import Bank of Korea (KEXIM) of US$ 2.5 billion • A total of US$ 250 million of loan agreements with local and international commercial banks. These are: National Bank

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of Abu Dhabi, First Gulf Bank, HSBC and Standard Chartered.

• Direct loan from the Department of Finance of Abu Dhabi of up to US$ 16.2 billion The direct loan agreements include the overnight cost of the Prime Contract for the construction and commissioning of the Barakah Nuclear Energy Plant, interest during construction and the cost of initial nuclear fuel. They also include allowances for potential inflationary increases in the price of commodities, such as construction materials, during the period of construction.

“With the creation of this financial framework, ENEC will be able to provide safe, reliable electricity to the UAE grid through a commercially viable and cost-competitive program.”

Said H.E. Khaldoon Khalifa Al Mubarak, Chairman of the Board of Directors of ENEC. “This financial structure reflects the world-class quality of the program, and its credibility in the international community.

“The project is an investment in the nation’s energy future as well as an engine of growth for the UAE economy, already generating hundreds of jobs for talented UAE nationals

December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

through the creation of parallel industries that will participate in the nuclear energy sector,” H.E. Khaldoon Al Mubarak added.

“From the beginning, the peaceful nuclear energy program in the UAE has had the full support of the Abu Dhabi Government. Now, the Department of Finance, is honored and proud to be a direct supporter of the project which will bring clean and reliable nuclear energy to the UAE grid and promote the economic growth of our country and the development of our society for decades to come,” said H.E. Riyad Al Mubarak, Chairman of the Abu Dhabi Department of Finance.

“The government of the Republic of Korea is pleased to be the long-term strategic partner for the UAE Peaceful Nuclear Energy Program. We will continue to support KEPCO in its international projects and it is our priority to ensure the success of the Barakah Nuclear Energy Plant. We are proud to be a supporter of this world-leading safe, reliable and costefficient peaceful nuclear project,” said Mr. Joo Hyunghwan, Minister of Trade, Industry and Energy of the Republic of Korea.

“We believe that providing funding for Barakah One through a direct loan will further enhance the level of partnership between Korea and the United Arab Emirates. We are pleased to be contributing to the UAE’s peaceful nuclear energy program and look forward to supporting the project

www.raalc.ae

at Barakah. Our experience with major projects around the world provides us with unique insight and capabilities, all of which will be employed to ensure the success of the Barakah Nuclear Energy Plant,” said Lee Duk-Hoon Chairman and President of KEXIM. The Prime Contractor for the Barakah Nuclear Energy Plant, KEPCO has been working together with ENEC since 2009 to deliver safe, clean, efficient and reliable nuclear energy to the UAE grid. ENEC and KEPCO recently entered into a Joint Venture Agreement to establish a new, long-term partnership to complete the construction and commissioning of the Barakah project and ensure the reliability, sustainability and commercial viability of the UAE Peaceful Nuclear Energy Program.

The Barakah Nuclear Energy Plant is scheduled for completion in 2020, with construction having started in 2012. With four reactors online, the facility will deliver up to a quarter of the UAE’s electricity needs and save up to 12 million tons in carbon emissions every year.

The project at Barakah is progressing steadily. Overall, construction of Units 1 to 4 is now over 71 percent complete.

All four units will deliver safe, clean, reliable and efficient nuclear energy to the UAE grid, pending regulatory reviews and licensing.

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December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

Emirates NBD bags 'Outstanding Private Bank Middle East' and 'Outstanding NRI/Global Indians Offering' at Private Banker International Global Wealth Awards

OUTSTANDNG NRI/GLOBAL INDIANS OFFERING Emirates NBD Private Banking

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mirates NBD, a leading bank in the region today announced that its Private Banking division won ‘Outstanding Private Bank – Middle East’ for the second consecutive year and ‘Outstanding NRI/Global Indians Offering’ at the 2016 Private Banker International Global Wealth Awards.

The awards, among the most prestigious and established in the global private banking industry, are organised by Trimetric, an independent provider of online data, analysis and advisory services and the publisher of Private Banker International (PBI), the leading journal for the global wealth management industry. Award finalists undergo a rigorous selection process by the PBI editorial board and judging panel. Shortlisted nominations are then submitted to an industry expert panel of judges for final selection. The award ceremony, held recently in Singapore, gathered global private banking and wealth management players to recognise the ones that are setting new standards in the industry.

Saod Obaidalla, Executive Vice President, Head of Private

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OUTSTANDING PRIVATE BANK - MIDDLE EAST Emirates NBD Private Banking

Banking, Emirates NBD said: “We are delighted and grateful to see that our continuous efforts to provide an outstanding platform and service to our clients are being recognised for the second year in a row. 2015/16 saw the launch of our new brand proposition ‘Opportunities to Inspire’, an enhanced investment advisory service as well as numerous technological advancements; among them the ‘investment widget” that gives our clients get in-depth view on their portfolio in our mobile banking app. I am especially happy that we have received global recognition this year in the form of the ‘Outstanding NRI/Global Indians Offering’ award that demonstrates our capabilities in catering to this segment.”

Emirates NBD Private Banking has regional offices in Dubai, Abu Dhabi and Riyadh as well as internationally in London and Singapore with experienced and knowledgeable coverage teams of private bankers and investment advisors offering an unparalleled range of investment solutions with client service to the highest standard, catering not only to individuals, but also family offices and select institutional investors.

December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

RTA provides delivery service of disability cards

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he Roads and Transport Authority (RTA) announced that it would provide delivery service of cards issued for the disabled to their workplaces or homes starting from this November. The step comes, as part of RTA’s effort to support the Dubai Government’s initiative entitled ‘My community... A city for everyone’ aimed at transforming Dubai into a disabled-friendly city by 2020.

“Delivering cards to the domiciles or workplace of disabled

persons, without obliging them to visit customers happiness centers or RTA Head Office, underscores RTA’s commitment to this segment which is viewed an integral component of the social fabric. The disabled individuals are required to prepare necessary documentation and file their applications through the Call Center (8009090). A delegate from the RTA will then head to them to handover their cards. It is noteworthy that the RTA is planning to add more services to be processed through such means,” according to Yousef Al Reda, CEO of Corporate Administrative Support Services Sector cum Head of the team supervising the transformation of Dubai into a city for enabling the disabled at the RTA. “RTA attaches considerable attention to the disabled through examining their needs & expectations, and enabling them avail our service offering in a convenient manner. RTA holds brainstorming sessions to improve services for persons with disability to offer them added satisfaction & happiness.

“RTA has recently visited the Dubai Club for the Disabled to screen the views, suggestions and feedbacks of the disabled in order to chart out plans for turning them into a reality. RTA is considered one of the key government bodies that make serious efforts to bring success to the ‘Accessible Environment for Persons with Disability’ initiative,” said Al Rida.

“RTA considers the disabled when developing mobilityrelated services and projects. In this context, it was keen on configuring the designs of its public transit means to cater to the needs of the disabled, availing them smooth transit aboard buses, metro, taxis or marine transport modes.

Furthermore, RTA has upgraded its website to fulfill the needs of visually impaired persons while surfing or applying for services,” he added.

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December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

DIFC home to first, innovative Equity Crowd funding platform in the region

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ubai International Financial Centre (DIFC), the region’s leading financial hub, connecting business and financial institutions with emerging market opportunities across the Middle, East, Africa and South Asia (MEASA), has today become home to the first Equity Crowd funding platform in the region, Eureeca. It is the first multi-regulated global Equity Crowd funding platform, has over 12,000 investors from 42 countries. It enables entrepreneurs and high growth businesses to raise much needed expansion capital and create new partnerships for growth.

The firm’s investor network, that ranges from small scale and angel investors, to institutional investors and corporate, can access exciting new investment opportunities from multiple countries globally allowing them to buy shares and make equity investments in these companies.

Welcoming Eureeca to DIFC, CEO of DIFC Authority, Arif Amiri said, “The MEASA region is the world’s fastest growing region.

As a financial hub, we are always striving for new ways to help firms access this $7.8 trillion market of 3 billion people, home to a vast array of start-ups with a strong entrepreneurial spirit. Eureeca, the first ever Equity Crowd funding platform in the region, will help link these high growth businesses with much needed and underserved capital. It is a testament to the regulatory infrastructure we have put in place that they have chosen DIFC as their regional hub, with firms like these a crucial part of our plan for our 2024 Growth Strategy.”

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Recognising the attractiveness of DIFC as a fintech hub, Amiri added, “Fintech is the future of financial services and it is key to opening up many sectors in emerging markets and driving financial inclusion. In recent years, we have invested heavily in creating an ecosystem for fintech firms, backed up by world-class legal and regulatory structures. I am sure Eureeca will benefit from access to the MEASA region through the DIFC’s enabling platform, bringing multiple opportunities for networking and partnerships for growth.”

Sam Quawasmi, the Co-CEO and Co-founder of Eureeca discussed the offering Eureeca would be bringing to the region. “Born out of Dubai, and after the Dubai Financial Services Authority’s (DFSA) tremendous efforts, Eureeca is delighted to be the first Equity Crowd funding platform to be licensed to operate with a representative office in the DIFC. We offer investors a stable multi-regulated platform to invest in the businesses of the future,” he commented.

Eureeca recently raised $400,000 in 12 days on its selffunding campaign with the funds being used to fuel Eureeca’s aggressive international growth plans and continued development of their product offering.

Chris Thomas, Co-CEO and Co-founder of Eureeca said: “With the DFSA’s stamp of approval, paralleled with our successful global expansion strategy, Eureeca creates a corridor of investment opportunities between Europe, the Middle East and Southeast Asia.”

