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Abu Dhabi, UAESunday 18 November 2018

Unneeded product a major reason for business failure

If there is one thing the UAE encourages Emiratis and residents to do, it is to start their own businesses. But even with proper support, many still fail.
The Khalifa Fund sponsors Emirati businesses. Above, Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, left, at the fund's kiosk at Adnec last year.
The Khalifa Fund sponsors Emirati businesses. Above, Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi, left, at the fund's kiosk at Adnec last year.

If there is one thing the UAE encourages Emiratis and residents to do, it is to start their own businesses.

I stopped by the booth of the Khalifa Fund, a government effort aimed at sponsoring Emirati businesses, at Tawdheef's recruitment exhibition last week, to ask about funding programmes.

After a brief conversation about my small fashion business, the business counsellor encouraged me to consider expanding my line and even start a whole new business that would be fully sponsored and supported by the fund's team of experienced business counsellors.

When my late grandfather started his manufacturing business in the late 1950s, there was very little information out there on how to start a business, and yet he succeeded. Since then, the business world has evolved greatly.

You could spend years going through the Web articles, magazines, books and videos dedicated to starting a business.

But even with all of these resources and the flexible business laws in the UAE, many still fail.

After witnessing the negative experiences of some friends and colleagues who failed to properly manage their businesses within the first year, I believe that the answer relies on a number of factors.

The primary reason for failure is the entrepreneur's fixation on a business product or service that is not needed.

Great companies all over the world do this all the time. Google launched Google Buzz in 2010, and pulled it last year.

Many business owners fail to conduct extensive interviews with their potential customers and find out what they really want. Proper market research not only builds early relationships with potential customers, but also creates a buzz around a brand and sometimes leads to some early sales or sign-ups.

Bad management, poor accounting knowledge and lack of marketing can also suck the life out of a small business.

A business owner does not need to be a certified accountant to properly run the venture but should understand an income statement, balance sheets and how to operate an accounting programme.

Entrepreneurship is all about risk, especially during tough economic times, and this is something that business owners should always keep in mind.

Sometimes an entrepreneur will take a calculated risk and encounter an unexpected problem. This is why it is vital to have a proper business plan that provides the flexibility to deal with unforeseen circumstances.

Attending trade shows and seeking advice from people in similar businesses in the UAE or the region is useful. It has worked for me, and for many of my colleagues who started businesses.

Tamakkan seminars, which take place every month in Abu Dhabi, are open to all at no charge. They offer great advice to small-business owners by social media and business experts, who share their experiences and how to deal with crises.

Differentiating between support and intelligent advice is vital here. Your family and friends will be supportive when you tell them about your plans, but if they do not own businesses, you may not be getting proper advice.

Moreover, as harsh as this would sound, not everyone is wired to be an entrepreneur, just as not everyone is meant to be a doctor or an engineer.

The success and failure of a business has little to do with the idea and more with the person operating it -his or her drive, passion and skills.

However, failure is not always a bad thing, and it is not permanent. In fact, many inventions succeeded after failing over and over again, and the lessons learned from this bad experience can serve as the backbone of a new venture. Thomas Edison failed countless times before perfecting the light bulb.

Starting a business is risky and demanding, but it is rewarding if it is done with proper planning, funding, and, most important, the right product.

Manar Al Hinai is an Emirati fashion designer and writer. She can be followed on Twitter @manar_alhinai

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