The Top Five Challenges Of Doing Business In Dubai
When you’ve lived and worked in Dubai for as long as I have, you would be forgiven for becoming almost desensitized to the rapid acceleration of the city. Barely a week goes by without word of another new development, or murmurings of the next big startup that’s about to break through.
Despite cautious whispers about slowing growth that seem to pop up every few years, Dubai continues to surpass expectations and take its incredible evolution to the next level. There’s no doubt that this is still very much a city that is booming.
In his speech at the UAE Economic Outlook Event 2017, Sheikh Ahmed Bin Saeed Al Maktoum, chairman of the Economic Development Committee in Dubai made clear that he expected the city to exceed last year’s economic growth of 2.7%, up to 3.1% in 2017.
But while the upward trajectory of Dubai may seem unstoppable, that’s not to say doing business in this part of the world is without its challenges. Just like any major business powerhouse, there are certain pitfalls to be avoided and obstacles to overcome. However, providing you go into business with your eyes open and aware of the hurdles that may lie ahead, there’s no reason why the driven and dedicated entrepreneur cannot see success in this amazing city.
So let’s take a look at five of those common challenges to keep in mind.
1. Getting known In Dubai, things can go from zero to one hundred in a flash. But that doesn’t mean you are going to step off the plane and start generating business from day one. Yes, it’s possible, but Dubai is a melting pot of networkers and most likely your first job will be making yourself known. The business culture here in Dubai is very much about personalities– people want to know about you on a personal level before they form a business relationship. That’s very much ingrained in the culture of the city. This needn’t be a daunting prospect. Just put yourself out there in the right places and those connections will come.
Of course, how you put yourself out there is crucial. The key is not to spend all day everyday trying to get someone to buy into your idea. Rather, immerse yourself in the business culture, listen to those already in the game, and consider what worth you can bring to them rather than only what they may be able to do for you.
You probably know the famous quote from How to Win Friends and Influence People by Dale Carnegie: “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” But what Carnegie says next is perhaps even more striking in its bluntness. “People are not interested in you. They are interested in themselves– morning, noon and after dinner.”
Keep that in mind as you build your network.
2. Keeping the mania in check Dubai is the kind of place that you can easily get swept up in. There’s a palpable excitement and almost manic work ethic that vibes through the city and for new arrivals it can take a little time to gain some perspective. While some can get a handle on things quite quickly, many others understandably find the high-energy approach to almost everything rather daunting.
The key to ensuring you keep your sanity while adjusting to Dubai life is to find that work/life balance as quickly as you can: set reasonable hours and take the time to switch off. If you don’t, you could find yourself burning out before you know it.
Burnout is much more than tiredness or even exhaustion. I have seen it many times and it can have a devastating effect. Essentially burnout is a state of chronic stress that impairs your cognitive function, blurs your thought process, and in extreme cases can lead to total detachment from the world around you.
And if that wasn’t bad enough, should you be one of the unfortunate ones that reaches burnout, it will undo all of the hard work that got you there. In the Handbook on Burnout and Sleep Deprivation edited by Travis Winston, one of the many studies cited actually demonstrates that the effects of burnout on the brain not only lead to poorer performance levels, but in some cases, the problems can last several years.
3. Managing the money Here in Dubai, managing your money extends way beyond your business. This is the city of money, after all. The natural default position out here is to spend. And why wouldn’t it be? Dubai is an incredible place to have fun and let loose and there are of course many fantastic ways to spend your money: Fine dining, fast cars, watches, art, fashion and plenty of other things that you really need but, well, don’t actually need.
And of course, the same applies to your business spending too. Once again, there’s plenty to splash the cash on– not least many highly desirable and impressive office spaces.
But keep this in mind: the Association of Chartered Certified Accountants found in their study that 82% of startups fail as a result of poor cashflow management. So, unless you want your time here to be incredibly short, it pays –literally– to get your spending in check pretty fast.
4. Building an organized workflow There are some who say you’re either an organized person or you’re not. While I agree that maybe some of us find it easier than others, I believe that like any skill, organization is something that can be learned. But for some reason –most likely because of how quickly things move out here– many Dubai-based businesses struggle to stay organized.
It is not uncommon to find relatively large organizations with workflow management systems that aren’t fit for purpose– if they even have a formal system in place at all. On the flipside, you often find businesses that have information split across several systems where they have patch-worked CRMs, accountancy software, project management tools and Excel spreadsheets together over time as the business has grown.
