The verdict is in that the economy is suffering regionally and this is hitting small businesses the hardest. The Central Bank recently put a halt on jail penalties for bounced cheques for SMEs as the number of cases has risen because of late payments.
But dealing with unfavourable environments is part of the challenge that goes hand in hand with the good times to come, and to reap the fruits that sprout in the spring you need to know how to weather the storm.
One thing is certain: you can’t continue doing business the same way you did when sales were high and business came easily. You have to make changes and it’s better to make them sooner than be forced to make them later.
This may sound like a retracting process, but really it’s about making your business lean, identifying your core business areas and discovering better ways of doing things, which when you review afterwards will make you wonder why you didn’t do business like this all along.
In recent times I’ve had to eat humble pie and make some changes to stay afloat. I could have blamed the low performance of my business on the economy, but truthfully it’s a matter of my own bad decisions. I discovered some useful strategies by going through this process that could be applied to all small businesses as a survival guide in hard times.
Firstly I learnt the full effect of outsourcing. Of course I’ve always outsourced some work and know the benefits, but I went through a process to outsource every function in my business and was surprised at how much I can get done outside the business and how much better it can be done.
This is a key strategy for businesses in the Middle East, as hiring staff requires upfront cost for visas, mandatory office space and a lengthy process to eradicate non-performers. The mentality of an outsourced partner is different; they often work on pure commission and if they don’t perform you can move easily to one of their competitors, so motivation to over-deliver is generally higher.
Traditionally people have outsourced functions to Asia to save cost which is suitable for admin functions and I’ve found many companies, such as Brickworks, that will do this cheaply and professionally. However, sometimes you need the local touch and luckily in a down economy there is no shortage of freelancers looking for work.
Job vacancies in the UAE have reduced by 12 per cent, while jobseekers have risen by 22 per cent in the first quarter of 2016 compared to the year before, according to a report by Morgan McKinley.
Freelance visas are now available through D3 free zone and websites such as Nabbesh.com that help match you to a suitable freelancer so you won’t have much difficulty finding a good salesperson or PR expert locally to support you.
Marketing is another key area of your business that can often cost money, but it doesn’t have to. When I started one of my early businesses with a low budget I did all my marketing for free and I was always trying to crack how to build an audience with no money.
With social media and email, this is easy. I first went about creating my network on LinkedIn and built my connections to more than 5,000 professionals. Then I realised I can extract the emails and now have an email database from which I can send invites to events I’m putting on.
I created groups on Facebook and LinkedIn, which have grown over the years, and I promote in other suitable groups. Now my combined reach of social connections and emails is over 300,000 people and it hasn’t cost me a penny.
On a final note, there are usually only two reasons why businesses fail – they either only do the same thing, or they only do new things. A successful business keeps a healthy balance of both by harvesting your crops and planting new seeds. In tough times take a look at which lines of business are the most successful. It will probably only be a few clients or contracts, so focus on harvesting those. But the lifeblood of all entrepreneurial businesses is innovation, and in tough times it’s easy to leave this aside to just focus on what makes you money now.
As the US president Barack Obama nicely put it: “Cutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you’re flying high at first, but it won’t take long before you feel the impact.”
Paris Norriss is an entrepreneur and partner in Coba Education, which provides educators to schools and institutes