Is this article for you?
Are you the owner or manager of an SMB? Are you in some way doing or wanting to do business with SMBs like providing training or consultancy services, loans, or other products or services? Are you in a government department, utility company or NGO which deals with helping or serving SMBs in many different ways? Then read on, and see why you should join a community supporting entrepreneurs. You can contribute to the success of entrepreneurs and through them the economy’s growth, while building your own business. 

Challenges of managing SMBs, specially in recessionary times
SMBs, also called SMEs (Small and Medium Enterprises) usually have small teams, most often just the sole proprietor being the jack of all trades. They also have little or no funds, negligible IT infrastructure, no easy access to legal counsel and many of them have little or no management education and experience. But they are usually big on passion, and have some personal expertise in the product or service they want to offer, as well as a deep understanding of their market. Their main asset is their business insight and their personal commitment to the success of the business.

It is no surprise that SMBs face many difficulties in establishing and growing their business, and that these are very different from the challenges faced by large corporations. SMBs must find ways of funding their business like any other business, but without any credit history or collateral or proven business success, they either do not get loans at all or have to pay a very high interest rate to cover for the high perceived risk banks see in lending money to them. Most SMBs learn the tricks of managing a business with experience over time, through trial and error, making many unnecessary and costly mistakes along the way. They may not be fully aware of what IT infrastructure their business needs, nor do they have the money required to invest in putting it in place, or so they think. As a consequence of these handicaps, SMBs face a gigantic task in starting off and gaining momentum, and we have not even begun to talk about the specific challenges of their own market.

In recessionary times, things become even more difficult. Banks are even more reluctant to part with money, consumer demand for products or services offered by the entrepreneur may fall off, economic uncertainty may cause talented staff to become de-motivated, less productive, and may even leave the company or the country altogether. If the recession has affected the government, then government grants for SMBs may also stall. There may also be a slowdown in investments in industries like construction on which some SMBs may be dependant for either supplies or sales. In short, an economic slump just makes matters worse.

Big in number, small in size, long in queues
SMBs are the backbone of any economy. Around the world as in UAE they are estimated to be anywhere between 70-80% of a country’s GDP (excluding the oil sector). There are an estimated 230,000 companies in this category in UAE, as per one definition that classifies a company with less than AED 100 million turnover as an SMB.  In terms of favorable business environment for startups, UAE ranks 25th among 42 countries surveyed in the UAE Global Entrepreneurship Monitoring Report 2008, which is an improvement over the rank of 41 in 2007. In a recently release report by World Bank called ‘Doing Business’ (2009) in ‘ease of doing business’ UAE’s overall rank is 46th compared to 54th in 2008. However, this improvement still leaves UAE far behind some of its Gulf neighbors like Saudi Arabia which ranked 16th, Bahrain 18th and Qatar 37th. Specific areas for improvement identified include ‘starting a business’, ‘protecting investors’ and ‘enforcing contracts’. It all comes down to the high number of bureaucratic steps and the stretched time it takes to complete these processes.

Where this is a need there is an opportunity
While these challenges hinder business growth, they also discourage prospective entrepreneurs from thinking of starting a new business, due to the fear of failure and the consequent financial loss and damage to personal reputation, particularly among the national population. A research report has identified both drivers and concerns among Emiratis related to starting a new business in UAE, and it can be concluded that they all relate to better information and planning, as well as good management.

Many quality resources are available to entrepreneurs to help them in acquiring and building the skills and knowledge, funds and technology, people and processes that can lead to a smooth start up and a successful, growing business. Most entrepreneurs are, unfortunately, not aware of where or who to turn to for help. The good news is that a wide ranging community of professional consultants, trainers, financial institutions, government agencies, IT solution providers and others is fast taking shape to provide a support network to entrepreneurs in UAE. This is led by an international initiative by Cisco Entrepreneur Institute which has already been successful in several countries and is showing how private-public partnership can benefit everyone.

Are you open for business?
Why not join this growing community? If you are an entrepreneur, you will find the help you need. If you are a service provider, you will find the means to connect with your customers. Specific areas to focus on include how to develop an entrepreneurial mindset, how to start a business, how to grow a business, how to leverage technology and to learn from failures, successes and best practices of experienced local and international entrepreneurs and business experts. All this and much more is now available and is being further developed by this growing new community.