Does everyone involved in the process understand what is necessary for an entrepreneurial explosion in the country
Mohana Prabhakar

Be your own boss, make your own rules, and get rich quick: immensely powerful messages that seem to strike a chord in every young heart. Now tie this in with a booming econ-omy, growing awareness and exposure to the outside world, the magic of the Internet and most importantly, a youthful nation – and that is a powerful mix. Probably now, more so than ever before, it is important to sit back and look at the dynamics of entrepreneurship as the young Omani sees it.

That he is keener than ever before to start his own business is in no doubt. Mohammed al Balushi, director, Intilaaqah Oman, who deals with budding entrepreneurs every day at work, offers some startling figures relating to people who started a business after training with Intilaaqah: from 65 start-ups, after seven years of the Intilaaqah programme, currently there are more than 1,330 start-ups. The number of entries received over a ten-day period for the Intilaaqah awards last year touched 523 from just 45 in the previous year. This year, BankMuscat spun off one of its long existing business units into Al Wathbah that provides a comprehensive suite of lending options for the small and medium enterprise (SME) sector. And why not? This is after all a nation whose very first successes were men who started as merchants and crossed the seas for business.

Ali Amin Ramadhan, AGM, SME credit and marketing at BankMuscat, elaborates on an interesting progression that lies behind the current increase in entrepreneurial fervour.

All the big business houses that exist today were created in the 70s and then, there was a mindshift in the 80s. “There were so many government opportunities and people were automatically attracted towards these jobs.” This changed again in the 90s. Two things happened. One, the private sector began to flourish and this became another avenue for jobs and at the same time, there weren’t as many jobs easily available in the government sector anymore. Two, people began to go abroad for travel and education and this opened their minds further to the possibilities of new business ventures.

“People’s mindsets have changed. The private sector is booming and there are a lot of opportunities out there. With the boom in the economy, people who have the knowledge and ideas are willing to take the risk. We now live in a global environment. You travel, you see something and you think it may work here,” adds Ramadhan.

Name : Dr Zahra al Rawahi
Business : Scientific and medical software

“I think women tend to hesitate to start a business. They would join someone who is starting a business, but starting something on their own might seem difficult. The fear of failure stops most people but they have to step out of it. I tell my graduate students who are looking for job: why don’t you make your own jobs? Jobs come with ideas and once people start thinking, there will be enough jobs” -
BusinessToday - August 2006

The psyche behind it all
While a majority of the youngsters who come to Intilaaqah want to get into business to be their own bosses, and some come from families that have traditionally been involved in trade and commerce, Balushi finds that some youngsters also come to them because they could not secure jobs. “They look at business as their last resort. We have to deal with them with sensitivity because shifting them from that attitude to one of a successful businessman is difficult. They want to manage a business until they can secure a job.”

In their Bright Ideas training programme, adds Balushi, “We tell them that starting a business is a valid option that they need to explore, before making a career choice. This is in addition to the other two options, which are working for the government sector or for the private sector.”

For those actively seeking to start, the name of the game is awareness. There have been more new products in the market. People are coming up with new ideas that did not exist five or ten years ago and all of this because of higher exposure levels.

There is also the trend that any banker or sociologist in town will attest to: the desire to live well and often beyond one’s means. In such a situation, a business is seen as a way of supplementing one’s income. Continuing with a day job, primarily for the security of a steady, assured income, and doing a business on the side is common.

And then, there is the ‘silent partner’ segment. This practice has been prevalent in Oman for decades and continues to flourish today, where the assets (and the attendant liabilities) are in the name of the Omani partner, but the actual operations are in the hands of another (usually an expatriate). Though the reality is completely contradictory, says Ramadhan, he sees it as balancing his risk. “Psychologically he feels safe because he already has a steady salary; and when he starts a business and hands it over to someone else to run, he believes it’s a minimal risk situation with a bonus of two incomes.”

Name : Najeeb al Balushi
Business : Restaurants

“Whenever I went out with my wife for a meal, I would look at the crowded restaurant and tell her we will open a restaurant some day. The reality is completely different. Driving home from Seeb every night (his first restaurant) around midnight was so depressing knowing that the day’s sale wasn’t even covering my expenses. But if you are destined to cross a hurdle you will do it. No matter how hard you try or what project you have, it may backfire. The greatest thing is faith” -
BusinessToday - February 2004

The real world
In the real world, the above is anything but safe. Needless to say that down the road if there are problems of say bankruptcy or fraud, it will be the business owner who is ultimately responsible. Instances of such silent partners blindly signing documents, taking loans and clearances, often without even knowing the full nature and scope of activities of the business, are hardly uncommon.

