Emirati entrepreneurs Alia Hussain Lootah and Noora M Bin Kalban explain how they learned key business management skills on the job, such as financial planning, accounting, accounting, operations management, logistics and people .
“None of us have a degree in business management. We didn’t even know the basics of financial management until we started working on our business plan for a community art space” Medaf Studio”. What we had was the passion and a deep desire to fill a gap in the market at the time (in 2017) with our start-up by creating a space specialized in multidisciplinary artistic practices. For the rest , from creating a business model to the financial plan, accounting, cash management, we learned everything on the job,” explained the co-founders.
As their startup celebrates its fifth year since its inception this month, co-founders Alia and Noora shared how they learned key skills such as expense mapping and control, price negotiation, building the right partnerships during this journey.
Did you receive financial and other support when setting up your business?
“Huge support came from Dubai SMEs (small and medium enterprises) in the form of a loan through the Mohammed Bin Rashid Fund for SMEs. This was 80% of the capital needed to start the business, while we raised the remaining 20%. We also got our business license at a subsidized rate. In addition, the advice of our families and the suggestions of fellow entrepreneurs were crucial. One thing we want to mention is the willingness of the start-up community -up from the UAE to support new founders like us, which was really encouraging.
What financial management skills have you both learned on the job?
“It’s one thing to have an idea, but implementing it requires understanding various aspects of running the business. Acquiring financial management skills was perhaps our greatest learning curve. We started by doing extensive research based on [price] benchmarking of what was available in our space regionally and globally to create our own cost model. We also learned the importance of understanding and managing cash flow. Paying rent and wages, making purchases, and tracking revenue are all crucial to business survival. We’ve gotten into the habit of reviewing our automated cash flow statement once a month or so. We also learned skills such as negotiating for a better deal. With the world being so connected, it is possible to find anything and everything for less. We realized the importance of expanding the supplier base to get the best price possible. Also, by doing the groundwork on our own, such as visiting licensing agencies, we learned a lot about the components and costs of running a business. »
Do you both receive a salary from your company?
“While we allocated salaries to ourselves, instead of taking them, we reinvested them in the company. In addition to carefully planning expenses, this is one of the main reasons why we have reached the break-even point in less than two years. [by the beginning of 2019]. It has also helped us protect, support and grow the business. Today, our business is self-sufficient, as we reinvest at least 30% of company profits back into the business. »
It’s one thing to have an idea, but implementing it requires understanding various aspects of running the business. Acquiring financial management skills was perhaps our greatest learning curve.
– Entrepreneurs Alia and Noora
How important is it to monitor spending and allocate resources to customer acquisition?
“Because we were early founders and decided to enter a segment that we didn’t understand very well at the time, we were extremely cautious about our spending habits. Like any other business, seeing the return on investment was crucial, but it was even more important to grow the business. By closely monitoring our expenses, we were able to keep our operating expenses low. Being a customer-facing business , marketing is a major area of spending. Initially, we didn’t spend much on marketing and relied on word of mouth, but now we’ve increased our budget. Currently, marketing activities account for 7-10% of our spending. It is important to note that we have deployed a cross-platform marketing strategy including social media activities, YouTube videos and podcasts, among other things, to reach our audience through their preferred channel. »
Have you made any mistakes in the past five years? What lessons have you learned from it?
“Making mistakes is one of the realities of any entrepreneurial journey. Towards the beginning of our trip, we collaborated with another small local business that ran a cafe in our space. Soon we saw that faced with the difficulties of being a small business, they could not pay their own expenses, often defaulting on payments that were owed to us. This experience has taught us the importance of building fair and synergistic partnerships. Another thing that often weighed on us in the initial period was the inability to accurately anticipate expenses. But over time, we have learned to categorize expenses into different slices such as sales, marketing, operations, etc., to balance outputs and plan for growth with more visibility.
What advice would you both give to newbie founders?
“From our experience, we can say that there are many opportunities. We need to find one that matches our passion and goals. It is also important to trust your instincts; if you are convinced enough by an idea, you must implement it. Don’t worry about getting every detail right, you can learn things as you go. We learned almost everything on the job. Also, don’t hesitate to ask people [they could be family, friends, fellow entrepreneurs] for help understanding the business landscape before diving in.