With unemployment in the Middle East region rising and now standing at 10.9%, the highest regional rate in the world (ILO, 2013), Arab countries alone need to create approximately 80 million new jobs by 2020 according to the World Bank. It is a daunting goal but I have always been a firm believer that entrepreneurship is the best method for job creation. Businesses are the key driver of any economy, and the more successful entrepreneurs there are, the better the chances of creating jobs.
I have been to the Middle East on a number of occasions, particularly as one of my businesses 90 North conducts transactions for investors there. There is absolutely no question in my mind that the spirit of enterprise is well and truly alive within the region. However, one area where there is room for improvement is the issue of giving entrepreneurs the required support system to succeed –primarily growing a culture of mentorship. Running a business is one of the most challenging things you can do, and you cannot underestimate the importance of mentorship. It is the most significant tool any entrepreneur can access- somebody experienced and impartial that you can turn to for advice. Mentors can be a sounding board for any ideas you may have, they can provide honest feedback, and they can inspire you to realize your potential.
There is sometimes a school of thought amongst entrepreneurs that asking for help is a sign of weakness, but it isn’t. Being aware of your weaknesses is strength in itself, and having a mentor to guide you can only be a good thing. When I started my first business over 30 years ago, the one thing I didn’t have to begin with was a mentor. I made mistakes, as any entrepreneur does in their early days, but I wonder whether I could have avoided some of these if I’d had someone to turn to. That’s why I’m so passionate now about passing on my knowledge and experience now. I am Chairman of the UK Government’s Start Up Loans Company, where budding entrepreneurs are given capital to start businesses. Crucially, every entrepreneur who successfully applies for funding also gets access to a mentor– a person who knows what starting a business is about and the potential pitfalls to avoid.
Even in my day job at Hamilton Bradshaw Private Equity, I see myself as a mentor to every single CEO within my portfolio, no matter their career stage. They know that they can come to me at any time for advice. When we were in the midst of the 2008 recession, our portfolio didn’t suffer as much as expected– in fact it actually grew in value. One of the reasons for this was that I had been through a bad recession before in the early 90’s. The business I was running back then went through some extremely rough times, but it recovered and the lessons I learnt were passed on to the CEOs I currently manage. Mentorship is about developing the whole person and maximizing the potential of the business.
When I start out mentoring a new budding entrepreneur, these are three of the tips I make sure to share with them.
Cash Flow A lot of entrepreneurs operate on an accrual basis, but I would urge people to go back to basics, especially if you’re just starting out. Operate on a cash basis. If you’ve completed an order and have invoiced for it– I still wouldn’t class that as revenue until the cash is actually in the bank. At the end of the day can you pay your staff or your bills with an invoice? No, so only account for money that you actually have.
Business Flexibility Another key thing to remember is to stay current and flexible. A few years ago I invested in a high-street shop that wasn’t flexible and in-tune with its customers. Quite simply, it didn’t work out. The same has happened to many large companies over the years. Businesses that are flexible find it easier to adapt and survive so this is something I urge every business owner to be aware of. Look at your competitors, talk to your customers, constantly analyse the way you do things, and adapt.
Technology Thanks to technology, anybody, anywhere, can now help others along their entrepreneurial journey. Gone are the days of only being able to speak to others during office hours on a landline. Nowadays you can even conduct seven-figure deals while being on the other side of the world thanks to smartphones and tablets! I regularly use social media, namely my LinkedIn Influencer Blog and my Business Secrets App to share some of my experiences with a worldwide audience. And the mere fact that I am able to give these little bits of advice to Middle Eastern entrepreneurs whilst sitting at my desk in London illustrates the power of technology further.My hope is that entrepreneurs globally begin to seek out their own mentors and that successful entrepreneurs continue to create an environment where failure is celebrated as a valuable learning experience. When you take all of this into account, there really is no reason why entrepreneurs who have been there and done it, should not be giving back to the business community in the form of advice.