Trust and talent: the keys to success

Many economists say the route to recovery from the downturn will be through growth in small to and medium-sized enterprises (SMEs).

Entrepreneurial groups from around the world certainly have their eyes on the many opportunities within the Middle East. In the past two years I've received countless emails requesting an insight into setting up a business in the UAE.

I don't profess to be an expert in this field; there are of course organisations such as the Mohammad Bin Rashid Establishment for SME Development that can provide more structured advice. However, I thought some experiences from a business owner that has survived 17 years in the region might provide a helpful perspective.

First off, don't get carried away by the initial enthusiasm everyone has for your business idea, product or service. The UAE can be one of the most encouraging countries when you first go out and seek feedback on bringing a product to the market.

Everyone is optimistic and will listen and offer encouragement. Yet, it does not mean that they will buy from you.

I've worked with small businesses that are struggling after one or two years because their revenue does not match their initial forecasts. They overstretched on office set-up and personnel expenses.

I strongly believe in starting small, in carefully controlling costs, and in building the business as deals are actually signed. The key is to build trust within the business community. You'll not succeed if you want to make a fortune in a short timeframe. Those days are long gone.

Serious grit

You need to put in some serious grit, build relationships and networks and prove that you can genuinely deliver. Even if you are a part of a larger international organisation and setting up a branch here, I recommend a more conservative approach.

With trust being central to clients signing on the dotted line, a good approach is to look for talent with experience in the region. If they already have a network or proven track record, it can significantly accelerate your start-up.

Making the right people decisions in the early stages will make or break the business — as can understanding the culture of the region.

I recently met the founders of two SMEs in the service industry, which both started in early 2008. One is flourishing; the other recently shut up shop.

I asked the owners, independently, what had happened over the past two years. Both had focused on the people they hired in the early days. So what went wrong for one?

The company that wound up operations had recruited a number of highly qualified professionals from the UK. They started with some good prospects, but believed they had missed the boom time and were struggling to realise the deals.

Salary overheads were high and the marketing expenses too steep to try and get their name known in the market. It just wasn't a sustainable set-up.

The second company, which continues to grow, made some local hire decisions in the early days, with performance incentives rather than huge salaries. They still attracted qualified professionals, but the difference was they knew the market and the culture and had a network of clients.

The importance of building trust does not mean clients in the UAE are not attracted to the latest, greatest thing — because they are. It's been a personal bugbear of mine that they will often bring in consultants or suppliers from overseas because it's deemed to be more up-to-date and therefore better than something that is already here. Despite this tendency I believe that in the service industry, it is the people that ultimately make the difference. 

The writer is the CEO of biz-group, a corporate training, teambuilding and business strategy consultancy.