Many advocate that a business can succeed only when you give it your all. Take Najeeb al Balushi, who owns and runs a successful chain of restaurants, including China Town, Golden Spoon, Tropical Ice cream and Juices and the recently launched Sidewalk Café. In business for over 12 years now, though he started on his entrepreneurial journey while still working with NBO, in 1993 he quit his job. “Initially I was running the business parallel to my job and I soon realised that I couldn’t give enough time to both.” Balushi had to decide whether he wanted to work hard at his job to rise in the organisation or take the plunge and follow his dream. He chose the latter and six years of losses notwithstanding, his sheer perseverance and focus on making a success of his business has reaped him dividends.

Hani Ali Mirza, managing director, Bin Mirza International, that owns the very successful franchises of Nando’s, Second Cup and the newly opened Cinnzeo, makes a very valid point. “I think people do both as a kind of security. We have a developing market, not a massive one. We can go into the international market but that’s difficult.”

Having said that, Mirza himself, like a true entrepreneur, viewed the market as one that kept him focused on how to take his business forward. “You shouldn’t stop thinking with the customer who walks into your shop. You ideate more often to keep the limitations of the market from affecting you and you go out and get your customer in.”

Either way, one can’t argue Ramadhan’s statement that it is a very good sign that people are going into business in the first place. “SMEs form the backbone of any economy. This is at least a start. May be later, when they see the business succeeding, they would even change their mind and only want to do the business.”

Name : Laila al Farsi
Business : Nursery school

“There are certain stages that every business goes through and you have to be tough to see it through. Most beginners seem to think you can do it in one year, two or three, what actually takes ten years of hard work to do. You have to be patient” -
BusinessToday - February 2004

Is he ready
Unfortunately or otherwise, success in business has an annoying but inevitable habit of boiling down to the mundane. It’s exactly what your father and your grandfather kept drumming into your head: planning and hard work. Sounds obvious, but this is one of the basic problems that plague many of today’s would-be entrepreneurs. A well-written and thoroughly researched business plan is a rarity, as also the understanding that running a business can be a 24x7 job.

While the Internet serves as an amazing source of creative business ideas, the journey from a bright spark to a properly executed business plan is a long one. Says an official who works with a public sector funding institution, “Besides all the excitement and dreamy visions, we need them to be able to project the future better. They must study the market they want to enter, which will help them come up with a feasibility report. A bright idea you found online is not enough to bring money in.” Not surprisingly, banks would balk at lending without collateral in such cases.

It’s about experience, exposure and knowing the market. Bankers find the probability of success much higher in those who have come up with an idea while working in a particular market and has found a gap that he believes he can fill. Without experience, people don’t get to gauge their limitations. Skipping steps can work in exceptional cases like Bill Gates’, but for the rest, they end up missing a lot of the organisational skills that they would have otherwise picked up along the way.

A common reason for failure is the complete lack of understanding of finances. Borrowing short-term for long-term requirements or vice versa is a familiar malady. The inability, both to distinguish revenue from profits and to heed the importance of reinvesting in the business, is widespread.

Says Balushi, “Ten years ago, I worked with an organisation that dealt with entrepreneurs. And when we looked back at the failed projects, most of it was not because of wrong marketing strategy or failure of fixed assets but due to lack of working capital and its mismanagement because they didn’t appreciate the ploughing back of funds into their businesses. They thought that any extra earning was just profit.” Ramadhan believes it’s equally important that entrepreneurs be able to judge for themselves the risks involved in the area they are getting into. “You must be able to judge your capabilities and more importantly your limitations. If you want to take on a half a million rial project with a capital base of RO10,000, you are doomed before you start.”

Mirza advises young entrepreneurs to choose their business carefully. “You may think it’s easy to run a business but it’s not. It takes a lot of planning and effort. You have to believe in the product and not just get into it because you think it will make money. I can’t sell anything if I don’t believe in it because the customer won’t either.”

