The SME Story
Roger Federer inks multiyear deal with Swiss Tourism to become the official ambassador for the Alpine country
Interviews with entrepreneurs and insights from experts on how the regional SME ecosystem is evolving
Swiss tennis star Roger Federer is one of the sport’s most legendary players. The former world number one has won 20 Grand Slam men’s singles titles. However, the 39-year-old Basel-born Federer who is still active on the court isn’t done yet, and reportedly drew in around $100m in endorsement income in 2020 alone.
On March 29, Federer announced a long-term deal with the Swiss national tourism board, Switzerland Tourism (ST), to become the official ambassador and promote his native Alpine country, positioning it as a coveted destination.
The timing of this partnership is crucial, coming at a time that Swiss tourism is emerging from its biggest crisis since the Second World War. With travel restrictions still in place for several countries around the world, its impact on tourism in Europe and Switzerland has been crippling.
“Establishing this partnership is a unique opportunity and of great importance to us. Making a difference while recovering from the challenges of the past months and beyond will be a journey with numerous highlights,” says ST’s CEO Martin Nydegger. The communication activities for the new partnership will begin in April with a focus on European cities followed by the US and subsequently countries located within the Asia Pacific region. The campaign will include visuals and short clips showcasing Federer across different locations within Switzerland.
On myswitzerland.com, guests will be able to discover the country through a few of Federer’s top picks across categories including hidden gems, city tours, mountain trips and nature trails. “I have always felt, whenever I step on the court, [that] I am representing Switzerland. Whenever it says my name, there is a Swiss flag next to it. I have been very proud to do that for the 22 years I have been on tour. To join forces with ST now is a logical step for me,” says Federer.
Apart from Switzerland, he also calls Dubai his home. It’s a vital connection that will serve him well in his new role as he will play a pivotal role in driving increased tourism from the GCC. Gulf tourists have accounted for around one million overnight stays in Switzerland over the last few years. The daily expenditure of these tourists is around CHF420 per day, thereby generating around CHF420m turnover per year in Switzerland.
The two biggest source markets from the GCC are the UAE (35 per cent) and Saudi Arabia (35 per cent), with Kuwait and Qatar accounting for between 11-12 per cent each, and the remaining coming from Bahrain and Oman.
The tennis star who commands tens of millions of dollars each year as endorsement fees has chosen to partner with ST to promote his country for altruistic reasons, rather than to add to his personal net wealth. In fact, he says all the money he earns by way of his deal with ST will be given to charities around the world, including for purposes of building sports grounds for children in Switzerland. It wouldn’t be far-fetched to imagine Federer drop by on any one of those grounds for an impromptu training session with the neighbourhood’s children.
“I have always felt, whenever I step on the court, [that] I am representing Switzerland. Whenever it says my name, there is a Swiss flag next to it”
What is the concept behind Coinmena?
Within the Middle East and North Africa, there is a growing appetite from both retail and institutional investors to invest in crypto assets. The avenues from which to do so within the region are limited, and also they do not encompass investing via local currencies. Coinmena was founded on the vision of addressing this key need of unlocking access for crypto assets in the MENA region in a regulated, reliable, safe and convenient way.
When was the first time you got involved with cryptocurrency?
From a young age, I have always been entrepreneurial. I started my career building and growing the family’s real estate business where I gained firsthand experience in scaling a venture. In 2015, I worked closely with the founding team of the first regional crypto assets exchange. Based on this experience, it was evident to me that the region needed a fully-regulated and well-governed exchange with stable banking relationships that allowed customers to transact in their local currency. It is on this premise that I established Coinmena.
Can you give us an overview of your operations?
Coinmena is headquartered in Bahrain, with a secondary office in Jordan. It is a fully-regulated, onshore, and Sharia-compliant crypto assets exchange. We are licensed by the Central Bank of Bahrain as a Crypto Asset Services – Category 2 company making us one of few fully-regulated exchanges globally.
