Ahmed AlRaeesi isn’t an early entrepreneur. A lawyer by profession AlRaeesi has worked in several public and private organisations in the UAE for over two decades. Then he joined his family law firm for a few years before starting his own legal start-up in 2019. From years of experience, he knew what it takes to start a legal business, including various costs to factor in, the right licensing agencies and some essential rules of doing business.
To taste success, start-ups must be patient
One such rule that he stressed is the need to “be patient” while starting a business. “Usually, the first year in the life of a start-up is full of ups, downs and learning. My experience was no different, despite having a legal family business and the associated support. An entrepreneur must be patient during the initial period of starting a business instead of getting worked up about things like not making enough money. It’s more important to follow your passion and do your work so well that business will come through eventually,” AlRaeesi stressed.
He also suggests entrepreneurs and start-ups to build a “solid and dependable support network” to spread the word and help make the right connections.
From investments required to launch a start-up to running the business smoothly, AlRaeesi shared some essential tips on managing a start-up financially.
To begin with, how much investment is required to start a small legal business in the UAE?
A minimum of Dh500,000 investment is required to start a small legal firm in the UAE, although the fund requirement will vary based on every entrepreneur’s needs and goals.
“I self-funded the business with my years of savings. However, if an entrepreneur cannot self-fund, there are several options to seek assistance from. Some agencies such as Emirates Development Bank has developed SME-centric schemes to support young Emirati entrepreneurs. As an Emirati SME firm, we also received support from the Dubai Government (Department of Economic Development) to get our trade license at a cost lower than the market value.”
What were your earliest lessons around financial planning?
“Unlike today when many children are given a monthly allowance, we weren’t given any. Our parents used to budget for all daily expenses, including food, clothing, outings and so on. We got small amounts of money to spend on festivals and occasions. So, growing up, we learnt to value money, especially the need to save for the ‘rainy days’, which stayed with me. Even after starting my own business, I haven’t forgotten this principle.”
How did you account for ‘rainy days’ in your business?
“Since I don’t have any partner or investor, I was careful about keeping aside enough money to cover 100 per cent of the costs during the first two years of operation. This strategy has worked well, especially since many curve balls were thrown at us during the pandemic. Fortunately, despite all challenges, we had a positive first year and ploughed back revenues into the second year. Here I’d also like to add that entrepreneurs should consciously keep personal and business savings separate from one another.”
What are some typical expenses for a legal start-up? How often do you review cashflow?
“We have to account for several things, from rent, salaries and utilities to specific expenses related to a legal firm. For example, based on the chosen location and the space, annual rent could range between Dh50,000 and Dh100,000 on average. It could also be more depending on the budget and the needs of the founders. Opting for a business centre might reduce this expense head while also availing other services that come with the option.
“Initial recruitment is another big expense, which can easily cost Dh30,000 for three employees, including visa, labour charges and medical insurance. And every legal firm needs to employ at least three employees, a legal counsel, a legal assistant and a PRO (public relations officer). Then there are other smaller expenses, including translation services, printing documents, maintenance of the office space and so on that differ from one firm to another.
“Regarding reviewing cash flow, in my business, I’ve colleagues who handle daily expenses and monitor spending. At the same time, we take a close look at finances, incoming and outgoing, on a quarterly basis to evaluate if we are on track. If not, how we can re-evaluate our financial plan. But so far, we’ve been on track and haven’t faced any significant financial challenges.”
Your message to fellow entrepreneurs looking to launch legal start-ups.
“The UAE’s legal system is unique, advanced, active and constantly evolving. Importantly, this sector significantly supports the country’s economy. It’s full of opportunities for knowledgeable legal professionals.”