Dubai: Living within her means and saving to meet unexpected costs was a habit British (Welsh) national Laura Manning, 42, naturally picked up when she was growing up in the UK, after having been raised by a single parent who struggled to make ends meet.
"Money was very tight, and I wasn't simply given things on demand but had to earn them. I saw my mum working extremely hard to ensure we had the basics, which motivated me to work hard to ensure I could have more luxuries," said Laura.
Going on to pursue an educational degree in business studies, she later worked at Indian conglomerate Tata Steel for 15 years at its UK operations before moving to Dubai in 2018 and now running her own tea blend brand.
Money was very tight, and I wasn't simply given things on demand but had to earn them
Experience turning around a loss-making product
"When I worked for a distribution business for Tata Steel in the UK, I took a loss-making product category, using everything I had learnt to turn it into a profit-making product in one year,” she added, when asked about her prior experience in starting a business from scratch.
“I did this by implementing a clear pricing strategy, understanding the actual product costs, being transparent with the sales team and customers." This was the first lesson Laura learnt during the course of her work career, which later turned useful when starting her business.
Business Lesson #1: Study product costing thoroughly for a firm grip on a business’ finances
During the course of her work career, like the above, Laura saw many such blunders being made because sales managers did not fully understand the product costs, and as a result, their pricing proved fatal for the business.
“When you don’t understand the actual cost of your product, you cannot make informed decisions, and by giving customers too much discount, you end up losing money,” she explained, when stressing on the need of studying up on ways to make money as an entrepreneurial pre-requisite.
What led you to start a tea brand in the UAE?
In the UK, Laura felt she had more choices in the range of tea available in supermarkets back home. So, in 2019, she put together all her savings and launched a retail business to supply a diverse range of tea blends. "I invested around Dh500,000 initially to start the tea brand,” she said.
“Most of this went in product and packaging, logistics and marketing, while some upfront costs were getting the correct trade license, customs registration, Dubai Municipality product and label registration and import permits, insurance, and bank account set-up and deposit requirements.”
Business Lesson #2: Save initial start-up costs by learning new skills, doing some tasks yourself
When starting out as an entrepreneur, Laura made it a point to save up on some costs by learning to do some jobs herself on a limited budget. “I became creative and did anything I could do on my own to get the business started," she said.
"I used Canva graphic design platform to create everything from the company's logo, brand guidelines, product labels, company bio and brochures. I upskilled and took courses via Shopify on creating a business website (our basic version served us well for two years). I also learnt how to capture simple product images on my phone and how to market products on social media.
“As the business grew organically, I slowly started to outsource work. As a result of this organic growth, in July 2020, we secured our first round of funding via an angel investor of Dh1 million, which enabled the brand to increase its portfolio of products and launch a range of plastic-free teabags. The investment also helped us grow our team and reach new markets."
I invested around Dh500,000 initially to start the tea brand
What were some challenges you faced when starting out?
Being new to the region, navigating the business requirements, particularly the permits, registrations and trade licenses needed, was some of the challenges Laura experienced when starting out, she said.
"We did the whole set-up in-house, learnt much, and saved a few thousand dirhams – when you add fees for consultancy advice, the license set-up, Dubai Municipality registrations etc. A lot of information is available for free, and many are willing to help, so business newcomers can invest their time in understanding the requirements and do it themselves.
"For instance, there are many free zones in the UAE to choose from, or you can opt for a mainland license through the DED (Department of Economic Development). The DED Café provides free advice in a café environment. I visited the one in Jumeriah, where I found all my answers at no cost."
What were some the costs that went into your start-up?
Initially, Laura set up in Fujairah Free Zone, with a license cost of around Dh9,500. "I can’t remember exactly, but I think we saved Dh1,500 to Dh2,000 going direct instead of getting someone else to review our business and the options out there.
“Then we took a mainland license with the DED and an office space in TECOM, which saved us a significant amount on our license fee. Our license cost around Dh6,000. If we used an external consultant, we would have paid an additional Dh15,000 as a one-time fixed fee for setting up in the mainland," she added.
The other costs were for the trademark, for which Laura paid Dh8,700, but using someone else to do this would cost around Dh10,000. Setting up my website saved Laura Dh15,000, and the skills she learnt doing this still help her business today. “For instance, I can change banners, teach my team how to navigate Shopify, add products, send out newsletters, and run promotions etc.
"Moreover, registering products and food label assessment cost us Dh7 per product going direct; using a third party, the price was Dh50 per product. We have over 150-plus products, so this saved us Dh6,500-plus. We still register and submit label assessments in-house."
Business Lesson #3: Build connections with government departments to stay on top of costs
When running a start-up, Laura also believes in building connections with the relevant government departments so that you can keep on top of the requirements as an entrepreneur.
“Also, prepare a spreadsheet comparing the set-up costs for free zones and the mainland; this way, you can rank the options based on your requirements and the price. And lastly, create a checklist of approvals and licenses you need for your chosen product or service," Laura added.
Additionally, she said one must always know where the money is, gauge actual business expenses, and prepare for the ‘down cycle’.
Knowing how to prepare your business for a ‘down cycle’
Laura explained how she prepares her business for a ‘down cycle’ by first preparing an annual plan that details what the business aim to sell and at what price, and where it wants to spend the money.
“Our business P&L (‘Profit and Loss’ statement that compares the total income of a business against its debt and expenses) has a percentage target under each category, e.g., staff costs, marketing etc., and we review this monthly to ensure we are on track and sticking to our annual plan," she added.
"We factor into this annual plan the cycles we see throughout the year in our industry, and we plan around this - stocks, staff, events etc. The mind-set is to operate within the means and not overspend. And I always have a tight grip on the finances."
How differently do you treat personal vs. business expenses?
When it comes to financial decisions in general, Laura has over time learnt to be realistic and sensible not only when it comes to her own savings and investments, but also her business’ cash flow.
"There is a difference between things you need and want, and sometimes it's good to wait to buy something you want because you may discover you don't want it after all. In business, I try not to rush my decisions, especially money decisions. I like to take my time, but once I have made the decision, I am in 100 per cent, and I get on with things,” she added.
Laura’s current retirement savings strategy is investing in a pension, property in the UK and the UAE, investing in her start-up business, and is also hopeful in possibly investing in other start-ups in the future.
"I spreadsheet everything to budgets and goals etc., invested in my pension since I was 21, and I continue to do so today. I like to invest in property, which I started when I left university. I have invested in property in the UK, which I now rent. Also, I have enjoyed investing in my business, and at some stage in the future, I would like to help other start-up businesses grow."
