Owning and running a small business in the Middle East today can be challenging, especially when it comes to cash flow and other financial matters. There are challenges to overcome and pitfalls to be avoided.
Let’s take a look at some of the most common challenges and what you can do to solve them.
Tight liquidity: The region currently faces numerous financial challenges, and people have less spending power due to rising unemployment, tax increases, and inflation. Those who don’t have cash are pushing their credit limits while those with money are holding on to it to ensure healthy cash flow for their business.
During these times, focus on your top clients and provide them with the best possible service. At the same time, review your expenses and cut out any unnecessary spending so that you have funds available for your top business priorities.
Finding the right talent: The region’s economic challenges have led to a brain drain – youth and other talent are emigrating in search of better prospects – resulting in a smaller pool of available local talent. With larger businesses able to offer the remaining talent better employment packages, small businesses are left with a limited number of qualified people who might accept lower packages. And if they do agree, they’d leave at the first opportunity for a better package.
The best solution is to search for candidates with values that match you and your business’, to then train and empower them to become top performers, and to offer them enough benefits to retain them.
Great people make great businesses, not the other way around, so work to find ways to increase your staff members’ productivity before considering layoffs.
Lack of long-term vision: If you’re like many small and medium business owners, you’re surviving from one month to the next. Your planning is likely focused on reducing expenses, covering cash flow, and managing the never-ending daily challenges in the short term.
No matter how challenging your day to day operations may be, work to develop a long-term vision and strategy that anticipates and offers solutions to the many (potential) changes taking place in the (regional) market, as well as those that are part of the normal business cycle. A clear and positive vision for your business – written down and shared with all stakeholders – will (at least partially) relieve you from the daily challenges and can also motivate you to leave your comfort zone and go the extra mile to achieve your business goals. After all, big achievers are big dreamers.
Fierce competition: The Internet enables international players to compete with smaller local businesses online. Online, customers can order nearly any product, and have it delivered to their doorstep at competitive prices.
To beat the competition, differentiate your business by adding value to your clients. Work to always stay one step ahead of your competition: clients love winners!
Creative marketing: During tough times, marketing becomes an even higher priority. More than ever, creative marketing is needed to establish clear brand positioning, differentiate the business from its competitors, and deliver the right message to the right audience. Digital marketing offers an affordable alternative to the costlier traditional marketing. Yet, not all business owners can afford the right talent.
Here, you might invest in new – young – talent with out of the box ideas. Alternatively, you can reach out to small marketing boutiques, freelancers, or even small advertising agencies who are willing to go the extra mile. Or you can invest in creativity training for your team to encourage them to generate creative ideas which may result in real business opportunities. Most importantly, dare to try something new.
Insufficient business knowledge: Although many small and medium business owners are excellent at what they do, they often lack the technical business knowledge needed to successfully grow their business. In addition to a quality product or service, business expansion requires expertise in sales, marketing, HR, finance, IT, and other areas. This does not necessarily mean that you, as a business owner, need to be an expert in all of these areas. Surround yourself with a professional team that has the expertise you currently lack.
In case this creates a financial challenge now – and even if it doesn’t – keep investing in expanding your own business knowledge. Every great entrepreneur learned business skills in a way or another. Don’t leave it to chance but create your personal earning plan and resources (workshops, online seminars, etc.) and read, read, read, and read. The world belongs to those who learn and apply what they know.
Common financial business challenges can be overcome by planning and preparation. Taking the time to identify your business’ pain points – and to create an action plan – can help ensure the success of your small business.