A new survey of small business owners conducted by Virtuzone, one of the fastest growing company set-up operators in the region, reveals that the economic outlook is positive. 59% of those polled consider the performance of their business better than expected. 60% are already making a profit, while 49% are confident their companies’ revenue will improve in the next 12 to 18 months.
The entrepreneurial fire in the UAE is believed to be fuelled by: the Internet, e-commerce and technological advancements (58%); demographic factors and favourable economic conditions (33%) including the ease with which a business can be set up.
The survey, which polled 153 individuals, start-ups, and small enterprises in the media industry, licensed by Virtuzone, examined the key challenges and factors impacting their growth. It collected their viewpoint on the economic outlook and opinions with respect to the type of support and services that are critical to their set-up and long term development.
“Despite global lacklustre conditions that are affecting peoples’ stance toward the economic recovery, we have seen first hand that the entrepreneurial spirit and determination to succeed remains alive and well in the UAE”, said Neil Petch, Chairman of Virtuzone. “As a long-time entrepreneur, this validates my belief that there is a significant, vibrant community of start-ups and small businesses here that have the potential to boost the economy,” added Petch.
“At Creative City Fujairah Free Zone and Virtuzone, we are proud to play a part in developing the media landscape and the economy, and enable many exceptional individuals to thrive in the UAE’s unique business environment that rewards entrepreneurship and innovation,” concluded Petch.
Key Findings from Virtuzone Survey include:
The most important factors contributing to the success of a small business are experience and skills (62 %), next to networking and being able to promote the business in a niche market (30%). A few business owners (8%) also cited risk tolerance, the ability to afford to take risks in their business, as a success factor.
About 70% of the small businesses surveyed agreed that marketing support is key to their growth, especially in the short term. This alone serves as validation for a company set-up facilitator like Virtuzone to enhance its support services within the Virtuzone community, as a means to be ready for its current and new customers.
When asked to state their top motivations to start their own business, the majority (77%) of small business owners indicated that they recognized an opportunity in the market; whilst 17% said they started their business out of necessity.
Economic Confidence
The survey found that 59% of those polled consider the performance of their business better than expected. 60% are already making a profit, while 49% are confident their companies’ revenue will improve in the next 12 to 18 months. In addition, 45% are looking to hire more staff and 39% to rent bigger commercial space in order to support their business expansion.
Biggest Challenges: Cash Flow and Planning
The survey asked small business owners to identify their biggest challenges. Uncertainty about cash flow (49%) topped the list, followed closely by the difficulty of planning firmly for next steps (34%), unexpected market changes (11%) and pressure from larger competitors (6%).
“Identifying creative ways to boost revenue while keeping an eye on expenses and cash flow is a good strategy to follow for managing a business in its start-up stage,” said James Reynolds, who founded the web marketing outfit, Web Reactivators, two years ago.
Defining Success as a Small Business Owner
According to the survey, there are different takes on what success looks like for a small business owner. Doing something they enjoy (34%), being one’s own boss (32%) and building something from the ground-up, and proving their ability to succeed (28%), were the top responses. Earning enough money to live a comfortable lifestyle (16%) and having a stable work/life balance (51%) were also considered success indicators.
In addition, the survey found that 35% percent of small businesses rank cost flexibility as most important when setting up a company, while 27% believe visa processing to be one of the most challenging aspects when setting a company in the UAE. Importantly, all survey participants expressed the need for more support in areas varying from legal to accounting and marketing.
Although small businesses are generally classified as those with fewer than 500 full-time employees, about 80% of the businesses surveyed have fewer than 10 employees.
“Small businesses are a major driver in the region’s economic development. It’s beneficial to hear directly from these businesses about their challenges and opportunities, so we can better assist them and help them grow,” explained Jessica Brett, Group Sales Director at Virtuzone.
“Entrepreneurship helps people fulfill their dreams and turn a creative idea or passion into a successful business. Our team is here to provide a swift and flexible company set-up process to our customers from start to finish, along with a suite of professional advice they need to achieve success,” concluded Brett.
