Emirati entrepreneurs Alia Hussain Lootah and Noora M Bin Kalban share how they learnt key business management skills on the job such as financial planning, book-keeping, accounting to managing operations, logistics and people.
“Neither of us has a business management degree. We didn’t even know the basics of finance management until we started working on our business plan for a community art space ‘Medaf Studio’. What we had was passion and a deep urge to plug a gap in the market at the time (in 2017) with our start-up by creating a space that specialises in multi-disciplinary art practices. Rest of it, from creating a business model to financial plan, accounting, cash flow management we learnt everything on the job,” the co-founders shared.
As their start-up celebrates its fifth year since inception this month, co-founders Alia and Noora spoke about how they have learnt key skills such as mapping out and controlling expenses, negotiating pricing, building the right partnerships during this journey.
Did you receive financial and other support while setting up your business?
“A huge support came from Dubai SME (small and medium-sized enterprises) in the form of a loan through the Mohammed Bin Rashid Fund for SME. That accounted for 80 per cent of the capital required to start the business, while we put together the remaining 20 per cent. We also got our trade license at a subsidised rate. In addition, advice from our families and suggestions from fellow entrepreneurs were crucial. One thing that we want to mention is the willingness of the UAE start-up community to support first-time founders like us, which was truly encouraging.”
What are some finance management skills that you both learnt on the job?
“It’s one thing to have an idea but implementing it requires understanding various aspects related to running the business. Acquiring finance management skills was perhaps our biggest learning curve. We started out by doing a deep research-based [price] benchmarking of what was available in our space regionally and globally to carve out our own cost model. We also learnt the importance of understanding and managing cash flow. Paying rent and salaries, making purchases and keeping track of income are all crucial for the survival of the business. We have made it a practice to review our automated cash flow statement once a month or more. We have also acquired skills such as negotiating for a better deal. Since the world is so connected, it’s possible to find anything and everything at a lower cost. We have realised the importance of expanding the supplier base to get the best price possible. In addition, by doing the groundwork on our own such as visiting the licensing agencies we learnt a lot about the components and costs of running a business.”
Do you both take a salary from your business?
“While we have allocated salaries for ourselves, instead of taking it we have reinvested it in the business. Besides carefully planning expenses, this is one of the big reasons why we broke even in less than two years [by the beginning of 2019]. This also helped us to protect, sustain and grow the business. Today our business is self-sustaining as we plough back at least 30 per cent of earnings from the business into the business.”
It’s one thing to have an idea but implementing it requires understanding various aspects related to running the business. Acquiring finance management skills was perhaps our biggest learning curve.
How important is it to monitor spending and allocate resources towards customer acquisition?
“Since we were first-time founders and decided to enter a segment that we didn’t understand very well at that time we were extremely cautious about our spending patterns. Like any other business, seeing return on investment was crucial but even more important was to scale up the business. By monitoring our spending closely, we have been able to keep our operating expenses low. Since we are a customer-facing business marketing is an important area of spending. Initially, we didn’t spend a lot on marketing and relied on word of mouth but now we have increased our budget. Currently marketing activities account for 7 per cent to 10 per cent of our monthly expenses. Importantly, we have deployed a cross platform marketing strategy including social media activities, YouTube videos and podcasts, among others to reach our audience through their preferred channel.”
Have you made any mistakes during the past five years? What lessons have you learnt from them?
“Making mistakes is one of the realities of any entrepreneurial journey. Towards the beginning of our journey, we collaborated with another small local business that ran a café in our space. Soon we saw that facing the struggles of being a small business they couldn’t pay for their own expenses, often defaulting payments due to us. This experience taught us the importance of building the right and synergistic partnerships. Another thing that often weighed us down in the initial period was the inability to anticipate expenses accurately. But over time we have learnt to categorise expenses into different brackets such as sales, marketing, operations and so on to balance out outflow and plan growth with more visibility.”
What tip would you both offer to first-time founders?
“From our experience we can say that there are numerous opportunities out there. We must find one that aligns with our passion and goals. It is also important to trust your gut; if you feel strongly enough about an idea you should implement it. Don’t stress out about getting every detail right, it is possible to learn things as you go. We learnt almost everything on the job. In addition, don’t feel shy to ask people [they could be family, friends, fellow entrepreneurs] for help to understand the business landscape before diving in.”