Building a Company without Financing? Can It Be Done?Author businessconsultantsdubai
Starting a new business in Dubai is like a roller coaster ride. There will be highs and lows. With every turn you will come across another twist. The lows can be really low but the highs will be very high. What you need to do is ride along with the roller coaster by staying strong, have patience, determination and very little fear.
One of the myths amongst entrepreneurs is that new startups in UAE require financing. This is not true. According to experts, more than 80% of new businesses will never succeed in attracting venture capital or angel funding due to the risk involved. Outside funding is not a startup prerequisite.
Successful Entrepreneurs Who Bootstrapped
Many notable examples such as Steve jobs, Bill Gates and Michael Dell started their business through bootstrapping (without outside investors) and waited patiently for their initial success before up scaling the business.
Michael Dell is the founder of Dell Computers who formed his company in 1984. Still a student, he used to build his company out of his off-campus dorm. He eventually dropped out of his university to give his utmost focus on building his company. Dell’s first investment was from his family which was just $1000.
We all are familiar with WhatsApp. Nearly everyone around us uses it. What we don’t know is that the founder of WhatsApp; Jan Koum had very low financial background. Born in a village in Ukraine, his family migrated to California where he began learning computers in extra time.
With hard work and commitment, Koum developed impressive skills and was hired by yahoo as infrastructure engineer in 1997. By spending 10 years in the industry, Koum identified huge potential in the app industry and started WhatsApp Inc. in 2009. In 2014, Facebook bought the app for a whopping $19 billion.
Braintree is a payments tech company started by Bryan Johnson in 2007. He was a sales representative at that time with no IT background and two kids. After two successive failures that lead to huge debt, Bryan got his first contract that able him to form his company and hire part-time staff.
Bryan successfully ran Braintree on its profits for four years. In 2013, it was bought by eBay for $800 million.
Suggestions for new entrepreneurs
What can we learn from these success stories? We have put together valuable lessons and suggestions from these successful entrepreneurs on how to start and manage you company with little to no finance.
Do not rush into forming full fledge business, rather start with the basics. Reduce your scope e.g. launch a blog and one niche service that will limit your audience and profit but will give you a head start.
Reduce your needs like start as a self-employed individual. Avoid initial costs such as work from home rather than office, go for cheaper supplies and cut off product lines that demand too much money. Form your business piece by piece rather than all at once.
2. Recruit wisely
A good technique used by Bryan (as mentioned above) was ‘crowd sourcing’. He posted ads on Craigslist in which he offered cash rewards to those who would recommend him people that possess mentioned qualifications and attributes. This was a cost effective means to attract talent that would have been expensive to reach via normal means.
3. Build a supportive network
Having limited resources, you will have to take multiple roles. Meet other entrepreneurs, get involved with them in person and online. Ask for their help if they can add value to your work.
Get emotional support from your family and professional support via networking. It can greatly help in reducing stress that can possibly trigger in the early phase.
4. Be you own boss
Utilize all the available resources, fund your business with profits rather than outside funding and be your own boss. You will eventually respect your income that comes from your hard work and commitment.
5. Time management
Make the best possible use of time. Quality of time matters more. When you apply this notion on your business certain questions will begin to arise such as seasonality of your business with industry, what are peak periods of productivity for your team, how to take advantage of an opportunity. Solving these questions with efficiency and strong work ethic will help you in the longer run.
SMEs IN UAE
SMES and entrepreneurship are backbone of UAE economy. More than 300,000 SMEs are currently in UAE providing 86% of all private sector employment. SMEs contribute to 95% of all UAE enterprises and 60% of UAE GDP. UAE Vision 2021 estimates that contribution to grow to 70% by 2021.
UAE provides government support and offers that helps business for its setup and enhances skills of entrepreneurs. Khalifa Fund for Enterprise Development and Start Competition provides capital for startups. SME Academy and Dubai SME provide training in managerial activities crucial for entrepreneurial success.
Along with government support, we highly recommend you seek professional advice and expertise of KWSME consultants who work diligently for your entrepreneurial success.