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Slow growth doesn’t mean you can’t start a business, says ICAEW

United Arab Emirates: Thursday, March 22 - 2012 @ 11:25

This means that as the UAE moves from the old markets of the West to supply the new consumers in Asia, now could be the perfect time to start out on your own.

According to the report, which is produced by ICAEW’s economic partner Cebr (Centre for economic and business research), the links to emerging markets are not only developing but the exports to these countries are likely to overtake that sold to traditional markets by 2014. This means increased opportunities for companies to engage with a fast-growing new customer base.

Amanda Line, ICAEW Regional Director Middle East, said, “The Middle East is perfectly placed to both continue selling to traditional markets and take advantage of fast-growing, commodity-hungry emerging economies. So whilst the economic outlook is gloomy for much of the world, it could still be a good time for anyone who wants to start a business exporting, or servicing exports, to Asia and other emerging markets.”

Small and micro businesses make up the backbone of most economies, and they are often best placed to take advantage of new markets and new areas. However, it can be daunting to set up a new business, especially when growth is slowing.

Here are Amanda’s Seven Key Strategies for starting a business in a difficult economic climate.

• Know your business. This usually means doing something that is similar to what you already know, and employing people with experience. It means having realistic plans for overheads and working capital, and identifying fixed and discretionary costs; ask a finance professional with experience of start-ups. It also means researching the market and finding out whether people will buy what you are offering. Finally, it means using feedback to refine your product.

• Get the right people. Unless you’re planning to go it alone, get the best people you can afford. If they see a future for your business, they may even work for less than the market rate.

• Proper Planning. This doesn’t just mean writing a good business plan, where you describe how your business will operate, and setting out the finances for the first couple of years. It also means understanding and planning for contingencies. For example, setting up almost always takes longer than you think, especially where there are regulations to be met.

• Sort out your finance. Being underfinanced nearly always leads to poor performance at the start. In boom years this is bad, in a slowdown, it could kill your business. It also means ensuring you have the right financial information from the start, using good records and proper software. Employ a good book-keeper if you can afford to, or talk to your chartered accountant.

• Data, data, data. Keep monitoring aspects such as turnover, gross margins, overheads, finance costs, net profit, cashflow and working capital, on a daily, monthly and annual basis. You can’t know too much about your business!

• Be flexible. The great advantage of a small business is that it has the flexibility to react to changes in circumstance. So listen to customers, suppliers and staff, and keep an eye out for competitors in difficulty. Don’t be afraid to take the business in a different direction if you see potential elsewhere.

• Keep learning. Learn from what goes wrong as well as what works. Find a mentor who you can bounce ideas around with. Learn from customers and suppliers and ask finance professionals and other advisers what works and what doesn’t.

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Thursday, March 22- 2012 @ 11:25 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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