Catering to both beginners and experienced crypto traders, Coinmena is currently available to investors in Bahrain, Saudi Arabia, UAE, Kuwait, and Oman. Investors will be able to deposit, trade, and withdraw in their respective local currencies. At present, CoinMENA offers five leading crypto assets: Bitcoin, Ethereum, Ripple, Litecoin, and Bitcoin Cash.
What is the market size of cryptocurrency trading within the GCC region?
Globally, the crypto assets market currently stands at around $1.8 trillion and this is anticipated to cross the $2.5 trillion mark by the end of 2021. The MENA region currently contributes around 2 per cent of the global total, equating to $36bn. Of this, the GCC represents around 60 per cent, equating to around $25bn. Based on current market dynamics for the MENA region, we anticipate it to contribute around 2.5 per cent of the global total by the end of the year.
Apart from Bahrain, have other GCC governments encouraged cryptocurrency trading?
Besides Bahrain, the UAE, through its different financial regulatory bodies, has also been looking closely at crypto assets. This would enable retail and institutional investors in both countries to invest in this industry. As more countries and regulators in the MENA region start embracing crypto assets, as Bahrain and UAE have, it will result in further acceptance and increased investments in the industry.
What are the expansion plans you have in mind for the business?
We will be growing our geographic market coverage by targeting new markets within the MENA region at an initial stage to ensure that the region can access crypto assets. Subsequently, we will expand outside of the region. Additionally, we will be widening our product offering through additional crypto assets that are globally proven and stable.
Can you tell us about the scope of your operations?
Raw Coffee Company imports specialty-grade green beans, roasts and supplies them to cafés, restaurants, offices and home connoisseurs. We [also] support our customers with water treatment that is designed to give the perfect water chemistry for coffee; our barista training sessions are customised for each outlet; we partner with quality Italian espresso equipment; and we roll all this knowledge into a consultancy so that the operator can be financially viable. There are hundreds of cafés and more than 55 roasteries [in the UAE], all competing for a market share.
What is the USP of Raw Coffee?
Raw’s USP is that it adds value to the speciality coffee industry – it adds value to the people it sources its green beans from at origin and also to the businesses it supplies to by being more than a supplier. As the first speciality roastery in the MENA region, we weren’t happy with the quality of the RO water units available here, so we built our own.
What was the impact of the Covid-19 pandemic on your business?
We have been incredibly fortunate as we had money in the bank and no debt. We had fresh green stock for the year that we had paid for. We paused elements of the business, we diversified, and we found logistics partners. We reached out to our customers and came up with revised payment schedules. We ended some relationships with customers, who didn’t pay and who didn’t value what we gave them. We made hard decisions for some and we made conciliatory decisions for others.
How important will e-commerce be for the brand going forward?
Our online business is up 75 per cent year-on-year.
WE ARE FOCUSING ON R&D, LOOKING AT PRODUCTS THAT WILL MAKE GOOD COFFEE AVAILABLE TO ANYONE, WHILE ALSO CONCENTRATING ON THE ENVIRONMENT
We manage the majority of our deliveries in-house, and we have partnered with Quiqup for Dubai, Fetchr for the remaining emirates, and with DHL for all other GCC deliveries. We have made and continue to make improvements to our website and started paid digital advertising.
What are some of the expansion plans you have for Raw Coffee?
At the moment we roast and supply to other GCC countries from our roastery here in Dubai, and we are now looking at GCC expansion next. We have just finished establishing legal entities that will enable us to move into Saudi Arabia. We recently formed RAW Beverage Trading which offers cafés and restaurants beverage solutions for everything other than coffee – for example hot chocolate, iced teas, fruit pulps for smoothies and frappes. We are focusing on R&D, looking at products that will make good coffee available to anyone, while also concentrating on the environment – no single-use plastic, and no artificial additives.
Over 80 per cent of small businesses and startups fail largely because of cashflow problems. As shocking as this may seem, entrepreneurs should learn from these failed businesses and use these lessons to gain a deeper understanding of how to effectively manage their finances.
