First Person: How Dubai-Headquartered RAW Coffee Company Is Safeguarding Its Business Through The COVID-19 Crisis
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As a wild generalization, entrepreneurs have a natural tendency to charge ahead. However, during times of critical stress or crisis, rather than charging ahead, it is more prudent to formulate a new business strategy.
As entrepreneurs, we tend to have a blinkered focus, but now we need to stop, listen, and have a broader approach, and instead of being single minded, we should drive ahead with your entire team, making sure that each person is in balance. By balance, we mean that we should not be purely financially driven, but that we should be considering the people who will help us to navigate these challenging times.
The trick is to maintain the edge of agility with a very clear structure that is well thought out and paced strategically, instead of changing pace all the time. The reason is that we need to ensure that our key team members are able to sustain the tempo. And it really helps to know how to motivate them.
At our enterprise, RAW Coffee Company, all our senior team members have been put through an Insights Discovery team productivity assessment program, which has helped us to understand how best to communicate with them individually, how to listen to them, and how they themselves listen to other people. It has helped us understand how they work from within and influence the dynamics of their teams. It has been an incredibly valuable investment to ensure we are all pulling in the same direction with the same visibility.
Importantly, we also need foot soldiers and solid corporate citizens, as times like this mean that you are physically not able to personally manage everything yourself, and you need good people on your team. That being said, you need to dedicate at least 20% of your time to things you don’t like to do! So, you have to continue planning ahead, and you have to continue doing the normal day-to-day operational management of your company.
We run our business based, firstly, on cash flow. It is the very first thing we look at. During March, April, and May 2020, we ran a cash flow budget on an excel sheet, checking it daily as a team. We had clear visibility of our finances, and we had immediate clarity when we drastically reduced our expenses on all but critical expenditure. That being said, we still budgeted and planned for investments in things that would be critical for our day to day operation. Back in January, when the first news of China’s problems reached us, we immediately set up IT solutions, including Microsoft Teams, security, and access to our servers, so all our team could continue working from home once the crisis came to us.
We established regular team meetings with different departments, which led to us working very long hours and spending most of our time connected, but it helped us to keep a very close eye on everyone. We have realized that some of our senior team members work extremely well from home in isolation, as their output has been enormous, and that they prefer the independence and solitary workplace. We have also realized that others feed off the work environment, the noise, and the banter, and that some do not have the maturity or focus to work from home, but are effective when they are in the office.
Therefore, it is ok to make a plan, and then to have to change it. It is actually better to have three plans for three scenarios, but to have thought each one through thoroughly. With this you can focus on the best execution at the time, instead of planning something new. It is also a really good idea to have someone that you can vocalize your plans with, someone who can listen and won’t necessarily give you an opinion.
It is beneficial to verbalize your thoughts, even so that you can hear it yourself, because people are the most critical of themselves, especially when hearing their own voices. So, we had the best case and the worst case scenarios, numerous large whiteboards assigning team members new roles and what-if scenarios, all of which allowed us to see the gaps or the problems well before they arose.
We don’t believe in international reports, so we chose to use our intuition and to listen and read as much relevant industrial specific news as we could. To do this, you need to be industry savvy in your own field, and have a global awareness and keep an eye on more mature markets as a measurement. Talk to your team and customers as you would with any other human being- many conversations we had were not business-focused, but they strengthened our solidarity and secured the relationships.
Here in the UAE, in the specialty coffee industry, there are lots of new players. Many run their businesses without considering or putting strategies in place for future growth. Their pricing reflects their current position, resources, and size, but does not include the intangibles that would allow them to develop their business for the next stage. They haven’t looked at the next phase of their business, and have been running very cash poor, relying on credit, so we are seeing many good small businesses closing.
Lean businesses are wonderful and should be admired, but there is a fine line between lean and choked. The ability to continue to grow the business is critical, and cash is the fuel. Hoping an investor will come along just means you are doing all the hard work for someone else’s gain.
We don’t consider our business mature in any way. It’s a toddler that has just learned to walk. As its parents, we started "a school fund," even though we were "building a new house." On many occassions, it would have been easy for us to spend the school fund multiple times during the lean months that Middle East businesses have to endure every summer; however, this nest egg was one of the things that gave us the breathing space from March to April 2020, and allowed us to action the prepared plans, whilst keeping our team housed and fed.
Today, we have a completely different revenue model. We were lucky that our business had multiple revenue divisions, as we have experienced a polar flip of where our money comes from. To think this is the “new norm” is short sighted and lazy. We are back to making three new plans based on possible scenarios that we have little or no influence over, with equal weighting on security and growth.
In conclusion, it's been a very busy and dynamic time, and luckily, as business partners, we have had our own high’s and low’s at different times, so we’ve been able to support each other and continue the forward momentum.