December 2016

Intelligent SME

BUSINESS ANNOUNCEMENT

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December 2016

Intelligent SME

BUSINESS ANNOUNCEMENTS

Mohammed bin Rashid Space Centre showcases UAE space programme at World Space Risk Forum 2016

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he Mohammed bin Rashid Space Centre (MBRSC) has participated in the World Space Risk Forum (WSRF) 2016, the global event that brings together a large number of international experts and specialists in the field of space industry from around the world. During the opening session, the forum rewarded MBRSC with the Inspiration Award, as Salem Al Marri, Assistant Director General for Scientific & Technical Affairs at MBRSC, was handed the honorary shield from Laurent Lemaire, organizing host of the WSRF and Chairman and CEO of elseco, in recognition of the achievements made by the Centre in space science and space industry locally and internationally.

Commenting on the fact that the UAE hosts the forum, and MBRSC’s participation, HE Yousuf Al Shaibani, Director General of MBRSC, said: “Hosting the World Space Risk Forum in the UAE contributes to reinforcing our country’s position in the global space industry. The forum offers a platform to exchange experiences and practices, promote knowledge transfer, and create cooperation channels between decision makers involved in the space sector from around the world.”

Al Shaibani also thanked the forum for granting MBRSC the Inspiration Award, stating that he believes the centre’s accomplishments in space to be admired by many countries around the world. “In a short period of time, we’ve managed to achieve a great deal, including the launch of two satellites into space, building the first Remote Sensing Earth Observation Satellite using only Emirati expertise –

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KhalifaSat, and beginning work on the first Arab mission to explore outer space — with the Hope probe.

"The UAE’s space sector has a very ambitious strategy based on innovation, creativity, excellence and investment in human resources.

We’re fully confident and hopeful that we will make qualitative development and advancement in the UAE space projects in line with the Centre's strategic plans, which aim to fulfill the aspirations of our leadership to make the UAE one of the leading countries in the space science industry by 2021,” Al Shaibani concluded.

During the forum, Al Marri delivered the opening speech, where he thanked elseco, a leading insurance underwriting company specialised in the space, aviation and energy sectors, and one of the forum’s organizing entities. He highlighted the partnership between MBRSC and elseco since the launch of the World Space Risk Forum in Dubai in 2010.

In his speech, Al Marri highlighted the achievements made by the UAE space programme across the past 10 years. He also addressed the risks associated with space missions, and emphasised the need for proactive and operational plans to assess and mitigate risks by government institutions and agencies launching space projects and missions.

Al Marri said: “By giving all countries and organisations equal opportunities to participate in the space industry, we can contribute to the growth of space technology. MBRSC continues to promote cooperation and coordination with the global space community in order to develop international frameworks to regulate space activities, with a view to building a sustainable space sector.”

Eng. Adnan Al Rais, Deputy Project Manager of the Emirates Mars Mission, participated in one of the conference sessions.

He briefed participants on the most ambitious project in the UAE. He also highlighted the mission objectives and how one begins to gather data on Mars, before sharing it with the global space science community that have an interest in the Red Planet.

December 2016

Intelligent SME

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December 2016

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MEET THE CEO

UAE-US Relationship - Envisioning a Better Tomorrow An immensely positive and informative interview with Bilal Sabouni, CEO of American Business Council (ABC) of Dubai & Northern Emirates, where he opens up about UAE-US relationship, the benefits of working together, and how ABC’s role is crucial to the entire process.

Could you please provide an overview of the US–UAE business relationship in terms of the value of trade as well as other key areas of cooperation?

The US-UAE business relationship stems from longstanding and historic formal diplomatic relations that the two countries have enjoyed for over four decades. Despite being halfway around the world, the US was the third nation to formally recognize the UAE after it was established as a sovereign nation in 1971.

The current value of goods exports from the US to the UAE amount to nearly US $23 Billion in 2015 (excluding services).

The UAE has been the single largest export market in the Middle East for the sixth consecutive year. It is also among the top 20 trading partners of the US globally and has the highest foreign direct investment in the US of all countries in the world.

We have nearly 1,500 US companies with a direct or indirect presence in Dubai, approximately 35,000 Americans living and working across Dubai and the Northern Emirates and roughly 50,000-60,000 US citizens residing across the UAE. Key industries include Healthcare & Medical Devices, Education & Training, Oil and Gas, Energy, Engineering and Construction, Safety & Security, Environment, Auto, Information Technology and Franchising, Aerospace & Aviation, Machinery, Food and Agricultural - a very wide range

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of goods and services.

Which aspects of UAE’s relationship with the US are receiving the most emphasis and are expected to grow in future?

An IMF Report recently concluded that despite persistent lower oil prices and weakened investor appetite, the UAE’s large buffers and diligence in their diversification strategy has contained most of the negative effects that otherwise would have prevailed. Over the medium term, economic activity is forecasted to improve and grow as the growth of both the non-hydrocarbons is projected to increase to over 4%. Coupled with stronger oil prices and a ramp up in external demand and private investment ahead of Expo 2020, we see a very positive economic landscape on the horizon.

Innovation, technology, transportation, energy & sustainability, security & defense and education are all receiving a high level of emphasis and are expected to grow in the future, but as I mentioned earlier, other key industries such as healthcare, finance & specifically Islamic Finance, as well as many of the other sectors and industries in which the US has strength are also being prioritized.

Are you campaigning for a UAE-US FTA and what are the issues to be overcome in this regard?

December 2016

Intelligent SME

This is not a new topic and has been a talking point since 2005 after the US and the UAE signed the historic Trade and Investment Framework Agreement (TIFA) in 2004. Due to a variety of reasons and issues (some not related to the process at all) this has been delayed and subsequently put on hold.

A FTA with the USA would assist the base metal sector, gold and jewelry, chemicals, plastics and textiles, and we are generally supportive of such a development, but it is likely that the US will be trading with the UAE within a broader regional GCC framework. In the absence of an FTA, on March 1st 2012, the US & the UAE established an Economic Policy Dialogue (EPD), framed to meet twice a year, alternately in the US and in the UAE. The EPD’s purpose is to serve as an umbrella for a number of new and ongoing initiatives that are aimed at deepening economic and commercial ties between the UAE and the US, including ways to streamline the visa process for UAE business people visiting the US, eliminate non-tariff trade barriers, facilitate direct investments in the economies of both countries, stimulate economic development and job creation in both countries.

Today, the UAE’s EPD with the US has evolved into a GCC initiative between the US and the six Arabian Gulf nations as a block.

In the areas of technology and innovation we know about the impact of the US on the world.

Are there any areas where the UAE companies or government are influencing the US?

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December 2016

Intelligent SME

MEET THE CEO

At the outset, you might think that most of the influence of technology and innovation comes from the US towards the UAE, but if you look more closely, you’ll find a wide range of examples of the reverse happening too.

Let’s first of all agree that a company or individual can never be number one by copying everything. I’d say the most that you can ever achieve is becoming number two. In order to overcome all competition and achieve the coveted top spot, innovation must take place. New technology and new thinking must be evident.

Two examples immediately come to mind: Emirates Airlines and Emaar. Emirates Airlines, launched in the same year as the American Business Council in 1985, is today by many measures a number one airline teaching the rest of the world how aviation is done. Emaar, founded in 1997, today is building and developing landmark and iconic structures and communities. They have built and own what is today the tallest building in the world, and they have announced an even taller tower to be completed in time for the Dubai Expo 2020. You don’t build and run these types of projects without innovative thinking.

Now to be fair, overall, the UAE is still very much a net importer of technology and innovation, but the government is taking very seriously the matter of building capacity to become an overall net exporter of technology and innovation.

In fact, with 2015 having been the “Year of Innovation” in the UAE, we observe giant investments and forward leaps in the UAE’s capacity and appetite for technology and innovation.

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What are the goals and objectives of the ABC and how does it go about achieving them?

As the US Chamber of Commerce’s international affiliate based in Dubai for over 31 years, ABC Dubai’s mission is to enhance bilateral economic relations between the United States of America, the United Arab Emirates, and the wider region. We do this by supporting private sector growth by facilitating and fostering B2G relationships, B2B connections, and supporting B2C activity for our members.

Other examples of our work include: - Helping to make fortune 500 companies aware of new draft legislation and helping to connect them to key government officials.

- Helping US or UAE SMEs and entrepreneurs establish themselves or increase market share for expansion.

- Incorporating American and Emirati individuals in building the two communities closer by celebrating great American holidays together such as Independence Day, Thanksgiving, etc., leading to a happier, more satisfied and better connected country.

To achieve the above and our wider goals and missions, we rely heavily on our ability to act as an important and strategic resource for the UAE government to utilize, earning a positive reputation in the region. We continue to work closely with key government agencies on matters of mutual interest and benefit, while focusing on the improvement of the economic and commercial position of both the US and the UAE.

December 2016

Intelligent SME

MEET THE CEO

In the field of Public Policy, which organizations do you count as partners in the UAE that may have similar goals to yours?

In Public Policy, all organizations, private or public, large or small, new or well-established, are partners and help either directly or indirectly to further our goal of creating a vibrant economic & commercial environment which then benefits not only US trade and commerce, but also the overall economic climate which everyone ends up enjoying.

Similar to the US, other countries have their own trade bodies, and do a very good job of promoting their countries goods and services. At the US Embassy and Consulate we have Commercial & Economic Officers dedicated to ensuring a favorable environment to US interests and counseling US companies looking to enter the market or grow market share.

The UAE does a very good job of running their country and focusing the government’s overall effort into a single direction to achieve an overall goal. There are UAE government entities that we work closely with such as the Ministry of Economy, Dubai Chamber, Dubai Economic Department, Dubai Economic Council, Dubai FDI, and many, many other government agencies and counterpart Chambers across Sharjah and the rest of the Northern Emirates.

Your members are an influential group within the UAE business community. How do you leverage their influence to be a force for good within the community?

The American Business Council was the first Council of its kind to be established in the UAE and we are an international affiliate of the US Chamber of Commerce in Washington.

We are the oldest and one of the most influential international trade groups established in the UAE, but with that comes a great deal of responsibility to ensure that everything we do is not only in the best interest of our members and US-business, but perhaps more importantly, also in the best interest of the local community and the general environment that we live and work in.

In past years, we have ensured to give back through various CSR initiatives and donations to local charities. For example, the staff of the American Business Council recently engaged with the Dubai Center for Special Needs and donated thousands of dirhams worth of toys and goods to support their activities.