Here are 10 tips to help entrepreneurs:
1. DO NOT LOSE FOCUS ON ‘CASH’
As an entrepreneur, although your focus will mostly stay on building your topline, do not lose focus on cash. ‘Cash is king’ is an old saying and will always hold good for any business. But this does not mean keeping idle cash in the bank; it means optimising the use of cash by managing one’s working capital and expenses in a smart way and ensuring you have some cushion for unforeseen situations.
2. CLOSELY MONITOR YOUR BOOKS
The only way you can become more familiar with the finances of your business is by regularly monitoring your books – even if you have a bookkeeper.
This is extremely important because it will enable you to identify any possible threats to your business as well as plug any loopholes. Create time to study your bank reconciliation as well as to review any outstanding receivables. Re-emphasising the need for focusing on cash, if you delay your bills collection, you will end up being a banker for your customers.
3. CONTROL YOUR SPENDING
Spending your money without a plan is a recipe for disaster. Just because your competition has put up a glittering signboard doesn’t necessarily mean that you must also do the same.
There is always another cheaper and equally effective way to achieve the same result. Spending money prematurely can lead to cashflow issues in the long run and could cost you more to remedy the situation.
Especially in the early days of the business keep asking yourself – ‘is this expense a must-have or a nice-to-have’?
4. MANAGE YOUR INVENTORY
Avoid having too much inventory that will end up in storage gathering dust, or too little that you keep running out of stock, which causes you to turn away customers.
Always track how much inventory you have so as to avoid over-stocking or under-stocking. Keeping up-to-date sales records will help you to manage your inventory effectively.
5. LEASE VS OWN
While it is satisfying to own your office space or even a fleet of cars, leasing could be the best option for your business if you are tight on cash, or it’s your early days of starting the business.
Do a simple math of lease vs own and see for yourself what is better from a cashflow perspective.
6. HAVE ENOUGH CAPITAL
Most small businesses fail simply because they don’t have enough capital to get themselves through the
startup period. Most entrepreneurs are under the notion that the business will start making huge profits from day one.
To counter this, make sure you have enough saved up to see you through at least the initial 8-12 months. In ascertaining how much cash you may need, do best-case and worst-case scenarios.
7. GO EASY ON EXPANSION
Depending on how business is doing, you might be tempted to expand and grow your brand. While this is not a bad idea, make sure you do your homework. Study the market and look at different scenarios. A hasty expansion exercise can negatively affect your business beyond recovery.
8. DO NOT OVER-LEVERAGE
Although bank financing may be forthcoming (sometimes at unexplainable rates), do remember that debt needs to be serviced, and on time. There are some basic thumb-rules in terms of how much you should borrow for your business, such as debt/equity, debt/EBITDA and debt/service ratios. Ensure your accountant or financial consultant has put these KPIs in front of you before you leverage yourself.
9. HIRE A FINANCE PROFESSIONAL
As an entrepreneur, you will find it difficult to balance your books and even keep up with invoices. To avoid this, hire a professional to handle such duties so that you can focus on growing your business.
Although hiring a senior finance professional may be a burden until you achieve scale, there is no harm in having one on your side for specific advice, or on a regular retainer/time-spent basis, which will not cost you much. This will help you focus on your business and also allow you to plan your future growth strategy. Since your aim should be to ‘get it right the first time’, it is important you have such a resource handy from the very start.
10. USE TECHNOLOGY
As a small business owner, you might not have the financial muscle to deploy a fully-fledged finance department. However, you can still use readilyavailable technology to take care of some of your financial needs.
For instance, you can use cloud-based accounting software to access, track, and update data. Such solutions enable you to see your accounting records and create invoices with ease.
Managing small business finances is not easy, but with the right strategy and discipline, your business can perform as expected. The above tips are a good starting point to ensure that your business doesn’t become a statistic.