Dubai: For Lithuanian expat Erika Blazeviciute Doyle, a regular habit of setting aside at least 8 per cent of her monthly income helped her launch an online retail business in the UAE.
Doyle, who lived in the UK for 15 years with her husband – an Irish businessman, was a public sector employee working at the Lithuanian Embassy in London when she started consistently saving at least a portion of her income.
In 2020, she set up an e-commerce platform ‘Drink Dry’, a UAE-based premium non-alcoholic drinks marketplace. It soon expanded into a multi-channel sales business, now selling to retail outlets, restaurants, hotels, cafes and also directly to consumers from their e-store.
How the journey of an “accidental” entrepreneur began?
“I enjoyed working in the public sector, and having my own business was never a priority for me. I left my career to have my children and have accidentally fallen into the world of business.
“When we moved to the UAE, none of the alcohol-free drinks I was used to having in the UK or Europe were not available here, and this brought ‘Drink Dry’ into existence.”
Lesson #1: First find a niche in the marketplace and focus on building a unique brand
The sole purpose of the business was to build the non-alcoholic drinks segment.
“When I first started ‘Drink Dry’, I did not know much on how to successfully manage and achieve profitable ‘Profit & Loss’ (P&L) statements. A lot of the jargon used in business was alien to me – ‘management accounts’, ‘P&L statements’, ‘margin reports’ etc. But I did not get the fears to come in the way.”
Management accounts are financial reports produced for the business owners, generally monthly or quarterly, normally a Profit & Loss report and a Balance Sheet. In principle they are similar to year-end accounts but are less formal and are personalised to the user's requirements.
A Balance Sheet is a financial statement that reports a company's assets, liabilities, and shareholder stakes. The balance sheet is one of the three core financial statements that are used to evaluate a business. It provides a snapshot of a company's finances (what it owns and owes).
A margin report shows the margin, or profit margin, is a percentage that's used to measure the profitability of your business after expenses have been deducted from revenues. While revenue provides a good preliminary indicator of how well your business is performing, to determine actual business profit, you must consider your expenses as well.
Her initial business set-up cost was around Dh100,000. She paid Dh15,000 to get a trade license, paid the local sponsor fee, obtained an office on rent for around Dh25,000 per year and managed funds to get the essential IT requirements in place.
“I used my savings for these costs, and it was scary because I did all this right in the middle of the global pandemic when everybody was telling me to lay low and wait. However, I just knew that it was the right time to act because I wanted to be up and running for when things were going back to normal.
“We have a single source of funding from a private investor, who operates in the drinks industry and put the rest of the funds in the business, turning our venture now into a successful business model.”
Lesson #2: Save for the long term, don’t chase any quick wins
Ever since Doyle had finished university and started working, she regularly tried to save some money. “I always successfully achieved a minimum of saving an 8 per cent from my salary each month, and this percentage varied from time to time going up to 15 per cent and sometimes even 20 per cent of my total earning when I earned more.
“I saw money was very sparse in my growing up years. Both of my parents have worked two jobs to make ends meet. We lived from pay cheque to pay cheque, so saving was not an option. However, my parents ensured to invest well in me and my sister’s education.
“We never went on any family holidays. What I took from this into my adult life is always to have a long term approach to things and not be chasing any quick wins. Combine this with a strong work ethic, and you have yourself a superb recipe to financial success.”
I used my savings for these (business) costs, and it was scary because I did all this right in the middle of the global pandemic.
Lesson #3: Managing steady cash flow is vital for smooth business operations
As the saying goes, ‘turnover is vanity, profit is sanity, and cash flow is reality’; she considered this is more accurate for start-ups. “We are a product-based business, so the capital required was always going to be higher than that of a service-based start-up.”
Their business requires importing all of their products from Europe, UK, and in the current situation, getting space on the ship for transporting goods has been challenging. They developed a planning approach to have enough stock on hand at any given time.
“We hold at least 2 to 3 months’ worth of goods on hands, so proper cash management is needed to ensure a steady flow of new goods happens on time. We ship anywhere from 4 to 6 months of goods; we do not want to run out of stock, so a lot of our capital is used in holding the stock.
“Therefore, we monitor every week our fast-moving and slow-moving goods, to check if we are not overstocked on any goods. If so, we then look for a different sales channel, find partners that have access to different markets or sales channels where we currently don’t operate. This way, we are trying not to hold too much stock on slow-moving goods.
“Moreover, we manage our cash flow, keeping our aged debt report up to date at any given time; that is the money people owe us. We ensure they pay us on time. Have a clear structure and system in place to make sure that our customers adhere to payment terms and allow us to grow and re-invest.”