It’s crucial that we do this and stay rooted to our local community. This is something we and all our members feel strongly about.

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December 2016

Intelligent SME

GOVERNANCE

Globalism vs. Tribalism – Reshaping Reality Akram Miknas on how separatist and bigoted politics is destroying global economy and why the politics of ignorance should stop.

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December 2016

Intelligent SME

GOVERNANCE

A

s we entered the 21st century, a globalized vision for humanity appeared to be sweeping all before it; bringing us all closer together, leveling the barriers which divided us, and promising greater prosperity for everyone.

As much as anything, this suggested that economists were winning the argument. They preached in favor of widening economies of scale; supply from whoever offered competitive advantage; and a progressive reduction in economic inequalities around the world. All societies would become more tightly enmeshed in this globalized system, becoming more efficient and productive – and reaping the rewards.

Just a few years later it feels that we occupy a very different world governed by a very different set of ideologies.

Wherever we look, populations are pressing their leaders to disengage from the outside world and withdraw into their own islands. This represents a politics and economics of neoisolationism.

We saw this with the US presidential elections; with both candidates campaigning in a climate which took it for granted that trade deals and open commerce are bad. We also see it in the forces threatening to pull the EU apart; as people look at the difficulties facing the Euro zone and conclude that the whole European project must have been a mistake.

In the Arab world, we are not only withdrawing into our own little national islands, but these islands are dividing against themselves into tiny cantons; the same kind of cantons that the Zionist leader Ben-Gurion saw would leave the Palestinian nation divided and impotent. This is the politics of sectarianism, tribalism, extremism and cultural intolerance.

Over the past decade we have gone from an ethos of open borders and the promise of prosperity; to fragmenting economies and demands for bigger walls to keep out foreign workers, foreign goods, foreign refugees and foreign influences.

It is strange how for many people the fear of terrorism and refugees becomes confused with fears that foreign interference is damaging the economy - feeding into the Donald Trump narrative of simply building a wall to keep everything and everybody out.

These fears have encouraged us to go back to being very tribal in our outlook; we are suspicious and nervous of anything unfamiliar; we cannot admit 100 Syrian refugees, because one of them could be a terrorist.

While it is true that the world as a whole benefits from free trade, what has become very obvious is that certain demographics tend to get left behind. For example; the lowskilled workers in the US who have lost out to cheap foreign labor and consequently have been attracted by Donald Trump's rhetoric.

This failure to do more to ease the redeployment of those who lost out – the failure to share our collective winnings around more evenly – has resulted in a situation where these demographics are voting as a bloc against political elites and

We can either accept the ascendancy of this politics of tribalism and isolationism; or we can unite to argue against these dangerous tendencies.

against close global integration.

2016 is the first year since the Second World War that trade between nations declined during a period of economic growth; with the volume of global trade falling 0.8% in the second quarter of this year. Likewise the total value of US imports and exports has fallen for two years running.

Prosperity increases trade; and trade increases prosperity – it’s a virtuous circle. However, when levels of global economic growth go into reverse, precisely the opposite happens, i.e.; this decline in global trade makes us less prosperous and leads to trade further being reduced.

Yet things are scarier than they first seem. The decrease in international commerce combined with sluggish local economies leads to pressure upon governments to provide greater protection for businesses and workers – subsidizing products, raising tariffs and discriminating against foreign businesses and workers.

I’m sure that you are sufficiently literate in economic theory not to need to spell out the dangers of such protectionist pressures for the global economy. As we saw in the 1930s, retaliatory trade barriers go up all around the world and trade levels plunge, throwing the economy into the deep freeze.

The World Trade Organization’s admission that its members have implemented more than 2,100 new measures restricting trade since 2008 is a tangible example of this process already underway. This backlash against political engagement with the world and against economic globalization risk becoming the defining attributes of our time.

The 1990s were marked by a perhaps naive optimism towards globalism. Trade soared and barriers came down.

The period after 9/11 shook us out of our complacency, but it was still a period of intense encounters between east and west. The 2008 economic crash followed by the socalled Arab Spring threw the world’s economy into panic and exacerbated political tensions, as crises in Syria, Libya and

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GOVERNANCE

Iraq gained international dimensions and led to major political fault-lines between regional and global power blocs.

Thus, the economic and political optimism of the 1990s – when thinkers like Francis Fukuyama pronounced an “end of history” and the supremacy of a globalized liberal consensus – seem like a very distant memory.

A retreat into political, cultural and economic isolationism and tribalism would benefit nobody. I apologize if I sound too harsh in describing such a scenario as a triumph of the politics of fear and ignorance; but this does help us diagnose how we should respond.

This politics of ignorance has triumphed because political elites everywhere are on the defensive. Instead of arguing articulately for more responsible models of free trade; politicians adopt the rhetoric of their most ignorant audiences and argue against global trade agreements; while making impossibly tough promises for keeping out refugees and immigrants.

This race to the bottom in political dialogue has normalized the far-right and the lunatic fringes of racism, Islamophobia and xenophobia.

During the British debate on leaving the European Union, a leading Brexit politician notoriously stood up and said, “I think this country has had enough of experts.” Such a comment is what populist rhetoric looks like when it arrives at its lowest

common denominator: a victory for ignorance.

The fight-back must therefore start with the experts calmly and clearly making the case for the benefits of re-engaging with the world; while showing the counterproductive consequences of the politics and economics of fear.

Meanwhile, politicians must learn that if they start treating their electorates like grown-ups, then the electorate will mostly behave like grown-ups. Businessmen, entrepreneurs and technocratic voices must also make themselves more audible in arguing why we all have a shared interest in not backing away from globalization and open trade.

We can either accept the ascendancy of this politics of tribalism and isolationism; or we can unite to argue against these dangerous tendencies.

The economic consequences of a failure to act are only too clear.

AKRAM MIKNAS, CEO, Promoseven Holdings

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December 2016

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SME INNOVATION

Empowering UAE’s SME Community The emergence of SMEs in the UAE and how does Zawdeh plan to boost the entrepreneurial community.

A candid interview with Peter Aziz, Co-founder and Marketing Manager of Zawdeh.

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December 2016

Intelligent SME

SME INNOVATION

Could you tell us something about the history of Zawdeh? When did it form and what was the thought behind building this organization?

Zawdeh was established in Dec 2015 by entrepreneurs with a vast experience in managing SMEs. The idea and concept emerged from our struggle to have the best value for our money when it came to monthly expenditure on overheads and assets purchased. The constant struggle brought forth an important question – How can we boost our business by decreasing our cost without compromising on quantity and quality while increasing our revenues?

So, we created the SME business community evolving around the economies of scale theory to group SMEs together into one buying power. Here, SMEs can trade with our selective partners benefiting from great deals and discounts that will allow them to decrease their operating cost by up to 20%. At Zawdeh, we try to minimize their cost without compromising the primary requirements; companies can purchase whatever they need, with the highest quality and at the lowest price.

But why stop at decreasing cost? Using the SME business community also allows the SMEs to have their own platform to promote special offers to other Zawdeh members as well as the public, which increases their sales and brand recognition.

What are some of the biggest challenges faced by

Helping SME owners boost their business by joining Zawdeh’s SME business community will ease up the degree of challenges they face in operating their businesses. Our Community platform will help SMEs live up to their obligations while fulfilling expo 2020 requirements.

the SMEs in UAE? I can name a few that can make or break an SME in the UAE market; however, the most important one is managing cash flow. Companies need funds to survive, and if it is unavailable and banks do not facilitate then, they either go for drastic cost cutting or shut down altogether.

Also, client acquisition at the lowest sales and marketing cost allow them to have competitive pricing and a good profit margin at the same time.

Why should the government, corporations, and individuals invest in SMEs? What are the advantages of working with them and how is it beneficial to the economic growth of the country?

SMEs are considered the heart and soul of any economy.

Take UAE as an example. The UAE market is 94% SMEs and employs more than 86% of the private sector’s workforce (Source: http://www.kippreport.com/fcs/smes-represent95-per-cent-of-uae-businesses/).

Certain points differentiate SMEs from larger organizations and could be considered as USPs for them. Firstly, small businesses are driven by the aspirations of their founders.

They will invest more time and energy to grow and produce results, and they will motivate their teams to excel and achieve the high goal (it’s never a 9-6 job for an SME). Secondly, when you are working with an SME, you are in direct contact with all the stakeholders in the company, which makes work easier, faster and more efficient. Last but not the least, SMEs are flexible. Business owners have the authority to agree on deals, tailor products, and scope of work and approvals are somehow acquired easily and faster than larger corporations.

In the past couple of years, there has been a rise in the number of business communities and platforms targeted towards SMEs. How would you differentiate Zawdeh from the rest in the market?

At Zawdeh, we always try to be different. No one thought about increasing the net profit of SMEs through cost reduction (not cost cutting); we did. Even when we thought about helping SMEs enhance their sales and revenues, we created a marketplace that was unique. SMEs don’t just list themselves on the portal like our peers; they advertise a special B2B offer for the benefit of the other members of the community and the public. It gives them the competitive edge and attracts more customers.

The global economy is not in a very stable position, and the projection for 2017 is far from robust. How do the SMEs survive in such situations and what would be Zawdeh’s strategy in helping SMEs pass through this phase?

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December 2016

Intelligent SME

SME INNOVATION

Think outside the box. SMEs need to start changing the way they do business. Knocking on doors and cold calling is not working anymore; they need to find a way to generate leads, convey their value proposition and secure the deals in the most cost effective way.

When the market is down, SMEs need to start working together to survive; affinity marketing is the current trend, and it is working. Tie up with people who will introduce you to your target audience, seek new partnerships and find the right influencers who will open doors for your business to grow.

Cut unnecessary cost, and always find the most cost effective solutions for your overheads. Zawdeh helps SMEs do all that; we help you connect with other members, open new doors for business and decrease your cost without compromising the quality or quantity of your purchases.

