The beginning and early-middle stages of developing a startup can be an exciting, albeit unpredictable period. During these times, it’s vital that entrepreneurs secure their long-term interest in their venture by ensuring they have prepared for every stage of their development; from their business plan, to recruitment, and growth. Fortifying the backbone of a startup by drafting unerring legal documentation, preparing diligent financial planning, and using effective marketing strategies is a long-term investment – not a cost.

 

Startups in Dubai are a dime-a-dozen, and most ventures often fail due to a mixture of poor preparation and execution. Even the word ‘entrepreneur’ is used so liberally that mentioning the phrase without that certain spark in your eyes often results in skepticism.  With the market being saturated beyond imagination, how can a startup avoid pitfalls, grow as a business, and not become just another statistic?

 

  1. Writing a Strong Business Plan, and Continuously Re-evaluating it

 

It’s essential for Business Plans to be well thought out and actionable. Successful entrepreneurs understand their objectives and have a vision of where they aim to be, however, they also have a realistic roadmap of how to get there. A good business plan fits the business need. Business Plans created for investment can differ drastically from business plans intended for inter-organisational reference. The former may be heavy on have sales objectives, selling an idea, team, and a market, to investors. Conversely a business plan intended to manage the company doesn’t have to polish and present the company to outsiders, and instead focus on operational information. These Business Plans clearly define responsibilities for implementation, to identify people who will be responsible for every significant task and function.

 

Entrepreneurs shouldn’t be afraid of seeking help and advice on their business plans – especially if this is their first venture. It’s important to gain knowledge and perspectives from individuals with more expertise, or with experiences in different business areas. Hiring a management consulting firm or a trusted individual consultant will benefit you greatly should you feel like you need assistance in setting up your startup.

 

Lastly, an entrepreneur should always re-evaluate their business plan. This is important because business plans are based on assumptions, and assumptions can often be wrong. Business plans are live documents and should be reassessed and evaluated continuously. The benefit of this is being able to document any knowledge or experience gained that can affect your business, such constructive feedback, if any obstacles are met along the way, or if startups decide they may need to pivot.

 

  1. Drafting Airtight Corporate and Commercial Agreements

 

An imperative element of ensuring a smooth and successful business process is through infallible legal documentation and agreements. This is essential throughout every step a business takes as every stage can require additional agreements and contracts. When forming a company, an entrepreneur needs to ensure that investor agreements and partnership agreements are all-encompassing to avoid internal disputes. Additionally, during the operational stages, a business should implement secure supplier and vendor agreements to safeguard their interests.

 

Startups must consider Labour Law in the UAE when hiring individuals to avoid overpaying for an employee in the future. This is vital as employers need to fully understand and explain what their employees are entitled to, both in terms of national laws and their contracts. Furthermore, businesses need to also understand the rules and procedures for hiring and firing employees so they can’t be liable for wrongful onboarding or termination. With regards to limitations on spread of information, confidentiality and intellectual property are especially important for startups in technology industries or services dependent on a unique selling point. Entrepreneurs need shield their offerings from intellectual property theft, especially considering the lack of shielding for intellectual property locally in the UAE. Confidential information should be protected both internally and externally through the use of Non-Disclosure Agreements and Intellectual Property agreements where applicable.

 

It is crucial that a business ensures their documentation is in compliance with UAE laws. Many startups in the UAE are run by expats who may not fully understand the intricacies of UAE laws. Investing in the correct legal advice and documentation from day one may save time and resources down the line by being able to foresee and plan for avoidable issues and disputes.

 

  1. Realistic Financial Planning

 

During the initial stages of a startup, allocating your funds effectively is a determining factor for success, or early liquidation. When businesses track their income and expenditure, they’ll be able to monitor how they’re using their capital and resources and determine if their processes can be optimised.

 

One of the most important aspects of financial planning is setting up emergency funding in case anything goes wrong. More often than not, startups tend to spend too much cash when they start earning, which ruins the already set financial plan and leads to additional funding being spent on keeping the business afloat. An effective financial plan takes this kinds of situations into consideration and helps business owners save for real emergencies.

 

With effective bookkeeping, either in-house or outsourced, an entrepreneur can focus on what they’re best at and let a professional handle their books and file their tax returns (VAT). Efficacious accounting and financial planning will save a business money in the long term and also allow for realistic financial projections, feasibility studies, and evaluating a startup’s valuation at multiple stages.