However you choose to do it, understand that organization is key to any business’s success. As legendary American businessman Harold Geneen once declared: “The five essential entrepreneurial skills for success: Concentration, discrimination, organization, innovation and communication.”
5. People management Of course, this one is not unique to Dubai. How you manage your people will have a huge bearing on your success anywhere in the world. However there are a few factors that are unique to the city. Perhaps the most notable is the level of diversity present in most workforces across the emirate. You will be dealing with people from many different countries and backgrounds, so one of the key challenges for new arrivals is to increase their levels of cultural sensitivity and awareness.
For most, this is an easy adjustment to make– and it comes with some big benefits, and not just in the sense of broadening your horizons. A study in 2015 by McKinsey that looked at more than 350 companies found that those in the top 25% for ethnic and racial diversity in management positions were 35% more likely to have above average financial returns. Perhaps one of the reasons Dubai businesses tend to perform so well? Cultural dynamics aside, your job as manager will be first and foremost to hire the right people. But that is very much just the first step. Once they are on board, you then need to take the time to get to know them on both a personal and business level. Engage with them, find out their strengths and most importantly what makes them tick.
And engaging with people brings about great results– as recently highlighted by a Gallup study. The meta-analysis of 1.4 million employees found that organizations with high engagement report 22% higher productivity along with lower absenteeism and staff turnover.
And the beauty is, out here, investing in people never feels like a chore. On the whole, the Dubai workforce is dedicated, passionate, bright and hardworking. Just one of the many reasons why, for me, there’s no place better place in the world to do business.
Neil Petch actively assists over 300 entrepreneurs and startups to conceive, plan, and build their businesses on a monthly basis.
After launching Virtuzone as the first private company formation business in the region over 10 years ago, Neil has led the company to set up more than 16,000 businesses, making it the largest, fastest-growing and best-known setup operator in the Middle East.
As the chairman of the holding company, Virtugroup, Neil also leads VirtuVest, an in-house angel investment vehicle; Virtuzone Mainland, a provider of directorship services, corporate sponsorship and facilitator of local Dubai and Abu Dhabi company setups; and Next Generation Equity, a citizenship-by-investment firm. Virtugroup has invested in and supported the growth of multiple companies and delivered passports in over 10 different jurisdictions. Virtugroup also enjoys partnerships with Dubai FDI, the Chamber of Commerce, Dubai Holdings (ARN), VFS, Regus, Etisalat, KPMG, Aramex and Beehive, and has received awards from Arabian Business and Entrepreneur Magazine, among others.
In addition to starting up businesses, Neil has held leadership roles in several companies. He helped establish ITP, the largest media publishing house in the Gulf, which he oversaw growing from two to 600 employees. At ITP, he spearheaded the launch of over 60 digital and print titles, including Time Out, Harper’s Bazaar, Arabian Business, Ahlan and Grazia.
As Managing Director of ENG Media, Neil launched the Coast FM radio station and numerous magazines, including MediaWeek. For the last seven years, Neil has also served as Chairman of GMG, the world’s first interbank financial brokerage based out of Dubai, with offices in DIFC and London. Due to his extensive knowledge and expertise, Neil has been appointed a member of the ‘Ease of Banking’ panel organised by the Chamber of Commerce.
Having lived in over a dozen countries and with a career spanning over 25 years in the UAE, Neil has the ability to merge astute cultural insight with fresh thinking, leveraging his seasoned business acumen, intuition and black book to repeatedly bring ideas to living, breathing success stories.
Neil has appeared in BBC (Dubai Dreams) and ITV (Piers Morgan) features on Dubai, as well as programmes on BBC World and Sky. He has participated as a judge on the radio programme Falcons’ Lair, an entrepreneurship reality show loosely based on the BBC production Dragons’ Den, as well as a similar TV competition hosted by MAD Talks. He now hosts Starting Up on Dubai Eye 103.8FM, the only national weekly show for the startup community in the world’s startup capital.
Neil also lends his in-depth market insight to fellow entrepreneurs and helps cultivate Public Private Partnerships as a Task Force Member of the Advisory Council, a coalition of key decision-makers and prominent movers of the UAE business landscape, led by EMIR and the Ministry of Economy.
He is also a regular speaker, panelist, and economic commentator, specialising in the SME sector.