Anything digital. E-commerce will grow exponentially in the coming years; mobile applications are the go-to business solution at the moment, and they will continue growing.

How does Zawdeh align itself with the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum’s of making Dubai the ‘happiest city on the planet’ and what are its strategies for the Expo 2020?

Helping SME owners boost their business by joining Zawdeh’s SME business community will ease up the degree of challenges they face in operating their businesses. It will lead to a better working environment and a prosperous outcome that will cascade down to the workforce in their segments.

Our Community platform will help SMEs live up to their obligations while fulfilling Expo 2020 requirements.

Which are the sectors where the SME growth has been exponential? Are there any areas which are currently showing a slow growth but looks promising in the next five years?

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Intelligent SME

BUSINESS ANNOUNCEMENT

P.O. Box 61450, Dubai, United Arab Emirates Tel: +971 4 881 8288, Fax: +971 4 881 9157 P.O. BoxAFL.relocations@alfuttaim.ae 61450, Dubai, United Arab Emirates Email: Tel: +971 4 881 8288, Fax: +971 4 881 9157 P.O. Box 61450, Dubai, United Arab Emirates Email: AFL.relocations@alfuttaim.ae Tel: +971 4 881 Dubai, 8288, Fax: +971 881 9157 P.O. Box 61450, United Arab4 Emirates Email: AFL.relocations@alfuttaim.ae Tel: +971 4 881 8288, Fax: +971 4 881 9157 Email: AFL.relocations@alfuttaim.ae

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December 2016

Intelligent SME

COVER STORY

In Focus: The UAE Bankruptcy Law The new UAE bankruptcy law has created quite a stir in the local and global business arena. This article attempts to deconstruct the complexities of the law and help the SMEs and entrepreneurs decode the new provisions – an ISME feature.

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December 2016

Intelligent SME

COVER STORY

A

ccording to Wikipedia, “Bankruptcy is a legal status of a person or other entity that cannot repay the debts it owes to creditors. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.”

The bankruptcy law is an important piece of reform that is based on legislative and economic principles to help boost business confidence. The UAE has been working on it for a long time, and with the final draft of the federal bankruptcy law being approved by the UAE Cabinet, the finalized law is just a matter of months now.

Here are a few things you need to know about the soon to be passed bankruptcy law.

What is the bankruptcy law?

The bankruptcy law is a comprehensive legal framework aimed to help distressed companies in the UAE circumvent bankruptcy and liquidation. It is drafted by the Ministry of Finance, and the law draws on the best insolvency and bankruptcy protection practices from several countries, including France, Germany, the Netherlands, and Japan.

The primary purpose of the law is to safeguard the rights of both, the creditors and the debtors, in insolvency situations, including measures that prioritize secured creditor rights and aid companies to restructure without unanimous creditor approval.

Why is the bankruptcy law important?

UAE has long been in need of a robust and viable bankruptcy law. In fact, the lack of a modern, comprehensive bankruptcy law has been cited as one of the major shortfalls of the UAE’s business climate. Companies, irrespective of their sizes, have been unable to persuade the local courts to offer a moratorium on debt claims when they run into financial trouble while they work on restructuring their business and finances, thus leaving them at the mercy of creditors. Even though there are more than 250 articles in the country’s commercial transactions law dealing with insolvency, the existing regulations are more suited to the resolution of the insolvency of smaller and local companies, rather than international companies with byzantine global funding structures. These provisions offer fewer options to companies threatened with bankruptcy beyond liquidation, and therefore hardly used.

When will the law be implemented?

The UAE’s cabinet has approved the new law on the 4th of September, after several years of intense scrutiny conducted by a series of committees. Generally, laws approved by the Cabinet are referred to the FNC for consultation, before being sent to the President’s office for the final approval. However, as per the UAE Constitution, laws can be referred directly to the President’s office when the FNC is in recess. Since the FNC was on break till mid-October, the President’s signature was received and the law which has been published in the

The UAE Bankruptcy Law, aimed to promote direct foreign investments and boost business confidence, is likely to come into effect early next year.

UAE’s official legal gazette, will be coming into effect a couple of months later, which might be as early as the first quarter of 2017.

Whom does the law apply to?

The law is applicable to companies established under the commercial companies’ law, companies that are wholly or partially owned by the federal or the local government, and companies and institutions established in free zones that are not governed by any existing bankruptcy provisions. The new law does not apply to organizations registered in the DIFC and the Abu Dhabi Global Market, as both these financial free zones have their own internal legislation regarding insolvency and bankruptcy. The law includes provisions related to senior employees and directors of insolvent companies but does not cover individuals.

What are the key features of the new law?

The new law will now require establishing a separate regulatory body, the Committee of Financial Restructuring (CFR). It will oversee the procedures of financial restructuring outside the scope of the courts, will be responsible for the appointment of experts in the field of financial restructuring, and create and maintain an electronic database of individuals who have had bankruptcy rulings against them.

This new bankruptcy law sets out four broad ways for insolvent companies to avoid bankruptcy: 1. Financial reorganization, an initial solution available to financial entities regulated by the Central Bank and the Securities and Commodities Authority, administered by experts appointed by the CFR. 2. A pre-emptive settlement, managed by the courts, which

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COVER STORY

allows a bona fide debtor to agree to a settlement with the creditors that will be nullified if the pledger fails to abide by the settlement terms agreed by both sides.

days from the date of such a warning

3. Financial restructuring, wherein the company’s debts are reorganized to the satisfaction of the majority of the creditors holding at a minimum of two-thirds of the outstanding debt, in a procedure overseen by the courts.

A broad array of penalties (both financial and penal) are included in the new UAE bankruptcy law, some of which provide a broad discretion to the courts as to penalty.

If the tribunal finds that the debtor has insufficient funds to fulfill at least 20 percent of the creditor’s claims, the court has the authority to obligate all or some of the directors or managers of the debtor to pay all or part of the debts where their responsibility for the debtor's losses is "…evident…" in reference to the Commercial Companies Law. The law will encourage higher standards of corporate governance given that one of the penalties (Article 200) imposes a maximum sentence of one-year imprisonment or a fine not exceeding Dh 30,000 for those who receive a bankruptcy judgment and did not maintain sufficient commercial records to establish their financial position before the bankruptcy. Corporate governance is increasingly being regarded as an important consideration in the region, and it is expected to continue with the implementation of the new UAE bankruptcy law.

General managers, in particular, should continue to implement appropriate systems for managing the cash flow and working capital of the business during financial difficulties.

4. The raising of new funds, according to the criteria determined by the courts.

When can the petition be filed?

The UAE bankruptcy law sets out two routes through which the bankruptcy petition can be filed:

By the debtor who • Is struck with financial difficulty and require assistance in reaching a conciliatory level with its creditors; and • Has ceased paying its debts for a period of more than 30 consecutive working days

By the creditor who • Is owed a minimum of Dh 100,000 by the debtor • Has already warned the debtor to fulfill the debt • Has fulfilled the waiting period of 30 consecutive working

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Penalties

December 2016

Intelligent SME

COVER STORY

THE TOP

LARGEST BANKRUPTCIES IN HISTORY

1 LEHMAN BROTHERS HOLDINGS Bankruptcy Date: 15th Sep 2008 Bankruptcy Assets: $691.1 billion Industry: Investment Services

2

3

4

WASHINGTON MUTUAL INC.

WORLDCOM

GENERAL MOTORS

Bankruptcy Date: 26th Sep 2008

Bankruptcy Date: 21st July 2002

Bankruptcy Date: 1st June 2009

Bankruptcy Assets: $327.9 billion

Bankruptcy Assets: $103.9 billion

Bankruptcy Assets: $91 billion

Industry: Finance and Insurance

Industry: Telecommunications

Industry: Automotive

5

6

7

CIT GROUP

ENRON

CONSECO

Bankruptcy Date: 1st November 2009

Bankruptcy Date: 2nd December 2001

Bankruptcy Date: 17th December 2002

Bankruptcy Assets: $71 billion

Bankruptcy Assets: $65.5 billion

Bankruptcy Assets: $61 billion

Industry: Financial Services

Industry: Energy

Industry: Financial Services

9

10

ENERGY FUTURE HOLDINGS

MF GLOBAL HOLDINGS

CHRYSLER

Bankruptcy Date: 29th April 2014

Bankruptcy Date: 31st October 2011

Bankruptcy Date: 30th April 2009

Bankruptcy Assets: $40.9 billion

Bankruptcy Assets: $40.5 billion

Bankruptcy Assets: $39.3 billion

Industry: Electric Utility

Industry: Financial Services

Industry: Automotive

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December 2016

Intelligent SME

SME FINANCE

Risk Management for Successful SMEs Financial risks exist everywhere; it cannot be avoided and has a certain influence on a company’s production and management. In this article, Simon Hodges talks about the steps an SME needs to survive and put forward effective prevention and control measures to lower the possibility of risks and ensure development.

A

s businesses grow, they change. Higher revenues require additional resources, more support and a greater sales effort. Additional business units are opened and communication lines extended. More people are taken on, and customers demand quicker service at lower costs to them. Suddenly it seems there are not enough hours in the day; every call is another crisis that requires attention and more worryingly, the financial results seem to struggle to meet expectations.

Although the development of the business remains a dream, somehow it becomes impossible to find the time and, in effect, the business stalls.

Once a business reaches this stage in its development, there is a need for the organization to transition from a start-up structure to one where a management expertise is required to be created right at the heart of the decision-making process.

Effective management starts with the top team accepting that they are responsible for all the decisions that are made, not just the ones they understand.

For many businesses, it means that the leader takes every

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meaningful decision but the simple fact is that there is only so much one individual can do and because others stand back to wait for the leader, many vital decisions are in fact never made.

Many would argue that the answer lies in the immediate establishment of traditional corporate governance structures and processes. While there is no doubt that such structures when set up and used correctly, significantly enhance the performance of an organization, sadly, in smaller ones, they can often slow the business down because they add unnecessary levels of bureaucracy and cost.