  1. Investing in the right Marketing Channels

 

There are a variety of ways startups can choose to market their products or services. Each marketing channel can be effective depending on the nature of the startup, as well as the marketing budget. If a business anticipates that their marketing budget will be relatively low. One of the best ways to market is to avoid marketing altogether; instead, create a system that lets your customers do the marketing for you. Consider the fact that people are four times more likely to buy a product when it’s referred to them by a friend. Whilst more traditional marketing channels such as sales, outdoor promotion, print and television ads are still beneficial depending on the type of good or service, digital marketing presents a more cost effective avenue towards getting a target personas to engage with a startup.

 

With each passing second, digital marketing becomes slightly more important. Getting found online is crucial in today’s business landscape. An expensive, yet highly effective method to generate leads online is by using pay-per-click advertising (PPC). PPC Advertising is expensive when targeting high-traffic keywords, however if a startup startup fits into a niche, the cost could be significantly lower. With PPC ads, success depends largely on how much is spent on a given ad campaign, along with effective audience targeting. Another key element of a startup’s digital arsenal is social media marketing. Whilst not something that can be done casually, social media offers businesses an avenue to be personable and engage with their audience. The more you engage with your audience, the more brand value and loyalty you build.

 

Consumers also regularly search for their needs online, and being amongst the top Google search results by utilising effective Search Engine Optimisation (SEO) is an excellent way to get exposure at a minimal cost. This can be done by optimising your website with the relevant keywords your target personas are likely to search for. Another cost effective method for gaining sales online is Email marketing, with some sources claiming a return on investment (ROI) of 400 percent or more. As long as a business has a good mailing list (organically curated, rather than bought), and a steady but non-invasive stream of outgoing email blasts, startups should see a significant return on any investment into their email marketing.

 

  1. Knowing the Value of Interns

 

An internship is a two-way process. While the business will benefit from the skills and working hours put in by the intern, they also need to provide knowledge, training, and guidance to someone on a full-time basis. If an intern requires specific training, this can take time away from staff members as the intern learns their responsibilities. To get around this, it can be a good idea to make use of a shift planner to ensure that the intern doesn’t take away too much time from one specific staff member.

 

The benefits of having an intern in a business are the fresh perspective that they bring, and their work ethic. If you manage to find the right fit, one of the most valuable assets that an intern can bring to any business is their enthusiasm; someone who is working as an intern should be doing everything in their power to earn themselves a full-time position by the end.

 

When deciding whether or not to hire an intern, a startup should ask themselves what the purpose of an intern would be. If the objective is to build an employee’s understanding of your business from the ground up, and have them grow with the business in the long-term, then hiring an intern would be a great option. However, if the focus is on getting immediate results with a short-term requirement, then onboarding a service provider may be a better option. This is so a startup can receive professional quality services while saving time on training a new employee.

 

  1. Outsourcing Intelligently

 

Whilst some startups have the luxury to be given carte blanche with their budgets, many others are often incredibly price conscious. Depending on a startup’s budget, an agency or consultancy firm of any size might seem like a costly option. The way some businesses circumvent this issue is by outsourcing internationally to countries where services are generally offered at a cheaper rate.

 

This may be more beneficial in terms of cost, but it may not be entirely cost effective.. There are questions to be raised in terms of the quality of the service that would be received, along with the return on investment. Whilst price isn’t always indicative of a service’s quality, there is likely a reason as to why some organisations offer services at such a low price. It’s up to an entrepreneur to analyse whether or not they understand the value of what they’re receiving at that price as opposed to solely looking at price as a defining metric. Outsourcing internationally can also be time-consuming as offshoring business functions can lead to barriers in communication, a lack of understanding, and culture clashes. Scheduling a one-on-one with an offshore partner could become a nightmare depending on factors such as time zones and their response times. It’s also much harder to be on the same page and develop an understanding on both sides because of these communication barriers.

 

Outsourcing locally could be a costlier option, but startups must consider the value of having onboarding within close proximity. If you can partner with a firm who understand your values, culture, and goals, it makes the operation process much easier and saves time. This would also make communication more frequent and thus reduce the likelihood of misunderstandings.

 

In summation, there are a plethora of steps that entrepreneurs need to look at getting right during the vital early-stages of a startup. Mistakes can and will be made along that timeline, however it is in their benefit to plan as carefully as possible, and also be proactive in their approach towards adapting to change. You can never be too prepared, and by paying attention to the six elements outlined above, a startup can set the foundation for sustained growth and smooth operations in the long-term.

 

This post is a part of a series of informational blog posts on our V7 Group blog. Watch this space for more posts by our experienced and enthusiastic team members as we aim to assist you on your journey towards succeeding with your venture.