Do a market survey of the cost to do business
Q: I have been employed in the retail business for over 15 years in Dubai. I am spearheading one department which has done well though I have seen a marked decrease in growth over the last few years partially due to the market condition but more due to the owners’ inactive management style. I feel I know the market pulse and new trends though the management neither wants to incorporate changes nor inject more capital. This has stalled my growth prospects in the company. I want my wife to start a similar business and manage it. I can guide her wherever required and inject our savings plus may invite other partners. When the business stabilises, I can resign and move over. Appreciate to hear your thoughts. A.S., Dubai
A: Having one’s own business is always an attractive proposition though you need to consider both the pros and cons of your decision. It may be true that the retail business where you are employed may not be doing well partly due the old school management style of the owners. If you are confident and have the required capital, you should do a market survey of the cost to do business and also of the potential of generating sales of the line of items you wish to enter into. Generally, a good brand supported by a good location and active sales team is a recipe of success. Nevertheless, a lot of effort and patience are required in the initial years where you need to inject capital and be willing to take risks. If you intend to proceed, choose a good location as in the retail industry, this is of paramount importance. If you are going to do wholesale business in retail items, you would need to provide credit to your customers and should ensure recoverability. Having a family member involved in the business ensures the dedication required. calculate your cash flow requirements and you may be good to go.
Q: I am a professor employed in a university in Europe and South Africa, I am also a part-time consultant on healthcare and am sought after by hospitals and consulting firms on this subject. As an EU national and resident, I have to pay a considerable amount of tax. I have been told that Dubai does not have tax and also has business potential. I was considering seeking residence here. I desire freedom and hence would rather be self-employed. Kindly advise. D.C., Italy
A: the UAE is host to residents of around 200 nationalities. one of the reasons why the UAE is an attractive option is the nearly tax-free regime offered to residents apart from security and a good lifestyle. Many european have thus made it their base. If you intend to be self-employed in the UAE, you must have your own company under ownership where you can have a residence visa.. Such residence visa by itself will not be sufficient to have the residency certificate for tax purpose. one would need to complete at least one year of operations in the UAE and provide an audit report to the ministry who can issue a residency certificate if you also prove a residential rental or ownership. You have the liberty to continue to work for South Africa and the EU plus explore business potential of your specialty here. A business licence can be availed from a free zone which offers 100 per cent foreign ownership and tax exemption guarantee too. the costs and procedure of company set-up will differ.
Q: My son completed his graduation about a year ago. He is more inclined to do business than have a day job. I am willing to invest a reasonable amount for him to start the business. What line of business activity will you suggest? W.K., Dubai
A: I have been asked questions to these effect several times in the past. It is an assumption that some business activities are profitable, some are tough and still others are hopeless. In reality, none of these assumptions are true. A same line of business can be successful or unsuccessful. Your son is a fresh graduate. You may communicate with him on his interests and his plans for the business. try to analyse his plan, without dampening his enthusiasm. As your son still needs experience in the field or line of business he or you select, it is advisable that he takes up work for some time, say a year or two in a similar business to learn the ropes and have a feel of the market. A person should generally select a business line which he is interested in as well as where he has a good business plan to support his ideas. Many people have good ideas, such ideas cannot be converted to success without a well-placed business plan. tread carefully.