There is, in my view, an intermediate step that would allow the organization to broadly maintain its entrepreneurial set up while the management begins to tackle the problem of establishing management systems that can support the growth.

There are two skill sets essential to the top of any organization; the risk taker and the risk manager. In the start-up phase, the risk taker skill is the only one that matters but as the business matures and the ability of the leader to remain in the front-line fades, the forward-thinking leader will

December 2016

Intelligent SME

SME FINANCE

recognise that change is necessary.

If there’s no change, businesses either stagnate due to lack of risk-taking capabilities, or they fail because there is little or no understanding of how the organization needed to be set up and managed to deliver the objectives established by the risk taker. The start of this process is often demonstrated through a constant shortage of cash and a multitude of seemingly foolish little mistakes at the operational level.

The delegation of responsibilities for the management of the organization to a business partner that the leader respects frees up vital time of the leader to allow the process of forward-planning to begin, but in fact so much more is achieved.

The risk taker can now concentrate on the areas of business development and operations while the risk manager is responsible for finance and risk. Other sectors such as sales and marketing (the risk taker), IT, HR, Insurance and health & safety (the risk manager) are allocated where the head of that department does not have a seat at the top table.

Contrary to popular opinion, the management of risk is the process by which the actions set by the risk taker are delivered in a sustainable way. It is not the process where the risk is highlighted but leaves others to take responsibility for the subsequent decisions.

Many organizations only go so far by appointing a head of finance whose role is limited to providing a bookkeeping function through the provision of accounting activities such as the Profit & Loss account, the balance sheet, and the cash flow statements.

The issue here is that accountants use such processes to look back while the organization is beginning to also need the forward-looking skills of management accounting such as forecasting and budgeting.

More than that is the requirement for a senior executive to have the time and interest to understand what makes the business work so that they can plan with the providers of these activities to ensure the allocation of appropriate resources so that they can achieve the required objectives.

This aspect together with the control over the finances is the management of risk for a mid-sized SME. An SME needs access to support skills for a limited time only. Therefore, it makes sense for one executive to take responsibility for finance and risk management thereby ensuring that the organization continues to have access to the necessary skills, when and where they are needed, along with the required funding to support the growth.

The executive with the responsibility for these areas could be a business partner or co-shareholder who might have a team of experts reporting to them, such as the head of IT and even the accountant. The key point is that there is an executive at the top table who accepts responsibility for every area not covered by the leader or another senior team member By taking on the wider role of risk management, the head of finance and risk becomes the senior executive responsible

Contrary to popular opinion, the management of risk is the process by which the actions set by the risk taker are delivered in a sustainable way. It is not the process where the risk is highlighted but leaves others to take responsibility for the subsequent decisions.

for the health of the organization and its ability to deliver sustainable profits and growth in support of the risk taker’s objectives.

Both, the risk taker and the risk manager (together with other shareholder or founder), therefore become the forerunners of a board of directors. And as the business grows, additional full-time skills can be added to this team as required, thereby allowing the risk taker and risk manager to concentrate more and more on the future needs of the business.

These activities enable the organization to grow in line with the business thereby creating an efficient corporate governance system for mid-sized SMEs.

SIMON HODGES is a Chartered Secretary and a Member of the Institute of Chartered Secretaries and Administrators, the globally recognized and professional body for governance professionals. He has 30 years of experience at Board level working for international publically traded and privately held companies headquartered in Abu Dhabi, Dubai.

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SME FINANCE

Fintech and Peer-to-Peer Lending Opportunities in the UAE The emergence of peer-to-peer lending in the UAE has opened up exciting and new investment opportunities for income-seeking entrepreneurs from the region. Craig Moore, CEO of Beehive explains further.

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December 2016

Intelligent SME

SME FINANCE

T

here can be no doubt that ‘Fintech’ (Financial Technology) is one of the hottest buzzwords in conversation at the moment. Thanks to the advent of technology, fintech is revolutionizing the financial services industry by providing new finance solutions and disruptive innovation. Technology is redefining the way we bank, trade stocks, lend money, and invest in companies. As consumers, it is also significantly impacting how and where we interact with service providers. The fintech revolution is rising on a global scale, impacting sectors such as payments, institutional and retail financial services and capital formation. A recent report by Accenture showed that global investment into fintech ventures reached more than USD $22 billion in 2015 with 2016 showing a strong upward growth trend. Already well-established in the US, new growth is being driven by significant investment in Asia and Europe. While fintech is still a relatively nascent sector in the UAE, exciting developments are occurring, and more importantly, there is considerable potential for growth.

A much talked about initiation to the fintech scene in the UAE is Peer-to-Peer Lending. Peer-to-Peer (P2P) lending refers to an individual or retail investors providing finance to businesses without the use of a traditional intermediary, such as a bank. Already a proven and highly successful concept in the US and Europe, global peer-to-peer lending was estimated at USD $60 billion in 2015 and is forecast to deliver USD $300 billion by 2020.

P2P platforms directly connect businesses looking for finance with an online crowd of hundreds of potential investors. Technological advances have enabled P2P lenders to deliver services and funding decisions in a faster, more efficient manner than many conventional service providers.

It typically results in a drastically reduced cost and time to finance, which is good news for the 300,000 small and medium sized enterprises (SMEs) in the MENA region who struggle to secure timely and affordable business investment.

Considering the USD $260 billion SME funding gap in MENA, outlined by the International Monetary Fund (IMF), it is evident that P2P lending could prove to be an important lifeline for many businesses.

Investors can benefit from P2P lending as it provides them with a transparent investment and a regular monthly income stream. It is especially valuable for income-seeking investors during a period when interest rates are rising, and bond prices are declining. P2P lending should be thought of as an alternative investment (where an investor allocates around three to five percent of their portfolio). P2P enables them to diversify, spreading investments across several different businesses, over short to medium loan terms; so the risk is often diminished versus high ticket traditional asset classes.

If required, investors can access their cash by selling loan parts to other investors on a secondary market. This kind of investment environment makes it highly accessible to a much broader investment community.

The UAE has great potential to become a fintech center

The UAE needs to create an environment where financial providers and technology companies can co-exist and easily collaborate‌ a flexible environment based on a light regulation that provides low barriers to entry and nurtures, rather than hinders, a flourishing fintech ecosystem.

within the region and is investing in developing a strong SME ecosystem with a robust support network for startups. To secure its place as a fintech hub, the UAE needs to create an environment where financial providers and technology companies can co-exist and easily collaborate.

What is required is a flexible environment based on a light regulation that provides low barriers to entry and nurtures, rather than hinders, a flourishing fintech ecosystem. Once this is established, governments can introduce a more robust regulatory approach, which will level the playing field and create competitive benefits to all market participants. The UAE certainly has the resources and the vision to become a fintech hub, and with the right approach, a real opportunity to achieve it.

Craig Moore Founder and CEO, Beehive.

As Founder and CEO, Craig is responsible As Founder and CEO, Craig Moore is responsible for overseeing the overall strategic direction and managing the day-today operations of Beehive.

Before founding Beehive, Craig was a Founder & COO of Butterfly Software, a data analytics and migration software company acquired by IBM in September 2012. Prior to Butterfly, his experience includes various sales, consulting and finance roles at numerous multinational companies such as Dell, EMC, Hitachi and HSBC with an emphasis on shaping effective go to market and value propositions.

www.theintelligentsme.com

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Intelligent SME

The Rise of the Affordable Housing Sector From introducing affordable homes to the road ahead: Rizwan Sajan and Danube Group takes on the housing market in the UAE.

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SME FOCUS

Starting with a dream to make owning a home a reality for residents in Dubai, Danube Properties made waves in the affordability housing sector by launching its iconic housing projects across the city. Being part of the industry for the past 23 years, I, Rizwan Sajan have dipped my hands into every business related to the construction industry, and now as property developers, I venture deeper into the affordable housing sector, which was previously untapped but now has grabbed the attention of developers all across the UAE. The idea to make homes readily available to customers stemmed from the feedback I received from my employees over the years. The soaring rents in Dubai have been a grave concern among many, and keeping in line with H.H Sheikh Mohammed Bin Rashid Al Maktoum’s plan to make affordable housing mandatory for all new residential developments; I saw my chance as a developer to make a difference.

In 2006, Dubai witnessed a great property boom with the market moving in an unrealistic manner. I was advised by many to invest in the real estate market at that time but decided to ‘hold my horses’ as I was sure the bubble would burst. But today, in a matured market where there are effective laws in place to monitor not only the developers but also buyers, I was sure it was the right time to dive in. While developers in the region primarily focused on catering to the luxury sector, we wanted to do something that was different.

For this purpose, we launched our Glitz projects, which was one of the first affordable housing projects witnessed in the Dubai market. In addition to offering the lowest prices in the market, we also launched a value-based payment plan, allowing customers to pay a small fraction to us every month.

I was able to provide this facility only because I belong from the building materials industry and believe to have the upper hand in price and quantity.

In the affordable housing segment, our vision is to deliver world-class properties at mid-segment price, and this is precisely where we create the difference. We have mastered the understanding of what our customers expect from the affordable housing market and are dedicated to making that available. Unfortunately, a number of developers mistake affordability for cheap and compromise on the quality of materials in their projects, which in turn leads to maintenance issues resulting in the decrease in property value. Our plan involves ensuring that affordability is made possible by using the area efficiently by selecting the right building materials and value engineering. Even though our properties are affordable, they are made with superior quality finishing and state-of-the-art amenities, making a high standard of living at an economical price a possibility for many people who desire it. We noticed that the main struggle for the midmarket is finding a piece of land in a decent location at the right price and controlling the rising cost of construction.

Another factor that influenced our decision is the fact that the current supply in the market is not sufficient to meet the demand being generated and the steady drift from luxury and super luxury to the affordable segment. Like any other

In the affordable housing segment, our vision is to deliver world-class properties at mid-segment price, and this is precisely where we create the difference.

industry or sector, the affordable housing sector comes with its set of challenges. However, we can focus on three key areas – land, contractors & mortgage facility. Lands for construction in the secondary market are available at appreciated rates, and the ones available in the primary market are either not suitable for affordable housing or does not provide the incentive for such developments. There remains scarcity of good and experienced contractors leading to inflation of construction bid prices due to high demand; this further creates a shortage of skilled workforce which can impact the quality of construction. More liberalized home loan criteria & limits from the central bank can increase participation from banks offering attractive mortgage facilities to end users.

