Karim Chbib, owner of Dubai's UniKConcierge, is a case study in why SMEs need to be willing to restructure their business model.
Dubai SME UniKConcierge paused, changed, then grew
Karim Chbib loves to travel. Fresh off a stay in New York, he will be travelling to three countries in Europe for business and leisure in the next few days.
And so when faced with the prospect of a different departure – changing the business model of his boutique concierge company in Dubai – he felt more excited than scared.
“I never had to make a switch like that, and that required a practical approach,” the 28-year-old says.
His company, UniKConcierge, expects to grow following the relaunch, and therein lies a lesson for small to medium-sized businesses (SMEs): regularly review your business model. It gives you the opportunity to identify gaps and shortcomings in the model, improves processes and raises your operating standards.
“If [SMEs] are to be successful, they have to proactively adapt and keep changing as they move from start-up to early stage to more mature businesses,” said Vishnu Deuskar, managing director of the SME advisory company Salvus Advisors. “The same happens when SMEs move from the owners doing everything to having professional staff.”
Back in 2009, Mr Chbib sold his Jeep for Dh60,000 to set up UniKConcierge. Initially, customers could sign up for a year-long membership that entitled them to concierge service seven days a week. It offered assistance in travel arrangements, appointment booking, shopping and even villa construction.
Soon Mr Chbib realised the customers were looking for something else. They had turned it into a travel assistance service, and did not much care about other services such as a personal yoga trainer and nutritionist.
“We had all these partnerships with suppliers such as car rentals, with whom we had yearly contracts, and we didn’t bring business to them,” Mr Chbib says. “A lot of suppliers did not follow up after a year, and that is completely understandable.”
That was when he realised that he needed to review his model, and came upon the idea of packaging unique travel experiences, such as access to a private racetrack in Spain for five days to drive a Formula One racing car (a 1997 Benetton). Mr Chbib has also signed up with Florida-based One Concierge, with which he exchanges experiences.
UniKConcierge’s new business model does not require a membership, and since May it has surpassed 30 users.
As a one-man band, Mr Chbib has low overhead costs. These do not come to more than US$20,000 a year, and so he can become profitable in three transactions.
Apart from a reinvestment of Dh300,000 for the makeover, UniKConcierge did a full market survey to analyse what people were looking for, who represented the new target market, and how Mr Chbib was going to pay suppliers and reimburse clients.
To make the move smooth for its 20 existing clients, UniKConcierge extended their membership free of charge. It retained all of them. Now half of the customers are from the UAE and 80 per cent from the Middle East.
The average cost of an experience is $25,000, but it can go up to $150,000 for the racetrack package. The business makes money by charging its suppliers a commission that tends to range from 10 to 15 per cent, but can be as low as 1 per cent.
“It’s a good concept, it works well,” Mr Chbib says. “It just takes time.”
Being a concierge comes almost naturally to this Swiss-Arab entrepreneur. His Lebanon-based grandfather, Hassan Chbib, offered a range of services to elite and royal families in the region from the 1960s until his death in 1991. His services could include almost anything, from building a villa in Europe to refitting a palace in the Middle East to bringing cattle from France to Saudi Arabia for the kingdom’s first farm.
“UniKConcierge is like following his footsteps,” Mr Chbib says.
Soon the one-man band will be adding a supporting cast: Mr Chbib plans to hire three people over the next few months.
It might not have happened without the relaunch.
“I knew this would be growing faster than before,” he says.