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Seeds to Success |
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Michael Brown, Partner ar Iqdam
Michael Brown, partner at Iqdam, is a distributor who knows only too well the joys of bringing a new product, first time to market, that has not just become a winner but a cultural phenomenon. Brown points to two main challenges for the SME entrant –these being location and cash upfront. “To my mind you need to be where there is good footfall, which means the major malls like DCC and MOE in Dubai and similarly in Sharjah and Ajman. To put up a store one would need to be fairly cash. Upfront cash payments from Dhs 250,000 to put down as deposits for fit out and three months rent in advance and this before staffing and marketing”. Some businesses are lucky if they have private investors backing them, such as family or angel investors.Says Brown, “I put in some cash along with my partner to start –up. Another way is to sell shares in your business to get people to invest. But it is hard. At the moment we are looking into getting a retail outlet at Souk Madinat costing between Dhs. 7,000 – 12, 000 rent per month. Another good way for a start –up to enter the mall space is to get a kiosk, currently costing 20,000 at Deira City Centre”. No matter the cost, Brown stresses, “do your research and ensure your product is worth the investment. We have a high impact product that makes people smile – we are finding it hard to meet demand in orders”. |
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Alex Hill, Independent Retail Sector Observer
Independent retail sector observer, Alex Hill points to the online route to starting up a new business. “Dubai does not strike me as an easy place for a small independent business operator, unless you are catering for a special niche. Having said that, I see many expatriates that are very successful and have chosen an online business as an option over a bricks and mortar store.
Take for instance a company such as Blue Banana and Quick Dubai owned by husband and wife team, managing directors John and Lesley Rowe. Quickdubai.com. saw a niche and made an investment which is much less risky than a shop. No rent problems and post dated checks”. |
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CASE STUDY: Contempo Florist
Contempo Florist opened at Fairmont Hotel 5 years ago as a spin –off from the parent company Contempo Events Design specialising in decoration services for Corporate Events such as this year to include, Rugby 7’s and World Cup 2007. Steven Eisenhart partner and GM comments, “The nature of our service is temporary as stages and flowers last from a few hours to a few days. Flowers by their nature have a short shelf life. Our partnership with the Fairmont grew from providing the hotel with specialized presentations. Our store services a very niche and high –end customer and so our position at the hotel has been appropriate. However we have grown into a fourth store now under construction in JBR, another apt location for the business. Other stores are at Marriott and at The Market in Green Community. What is interesting for us at Green Community is that we went into it with a long –term view and decided to take a risk in being at this mall that has slower footfall. However, we are the only suppliers of flowers and with the lower rental rates of approximately Dhs 150 – 190 per square feet as opposed to Dhs 500 in Sheikh Zayed Road, we are managing to do better as time passes, serving a localised community. |
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| In addition we are positioned to capitalize on the second phase of development by Nakheel which will set up Golf courses by Jumeirah Gold Estates. There are many other good florists in Dubai and flowers have a certain appeal. I think Contempo has found greater success than most as our Contempo creative director Brian Van Ess designs an exclusive look with first class flowers, but more so Contempo’s success has been due to another business that has supported the diversification and helped the flower business to expand and stay afloat. A word of caution is about illegal practitioners in this business. I have a license from the DED and 75 people on our books and Dhs 300,000 as worker guarantees. This can also hurt a start –up if one is not street smart. Also, mall owners don’t understand the flower business and look to locate the shop at an inferior location within the mall next to other services which they believe provide similar value such as film developers and the laundry. Nothing wrong in this, but watch out for your business’s brand positioning. |
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YourBusiness Magazine © 2007 Dabbagh Information Technology Group Ltd. All Rights Reserved.
Registered in Dubai Media City. No. 30064. Registered office: 122, Building 9, Dubai Media City, Dubai, UAE |
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