Looking at the road ahead, I firmly believe that the Expo 2020 will shape the economy in a big way. Soon after the announcement, we noticed a sharp increase in the property sector and the value of property would continue to appreciate till the Expo 2020 and beyond. Moreover, the rise in the number of projects has boosted the growth of ancillary businesses such as building materials as well as facilities management. Being an active participant in the building materials industry, we have witnessed a positive growth in demand for our materials, which are being used by contractors not only in the UAE but also across the MENA region. Moreover, the build-up to the Expo will see a growing demand for affordable housing to accommodate the massive influx of people coming to Dubai during the time.

Rizwan Sajan Founder & Chairman, Danube Group

www.theintelligentsme.com

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Intelligent SME

SME DIGITAL

Uncovering Online Brand Communities Several brands have been stepping up to engage consumers and build online communities to showcase innovation and increase revenues and customer loyalty. Marimar Portilla and Dr. Rodrigo Perez-Vega unearth the motivation behind them and how online brand communities can shake things up.

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December 2016

Intelligent SME

SME DIGITAL

Online brand communities (OBCs) have increasingly gathered the attention of marketers as they can generate several positive outcomes for brands. An online brand community is a specialized group of people who come together in online environments with a shared interest (usually a brand, a brand category, or a particular web page).

These online communities become a space where consumers share ideas, feelings, and opinions about a product or a brand.

In this article, we will examine this phenomenon from an SME perspective as we believe that understanding how these communities work can also be beneficial for small businesses.

What’s the hype with online brand communities?

In today´s digital world, consumers have developed a strong need for communication between brands and other consumers. A quick Facebook search through Fan pages and Facebook groups will result in hundreds of these communities: from fashionistas sharing their latest findings to foodies discussing their passion for new culinary adventures.

Online brand communities are valuable to SMEs as they provide a direct channel of communication between consumers and the brand. Particularly in the context of SMEs, which operate with limited marketing budgets, engaging with consumers and potential customers through online brand communities can be a sensible marketing strategy

Consumer typology

The feeling seeker Consumers like to interact in communities because of how that makes them feel, both regarding interaction with the community and with the brand. When affective motivations are driving the interaction with the brand community, it means that consumers are looking for fun, thrill, and entertainment.

The brand-lovers Consumers driven by genuine love for the brand are usually hard-core followers. Just like in human love, this sometimes can be irrational and mainly driven by emotions. Brand lovers like to interact and speak up for the brand because they just can’t stop thinking about it.

to drive traffic to their website or brick and mortar shops.

Despite the marketing potential of brand communities for SMEs, it is important to be cautious when approaching these environments, especially since they were initially thought for consumers only. SMEs need to understand that for many online users, brands can quickly become that uninvited friend that crashes a party and ruins the mood of the party by constantly talking about themselves and not letting others take real value from the interactions occurring in the community. In order to derail any negativity towards the brand, marketing managers, and business owners need to understand the motivations behind consumer interaction in these types of communities and engage smartly.

A typology of consumers in online brand communities There are different motivations for consumers to engage in online brand communities. However, research into consumer behavior has identified six primary motivations to participate in online brand communities. Based on these motivations we could classify consumers into six categories. Keep in mind that these consumers change hats between these typologies depending on the context, and the product involvement (e.g. expensive vs. daily use products).

Examples of how brands have tried to engage with this type of consumer A good example of this could be a recent post by the team from The Walking Dead UK. They decided to post a 360 video of zombies in a forest. What better way to keep your community entertained and feeling thrilled than being surrounded by zombies! Consider posting content that is both entertaining, and that can generate an emotion from your community. It feeds into the need for fun and thrill within the online community.

An unusual example of this can be the GAP logo change in 2010. Brand-lovers of the company flooded social media to ask the brand to change it back.

Unintentionally, the GAP changed something that was meaningful to its consumers, and they actively engaged to get it back. Brand lovers feel that need of connection with the brand. Consider posting content that allows them to connect with you at deeper levels. Keeping an eye on social media channels to identify what people are posting about your brand can help you identify how to connect with your brand lovers and device ways to give them more of that.

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Intelligent SME

SME DIGITAL

The serial sharers This type of consumers become members of your community because they are interested in sharing, connecting and helping others. They love to share engaging content. Also, they are looking for likeminded discussions and seeking assistance from the brand.

The thinkers Some consumers spend more time thinking about the brand and their benefits. This type of users tends to be part of an online community to be sure they are getting the best by comparing all the available options.

The pragmatics These consumers are looking for the latest information about your brand and its goods and services. They are in search of practical benefits from the engagement in the community, and this can be in the form of promotions, discounts or unique information about the product.

The social These consumers are keen to be perceived or associated with the brand or positive causes related to the brand. Therefore, they tend to share brand content on social media if they can perceive a positive social value in it.

It is important to keep in mind that motivations to engage in online communities can vary depending on context. For example, exploratory research conducted by digital marketing and design consultant Marimar Portilla in the context of fashion and luxury brands has found two additional types of consumer motivations in this particular context. Her findings suggest that consumers are highly inclined to engage with OBCs when they own a branded product. It makes consumers feel an increased sense of belonging to the brand and the brand community, both online and offline. An example of this would be what is already happening with some luxury brands, where lower priced items are sold and this in turn increases the sense of belonging to the community. SMEs selling luxury or fashionable products could change their marketing mix to facilitate ownership of branded product, and this could potentially increase the engagement and advocacy of those

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Praising the members of your community, who usually help other members is a good way to keep them engaged. Let them know that you, as a brand, are not indifferent to their efforts. Generate content that can help others and they will help you disseminate it.

Explanatory videos or infographics can be a good way to catch the eye of serial sharers, plus algorithms in search engines and social networking sites love this type of content too; so they tend to display it first.

If your product is of high involvement like a smartphone, expensive gadgets or a house, it is very likely that you will have many consumers of the ‘thinker’ type. Consider posting informational content that highlights some benefits, stats, or numbers associated with the product or service that you are selling.

In this case, the content should help consumers know about the latest news of your product. Asking them to engage with your company for a realistic and tangible outcome is an excellent way to reach them. A great example is Uber, which provides free rides to their members by asking them to refer a friend.

A good example is Michael Kors’ new campaign to stop the hunger. It asks consumers to buy a special product and share a picture on social media wearing MK´s t-shirt to support the cause.

consumers both online and offline. The research also found that ownership contributes to increasing level of desire for new products. Hence, consumers’ future purchase intention also increases.

Another important motivation for consumers to engage with OBCs is inspiration. In many cases, consumers’ intention to engage with these communities is underpinned by the need to gain inspiration for their daily lives through designs, ideas, and trends posted by the brand. Also this motivation is highly associated with future brand purchases as the consumers are looking for new products or services.

Tips to build and manage a successful brand community online • First of all, it is imperative for brands to identify and understand the motivations of their consumers to engage

December 2016

Intelligent SME

SME DIGITAL

with their OBCs. The typology of consumers outlined in this article should be a good start to increase this understanding.

• The life of an OBC directly depends on the enthusiastic participation of the members of the community, and it is vital to keep them continuously involved. The type of content posted in the OBC should convey and contribute to the participation of the community members. Visual content is more appealing and consumers feel more attracted to inspirational videos, picture and illustrations. Also, through inspirational content community members tend to perceive a stronger connection with the brand.

• Community managers should create original and visual content that shows consistency with the brand identity. This factor represents a challenge for any brand, as misperception regarding communication between online and offline brand communities may dilute the strength of the brand associations.

• One of the most relevant factors to succeed is to update the OBC frequently and to post new content regularly to gain consumers’ attention and engagement.

• Finally, it is important to strategically manage the development of negative comments about the brand as it

may cause brand equity dilution. It represents a delicate task for brand managers because community members have the right to share their opinions and ideas openly.

Marimar Portilla (@mapoir) is a digital marketing and design consultant. Her experience highlights the development of commercial brands, publicity, public relations and the implementation of social media marketing. Currently, her research focuses on consumer engagement in online fashion brands communities. She aims to contribute to the understanding of consumer behaviour in the digital world.

Dr Rodrigo Perez-Vega (@rpvega) is a Lecturer in Marketing at Henley Business School. He specialises in digital marketing, social CRM and social media marketing. His research focuses on how to make branded social media presence more engaging for customers. He aims to bridge the worlds of marketing science and practice in his blog “A scientific approach to digital”.

December 2016

Intelligent SME

SME FINANCE

Financing & FundingFacing SME Challenges Sandi Saksena sheds light on some of the challenges faced

by SMEs and entrepreneurs in the UAE and how you can be prepared for them.

Read any business page of UAE publications, and you will find endless articles like: “Banks in the UAE are working together to try to stem the number of small business owners fleeing the country with unpaid debt, a trend that has already reached around AED5 billion ($1.4 billion).”

"We want to take coordinated action on risk management," "The idea is to allow the customer to pay for his debt and stay in town if they have a good intention. If they don't have a good intention, then it is no good (the bank) spending time (with them), it doesn't help." UAE Banks Federation chairman Abdul Aziz Al Ghurair.

The biggest challenge for the development of SMEs in UAE is the availability of finance. According to the research

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of Abu Dhabi Council for Economic Development, 67% of entrepreneurs state that the basic deterrent in setting up their business was the lack of availability of loans and credit from the banks they approached. Banks are reluctant to provide funds to new businesses as there’s a high risk of failing, and there is no revenue generation to service any debt.

Lenders have started conducting more exhaustive checks on owners in their home countries, identifying defaults and legal cases involving the business owners. It can be done online as well as by agencies. These checks on the borrower’s true personal net worth (owners tend to inflate their net worth in statements) is a recent step, in the past, these verifications by lenders/ banks were not possible.