Name : Ali Hameed al Saleh
Business : Various

“It is essential for any entrepreneur to specialise. One should stick to a business and be good at it. If a business reaches a saturation point, you have to move on. It’s the challenge that drives me. When I look at people who have reached the top, I think as to why I cannot reach there. With hard work and patience, I believe I can do it” -
BusinessToday - January 2006

Is the infrastructure ready
The upside is that being successful has nothing to do with age or prior experience if you have the guts to go for what you believe in, however new the idea may be. And it’s important that the environment supports this. Consider Aimn al Rahbi, who was just 20, when he started Nails, a very successful salon four years ago, financed with his savings and loans from family and friends. Says Rahbi, “When I went for permission initially, they refused. A nail bar, only for nails – ‘we’ve never heard of it’. I told them it was a new idea, new for the country but it was just that they didn’t know such a business could be possible.”

This problem is even more acute when you are looking for government funding. A few years ago, Fawz al Rashdy, after completing a course at Intilaaqah, identified a business opportunity in eye laser centres. He applied for a subsidised loan to open a centre in Muscat, but was refused. “They told me I should start my centre in Sohar or Salalah. But everyone knows Muscat, and even those from Salalah and Sohar like to come here for their treatment.”

Open-mindedness to new ideas like a rifle shooting club, a skateboarding park or tech-based ideas is exactly what young entrepreneurs are crying out for. Says Musallam al Shukairi, CEO, TradeMax, “The biggest challenge is to introduce a new idea. Whenever a new idea is implemented, there is bound to be resentment, as people don’t like change. People are comfortable with the status quo and so a new idea takes some time to get accepted.”

When it comes to procedures, adds Mirza, “Starting up wasn’t easy because it’s only when you moved up one step did you see the next. You never saw the whole staircase with a door at the end. I think it’s very important we have the right people at the right spot. Low awareness all around is a problem.”

Rules and regulations pertaining to Omanisation is often another stumbling block. No one has any doubts that Omanisation is the way forward, but realities of business may dictate different terms. Says Rahbi, who wants to expand his business to Sohar and Salalah, “I am spending 70 per cent of my time running around ministries and working on getting visas and labour cards, instead of running my business. I have no problems hiring Omanis, but if they aren’t willing to do jobs like manicures and pedicures, what am I to do? I can’t expand unless I have staff.”

The way out
Coordination, communication and better understanding of the market on both sides seem to be the key essentials in the coming of age process of today’s entrepreneur.

Says one business consultant, “You have to cut down on the processes of starting a business. It is far simpler with the one-stop shop than it used to be, but there still needs to be better coordination between all the parties involved. Questions must be asked because no one wants a failure, but failures are a healthy and key component in success: you can’t say no because you are afraid of failure.”

Communication is another cornerstone in the process. Creating community awareness at an early stage would build more aware entrepreneurs, improving their chances of success. Says Mirza, “In the UK there are students who make business plans as early as the ninth grade as part of the curriculum. They do a detailed study under the guidance of professionals. That’s where we should start. It’s not about leaving school and then starting something because there is nothing else to do.”

Balushi avers that the process needs to start at school. “We have collaborated with MOE and SQU in raising career awareness among schoolchildren and university students. We participated in preparing the booklet How Do I Plan My Future, which was distributed to all students at grades 10,11 & 12. For students of SQU, we launched the website fanaar.com, which gives them options after university, based on their qualities.”

It is equally important that the business community come together and share their experiences. Says Mirza, “Despite competition, we need to work together to grow. It would be better and healthier if we both made money instead of only one of us.” The reason this doesn’t happen is mainly because businessmen feel threatened and, adds Mirza, many believe that it is not their place to interfere in others’ business. “You don’t have to interfere but you can always share your own experience. You’re discussing history anyway, something that has already happened and cannot be changed.”

Insitutional lenders also talk about the lack of communication between them and the entrepreneurs. “It would work so much better if they come and talk to us when they are having a problem. It’s like they are afraid to give us the bad news until we find out for ourselves when they default. On the rare occasions they do, we are there to work on a solution together.”

At the end of the day, the consensus seems to be that while the climate is just right for entrepreneurship, there are definite holes that need to be filled. More advisory councils and entrepreneur centres for small businesses are needed, as are focal points from where information could flow about where business is available. For example, with the billions that have gone into industrialisation in Sohar, it’s obvious that this in turn would need to be fed by a number of ancillary agencies. An entrepreneurial centre in an area like that could spawn a number of successful businesses.

The rest is up to each individual. As they tell you in the business school, the market is never small, never limited. You are. It’s one’s attitude and abilities that define one’s success. One thing every young entrepreneur would do well to remember though: starting a business is like starting a relationship. The best time to start it is when you have enough time to devote to it.