Dreaming of founding your own start-up? Fellow entrepreneurs offer their advice on managing the unknown, laying out a plan and taking the first steps in turning your idea into reality
We commonly read about them: people who have braved the odds to turn their ideas into moneymaking ventures.
But whether it’s a tech-driven idea like an app or a humble fast food joint, the path to start-up success is far from glamorous, as most of us might imagine.
A persistent theory states that 90 percent of new businesses fail within the first five years, with only a small fraction surviving the initial growing pains.
The truth is, aside from concept and vision, running a business takes a lot of hard work – and even luck – for it to thrive in the competitive marketplace.
So what does it take to start an enterprise from the ground up? We ask entrepreneurs to give us their insights.
Create a blueprint
Business ideas stem from the desire to solve existing problems, and often revolve around developing a product or service that will offer real value to potential customers.
That was certainly the case with Akyasi – meaning ‘my bags’ in Arabic.
The mobile app allows customers to leave their shopping at specific drop-off points in the mall, and have it delivered to them later on.
“The idea initially came about over a coffee, discussing the frustration of a hard and long day’s shopping, especially carrying multiple bags,” CEO Ranya Zaben begins.
Co-founder and business development director, Enas Soussan, adds: “At the time, however, we thought that creating something that made hands-free shopping a reality would be logistically impossible.
“The end goal was to create something that connected consumers, retailers and malls, and delivery partners in an integrated platform contained in an application.”
Speaking from experience, the pair advise entrepreneurs to come up with a firm business plan in order to best determine the feasibility of an idea.
The contents of a business plan may vary but it should generally include an operation overview, market and competition analysis, management team, financial strategy and projections.
While success is not guaranteed, a well-thought out blueprint can help minimise missteps and help founders save time, money and the heartbreak of failure early on in the venture.
It takes two
Two heads are better than one. This is true even in the competitive world of entrepreneurship.
“Starting, building and operating a new business is extremely difficult. Growing it into a successful one is exponentially harder and doing it all by yourself is almost impossible,” confides Bernard Lee, co-founder of the co-working office space GlassQube.
Forming a venture partnership can be beneficial in so many ways from having someone to share the workload with and help with financial matters or to offer advice and be there to bounce ideas off of.
That partner doesn’t have to be a close friend, but rather someone who shares the vision and complements the skill set of the co-founder.
But there should be a level of comfort and trust built on mutual respect and a shared vision to help drive your business forward.
“The graveyard of failed start-ups is littered with defective partnerships so invest the time and energy upfront to identify the right co-founder for your business,” Bernard advises.
Financing a business is potentially the biggest issue faced by many entrepreneurs.
Traditionally, this would be done through pooling personal funds or signing up for a bank loan.
Nowadays, we often hear about angel investors, people who inject capital into start-ups in exchange for ownership equity or convertible debt.
In the UAE, platforms such as Womena, Flat6Labs and Krypto Labs all provide access to angel investors on the lookout for the next start-up superstar.
However, solely relying on the thought of attracting a third-party investor right from the get-go is not entirely a good idea.
Investors, while naturally risk-takers, can be extra cautious and prefer to see a viable working model before putting cash on the table.
That’s why it’s important for owners to have enough initial capital to at least sustain the business during its initial run.
“Serious start-up entrepreneurs should be focused on growing their customer base and revenues, not thinking about investors,” explains Bernard.
“If you can demonstrate a sound business model with proven organic success then you can start thinking about funding and oftentimes third party funding will seek you out unsolicited.”
Enas agrees, adding, “Akyasi, up to this point, is self-funded. Once the system is fully operational and its success evident, our plan is to seek further equity participation from investors to fund future expansion.
“The majority of investors seem to be concentrating on e-commerce, forgetting that the physical shopping market will never die. So, as much as they like the idea, they are still looking into the practicality of it.
“The burden of proof is on us to show them the long-term benefits and practicality of the business model.”
A practical tip is to come up with creative ways to test the business hypothesis early to pinpoint problems and make adjustments accordingly.
Prior to launching its Sky Tower office in Al Reem Island, GlassQube created a simple website to gain information, enquiries and feedback from potential customers and investors.
As Bernard explains: “Coupled with our due diligence, the fake website test gave us the confidence to make the substantial investment required to launch the business.”
Doing the paperwork
Gaining permission to operate a business in the UAE can be an arduous process.
“Obtaining your trade license and employment visas are a mandatory first step that must be managed by all entrepreneurs in the UAE and requires all businesses to have a legally registered office tenancy lease along with the filing of numerous legal documents with the Abu Dhabi Department of Economic Development, the Abu Dhabi Chamber of Commerce, the Abu Dhabi Municipality and the Judiciary,” explains Bernard.
Companies like GlassQube, Creative Zone and twofour54 provide consultation and services designed to help fledgling businesses obtain the necessary permits with less hassle.
This allows owners to focus on the operation and management aspects of the business, instead of worrying about the paperwork.
In total, while the UAE takes pride in its ‘vibrant’ start-up ecosystem, there are still a lot of challenges that limit the potential of start-up ventures, according to Bernard.
“There is still an absence of meaningful institutional and private sector support required for a sustainable start-up ecosystem to flourish,” he laments.
“This includes economic and intellectual investment from the private sector in the start-up ecosystem, effective government support frameworks, access to institutional capital and transparent access to relevant information.”
That said, for those who took the plunge, these challenges made the journey that much more fulfilling.
“Have a vision, take risk, challenge yourself, face your fears,” Ranya advises any would-be-entrepreneurs.
“There is no specific path to success. As long as you believe in yourself and your team, know your goals, learn from your mistakes, listen to feedback and adapt to changes, then we think this builds a solid foundation for growth and success as an entrepreneur.”
WORDS Ferdinand Godinez