December 2016

Intelligent SME

SME FINANCE

Access to finance is typically identified as a critical constraint. While financing is almost always a challenge for SMEs, the difficulties are often intensified by the expatriate status including lack of collateral, property rights, regulations, laws, and customs. Other hurdles to entry and business growth include access to education, training, cultural barriers and infrastructure-related challenges.

Realistically, if you are approached by a nascent SME with a well-written business plan and no track record, would you really lend that SME money? Would you do additional due diligence on the business model and on the genuineness of the counterparties that the borrowers deal with? Would you not look at business continuity plans (if any), checks and balances and financial discipline?

Several businesses have difficulty borrowing or securing loans and getting paid by their clients; yes it’s a vicious cycle which has the domino effect. As the economy of the country improves, we start making expansion plans by hiring, moving to better offices and taking on more expenses. SMEs call it investing for the future. Somewhere along the line caution is abandoned and replaced by excels sheets that show projected growing profits based on contracts and assignments. At best, these are hypothetical as no real money has been received and/or paid out.

The hurdles of securing funding and/or financing are: • • • • •

Limited or no credit history Incomplete or missing financial statements Limited savings Lower and more uncertain profitability ack of collateral

These are major challenges. To secure credit, you, the SME will be asked to provide collateral which banks or lenders are not familiar with and show the prior repayment track record of individual borrowers where there is no credit history. In the UAE, as an expatriate, SMEs frequently lack adequate or sufficient collateral owing to legal barriers such as inheriting property or owning property. Other nuances include sectorspecific factors wherein there are no physical assets to collateralize as many are services oriented businesses such as Training, Health and Nutrition and Human Development, which by nature are intangible. Lack of savings is another issue because SMEs tend to invest and allocate all their savings to start and run the business to nurture it until it begins to generate income. In addition, you may have no previous business history which suggests no track record of competence.

So what do you need to do besides focusing on accessing the money, enthusiasm, self-confidence, and attitudes? You need to educate yourselves to understand what the lending options are and what to do to build a credible and viable loan application. Learn what type of funding is best for your particular industry factoring in the age of your business, the appropriate amount you require and most importantly, the way this debt will be serviced.

As crowdfunding has become such a successful source of financing for small business owners, it is important to introduce and promote this platform as an alternative lending source here in the UAE.

Due Diligence, Risk Management, Audited Financial Reports, Proper Legal Structure and Documentation are just the tip of the iceberg of standard requirements that any potential investor or lender will look at. Rest assured they would refer your proposal to a person who deals with such matters on a daily basis to verify and determine whether you are suitable or not. (See Box)

Jack of all trades, master of none!

Another factor which acts as an obstacle to the growth of the SMEs is the lack of management skills of the entrepreneurs.

As the businesses grow, specialized skill sets are required to manage the operations to retain/manage the employees and the financial health of the business. Entrepreneurs usually do not have the requisite management capacity to tackle various issues and to adapt using innovative strategies to grow the business further and increase performance.

So it is important to know what investors and lenders look at when assessing you and your business and how you should build your financial profile which you present to them; put the best foot forward when applying for funding.

You also need to start thinking about other ways you can open up entrepreneurs to access capital and work to execute these actions.

As crowdfunding has become such a successful source of financing for small business owners, it is important to introduce and promote this platform as an alternative lending source here in the UAE. Having said that, SMEs still need to work on the core requirements and criteria to qualify for the crowdfunding platforms.

The onus is on the SME to meet the requirements, so look at this very basic list and use it as a start to assess your business.

www.theintelligentsme.com

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December 2016

Intelligent SME

SME FINANCE

LEGAL

BRANDING:

• Have you incorporated a company?

• Are you a free zone company or a Dubai Economic Department Limited Liability Company?

• What activities does your company’s license permit you to conduct?

• How many shareholders do you have in the company?

• Do you have a shareholder’s agreement?

• Do you have any counterparties you deal with as part of your business?

• Do you have any contracts with these counterparties to protect your interests and revenue you receive from them?

The following inquiries apply to all the key brand names possessed by the company:

FINANCE: • Do you have audited financial statements for the last three years?

• Does the company use target costing to achieve profitability target?

• Do you a finance manager?

• What are the key accounting policies?

• Are there any licensing or other fees? And what is the continuing fee (if any)?

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• List all brand names that are owned by the company.

• What has been the branding strategy for the last three years?

• Does the company have a long-term plan to support the brand of each product?

• Is there a quality assurance related to the branding?

• Are there any legal fees needed to stop brand encroachment?

• Does the company have the rights to the name(s) in the GCC? • Provide evidence of ownership and registration of brands, trademarks, and other company-owned intellectual property.

PRODUCT: • Who are the company’s two biggest competitors?

• Who is in charge of developing new product lines?

• What is the contingency plan for a major breakdown/ cancelation/not awarded contracts?

SALES:

RISK MANAGEMENT:

• How long has the company had relationships with its key customers?

• How profitable are each of the key customer accounts?

• Do any customers require a disproportionate amount of servicing, or require special terms and conditions?

• Is there a history of complaints from any client? How profitable are the clients who appear to be the most dissatisfied?

• Who are the customers who have stopped doing business with them in the last three years?

• Are there any formal written contracts with the significant customers?

• Has the company stopped or discontinued any product or service? Why? • Are there any outstanding proposals, bids, and offers pending award?

• What is the company's market share?

• How does the company primarily use incremental product improvements, or engage in significant new products development projects?

• How much money is invested annually in development as a proportion of sales? Is there a product development plan?

• Summary of insurance cover details and a copy of each insurance policy maintained by the company.

• Details of insurance claims history, accident records, customer or employee compensation claims (for personal injury or otherwise) or similar data.

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*Listing Provided Courtesy Echelon Advisors and Management Consultants

Sandi Saksena, an ‘Empowerment Officer’ with 20 years of experience leads an allfemale team of financial counselors at Nexus Insurance Brokers. She also heads the ‘Family Matters’ division at Echelon Advisors and Management Consultants and is a regular contributor to the media on topics related to personal finance and women empowerment.

Business Software that Inspires Epicor Software Corporation is a global leader delivering inspired business software solutions to the manufacturing, distribution, retail, and services industries.

Epicor business software solutions help customers effectively and efficiently automate and streamline their essential and industry-specific business functions, inspiring them to focus on their core, revenue-generating activities, deliver value to their own customers, and grow.

Inspired Businesses turn to Epicor Software.

To learn more: +971.4.3913730 marketing.mena@epicor.com www.epicor.com/mena

Business Inspired™

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| 40 years of experience

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4,000 employees

Copyright Š 2012 Epicor Software Corporation or a subsidiary or affiliate thereof.

Epicor and the Epicor logo are registered trademarks and Business Inspired is a trademark of Epicor Software Corporation

December 2016

SME FOCUS

Intelligent SME

The Life-Changing Power of Daily Questions

Dr. Marshall Goldsmith outlines the importance of simple, fundamental questions that have the power to transform the objective and purpose of an individual.

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Intelligent SME

SME FOCUS

A

fter 35 years as an executive coach, I have learned one key lesson that has near universal application: no one, no matter how determined or passionate, can change his or her behavior without structure.

You might wake up every morning, sure that you will spend your day listening better or watching less television (or whatever your goal happens to be). But without external structure – a person or a plan to guide you – it will be almost impossible to stay on track. Willpower alone won’t keep you from flipping on the TV or tuning out while people are talking.

That’s because we chronically underestimate the difficulty of making even small changes in our behavior, as I argue in my book, “Triggers: Becoming the Person You Want to Be” (with Mark Reiter, Crown, 2015). A trigger is any stimulus that reshapes our thoughts and actions. In every waking hour, we are being triggered by people, events, and circumstances that have the potential to change us. These stimuli are more powerful than we realize.

Triggers can be good, spurring us on to achievements large and small. They can also be bad, luring us away from meeting our goals. The smell of bacon wafts up from the kitchen, and we forget our doctor’s advice about lowering our cholesterol.

Our colleagues work late every night, so we feel obliged to match their commitment. Before we know it, we’ve missed one of our kids’ baseball games, and then another, and then another. Our phone chirps and we glance at the glowing screen instead of looking into the eyes of the person we love.

Structure is our best defense against the triggers in our environment. Creating a structure is a big part of what I do as an executive coach, helping successful leaders achieve positive lasting change in behavior.

My process is straightforward and consistent. I interview and listen to my clients’ key stakeholders. These stakeholders could be their colleagues, direct reports or board members. I accumulate a lot of confidential feedback. Then I go over the summary of this feedback with my clients. They take ultimate responsibility for the behavioral changes that they want to make.

My job is then very simple. I help my clients achieve positive, lasting change in the behavior that they choose as judged by their chosen key stakeholders. In other words, I assist them to become the person that they want to become. If my clients succeed in achieving this positive change – as judged by their stakeholders – I get paid. If the key stakeholders do not see positive change, I don’t get paid.

Our odds of success improve because I’m with the client every step of the way, telling him or her how to stay on track and not regress to a former self. While personal coaching is tremendously effective, it’s not possible for everyone.

But anyone can use a basic structure to achieve behavioral change. Over the course of my career, I have created and refined structures that work. One of the most efficient is the Daily Questions. I teach it in my seminars, recommend it to my clients – and I use it for myself.

My ritual goes like this: at a pre-arranged time, I get a phone

call from a person who I have hired solely for the purpose of listening to me report my scores on a brief self-test. The questions (43 of them, at last count), which I wrote myself, function as a simple checklist of my life’s top priorities. They ask whether I’ve done my best to exercise, set goals, have positive interactions with others, etc. My caller listens politely, perhaps offers a few general words of encouragement and hangs up.

This process keeps me focused on becoming a happier, healthier person. It provides discipline I sorely need in my chaotic working life as a coach, teacher, and speaker, which involves traveling 180 days out of the year to countries all over the globe. At the seminars I teach, I encourage students to try it for themselves by writing their own questions. Most of them are eager to participate. To date, almost 5,000 have completed an online version of the daily questions.

When I encounter a skeptic, he or she usually asks why I need to pay another person to remind me of such simple things. Shouldn’t I, a fully functional adult, remember to exercise and be a good husband and father? I even have a question about whether I flossed my teeth – surely I don’t need a reminder for that! But I do, and so do we all, although we don’t always like to admit it. Perhaps because our culture lionizes independence and willpower, we tend to ask for help only for complex or very difficult problems – things we believe we can’t possibly be expected to know already.

So why test me on these basics day after day? Not only that, I merely ask whether I’ve done my best to achieve my goals – that’s a pretty soft standard. The only scale of success is, “Did I try?” It sounds simple, and it is. But just because something is simple doesn’t mean it’s easy. In fact, the daily questions are a very tough test, one of the hardest there is.

But the people who stick with the process reap tremendous rewards – not least, knowing that they have done their best to live their values, every single day.

Dr. Marshall Goldsmith was recognized

by Thinkers50 as the world’s #1 leadership thinker and #1 executive coach. His latest book, “Triggers” was a New York Times and Wall Street Journal bestseller, as well as an Amazon Best Business Book of the Year.

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INFOGRAPHICS

WHY GO SOCIAL?

What is the value of having a social presence online? Here are a few reasons small businesses should be part of the social media scene.

NEW CUSTOMERS

78%

of small businesses now get at least one quarter of new customers via social media

61%

of young people refer to social media to decide where to go when they go out

CUSTOMER ENGAGEMENT

27%

35%

27%

27% of Americans check their social networks several times a day

35% of Americans check brand pages regularly as part of their social media activity

27% of Americans check their social networks several times a day

REACH

200 MILLION 1 BILLION 343 MILLION 225 MILLION 50

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Twitter has 200 million active users.

Facebook boasts 1 billion active users.

Google+ is gaining ground with 343 million active users LinkedIn has 225 million active users

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Intelligent SME

INFOGRAPHICS

A LOT OF OPTIONS

SOCIAL HABITS OF FACEBOOK BRAND FANS 70 63 56 49 42 35 28 21 14 7

0

Research Products Share Information Connect with Brands

Fans

Non-Fans

Facebook fans tend to be super consumers: they spend 43% more than non-fans on average

SOURCES Forbes "Your Business Needs to Get Social, Local and Mobile-Fast" Linkedin Blog. "The Evolution of Linkedin" Marketing Profs. " Average value of a Facebook Brand Fan Increases 28%" "Social Networking: 45% check out Brands' Pages" " Social Takes up to 27% of Time Spent Online" "World Intemet Stats: website, Email, Social Media and More" Media Post. "Online Radio reaches 86 Million Listeners Weekly" Street Fight. "Study: 82% of SMBs Use Facebook for Marketing, 25% Use Twitter" ZDNet "Google+Moves Up to Second Place on Social Networks" 51 www.theintelligentsme.com

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December 2016

Intelligent SME

INFOGRAPHICS

INTELLIGENT ASSETS HELPS GETTING THE RIGHT STUFF TO THE RIGHT PLACE BY.....

2. OPTIMISING FLEET EFFICIENCY INFORMING THE MOST EFFICIENT TRANSPORT, FROM TRUCKS AND TRAINS TO SHIPS & PLANES

1. TRACKING PRODUCTS THROUGH THEIR USE CYCLE

3. OPTIMISING DELIVERY ROUTES REAL-TIME DATA SHOWING GOODS & TRANSPORT LOCATIONS: FASTER ROUTING REDUCING FUEL MINIMISING DAMAGE AND ASSET LOSS

SATELLITE TECHNOLOGY

PRODUCTS, MATERIALS & COMPONENTS CAN BE CONSTANTLY TRACKED

BY MANUFACTURERS THROUGHOUT THEIR USE-CYCLE TO ENABLE A HIGHLY EFFICIENT REVERSE LOGISTICS SYSTEM.

4. TRACKING PRODUCTS THROUGH THEIR USE CYCLE

3.

AN EFFICIENT REVERSE LOGISTICS SYSTEM

DATA ALLOWS ASSET OWNER TO QUANTIFY THE COST AND BENEFITS OF ALL REVERSE LOGISTICS OPTIONS

A TA TA TA TA A

ATA DATA DATA DATA DATA DATA DATA DATA DATA ATA

DATA DATA DATA DATA DATA DATA DATA DATA DATA DATA

DA DATA DATA DATA DATA DATA DATA DATA DATA DA

D D DA DA D D

5. AVOIDING WASTE

..MOBILE TRACKING FOR ASSET OWNERS

6. SORTING RECYCLED MATERIALS

DATA INFORMS WASTE OPERATORS OF HOW TO CONTINUALLY IMPROVE THE SYSTEM AND DESIGN OUT WASTE

MULTIPLE TYPES OF MATERIALS ARE PRECISELY SORTED. READY FOR REUSE AND RECYCLING. INCLUDING INCENTIVE SYSTEMS FOR CITIZENS AND BUSINESSES

SOURCE> World Economic Forum and Ellen MacArthur Foundation, Intelligent Assets-Unlocking the circular economy potential (2016) www.ellenmacarthurfoundation.org/publication/intelligent-assets

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ELLEN MACARTHUR FOUNDATION

S U C C E S S I S A D E S T I N AT I O N

H AV E YO U A R R I V E D ?

WATCHES YACHTS DESIGNER JEWELLERY BOUTIQUE REAL ESTATE GADGETS EXOTIC DESTINATIONS FINE DINING

December 2016

Intelligent SME

RARE & FABULOUS

An Ode to Engineering

T

he Parmigiani Fleurier Bugatti Super Sport watch is a thoughtfully crafted timepiece inspired by the iconography of its namesake, the Bugatti Veyron Super Sport roadster.

The watch features 333 individual components, a Hermes leather strap and exquisite sapphire crystals in an unusual but trademark Parmigiani teardrop shape. A bespoke item, the centerpiece of the watch is, of course, the movement. On the wrist, the time is displayed at an angle of 90 degree, and in homage to the Bugatti Veyron, the open-worked black opaline dial in the centre allows a glimpse of the hour wheel.

Hand-wound with a power reserve movement, the Bugatti Super Sport watch in rose gold is a reflection of exclusivity & style.

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www.theintelligentsme.com

December 2016

Intelligent SME

RARE & FABULOUS

Scent of Enchantment

F

eminine and potent, animalistic yet floral, the Tornade Blond by Christian Louboutin is the scent of love, adventure and enchantment. The iridescence of the fragrance’s spirit is reflected in the color of the bottle. A gorgeous red rose is at the heart of the scent nestled between the delightful notes of violet, cassis, sandalwood and patchouli.

Top notes : Rhubarb, Violet Leaves, Ambrette Signature, Cassis Heart notes : Bulgarian Rose, Jasmine Sambac Absolut, Orange Flower Petals Firnat, Gardenia from Brazil Base notes : Ambregris, Cedarwood, Australian Sandalwood, Patchouli

www.theintelligentsme.com

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December 2016

Intelligent SME

RARE & FABULOUS

Etched in History

I

nspired by the impressive architecture of the ‘Vieux-Laque Room’ in the Schönbrunn Palace in Vienna, the Graf von Faber Castell Pen of the Year 2016 brings the romance, craftsmanship and aesthetics of a major era imbibed in the exquisiteness and expressions of lacquerware. Creating this special edition pens is an intensive time-consuming process culminating in hand-ground plates made from deep black onyx for the platinum variant and 24-carat gold powder lacquered plates for the gold variant. Both editions come with an 18-carat, bicolor gold nib that is run in by hand. The platinum fountain pen is limited to 500 pieces and the gold to just 120 pieces.

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December 2016

Intelligent SME

RARE & FABULOUS

For the Luxurious Traveler

R

eigning English brands, Alexander McQueen and Globe-Trotter, have collaborated to create the most fashionable and exclusive collection of travel cases. The two-piece line includes a 21 inch trolley case and a 13 inch mini utility case, each bedecked with silver studs and riveting, a strong contrast against the deep black color of the cases. The leather straps provide additional security to the larger trolley case and act as stylish crossbody shoulder strap for the utility case. The interior of the cases is lined with McQueen’s signature ivory-and-black skull print while the leather clochette encasing the padlock keys are embossed with Globe-Trotter’s logo.

Made with vulcanized fiberboards, these luggage cases capture the zeitgeist of luxury travelling perfectly.

www.theintelligentsme.com

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December 2016

Intelligent SME

RARE & FABULOUS

Dolce & Gabbana’s biggest store in Dubai

T

he Italian designers are back to Dubai with their largest store in place. The new space is the renovated store at the Mall of the Emirates, which is also their flagship store.

The boutique is now two-storied which makes it the biggest Dolce & Gabbana store in the region. It features the brand’s ready-to-wear collections, their third season of the abaya range, the brand’s only Made to Measure men’s suiting service in the UAE and Sartoria fine jewellery.

Dolce & Gabbana have always been known to celebrate fashion by fusing it with their Italian culture and heritage. Their 2017 spring-summer collection with food-themed prints elevated that success to new heights with inspiring designs and a subtle touch of humor.

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December 2016

Intelligent SME

BUSINESS ANNOUNCEMENT

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BUSINESS BANKING

Help beat the heat with A/C vests this summer Given the challenging summer conditions in the UAE, we have helped laborers by distributing 500 A/C cooling vests at the Al Manar mall extension construction site, managed by Sun Engineering & Contracting.

The specially made vests are designed to reduce the wearer’s body temperature by 5 to 7 degrees for up to 8 hours. They are made of submersible material which need to be submerged in cold water for 5 to 10 minutes. Once the laborers put them on, they start to feel the cooling effect of the vest within minutes.

To learn more, visit our YouTube channel.

Together, we can beat the heat.

For further information on this initiative, please contact us at BusinessBanking@EmiratesNBD.com

600 54 0009 |

emiratesnbd.com |