Recessions are difficult times. Companies are getting wound up, people are losing their jobs, and the luckier ones are taking losses from cash reserves. Although the United Arab Emirates isn’t in a recession yet, there is still uncertainty in the air and there is talk about impending dark clouds.
However, it is not all bleak! Small businesses, with their agility, will be able to take advantage of the weaker economy and quickly come on top. Startups operate with lean business models and they maximize value for the consumers. Although economic uncertainty never becomes a situation that’s desirable, some of the greatest businesses in the world have started during recessions or downturns. More importantly, a lot of reports suggest that small businesses are some of the country’s greatest employers because of the fact that they scale in becoming big corporations.
Here are more reasons why it is worth considering business setup in UAE during a downturn:
Also Read:Procedure of Closing a Business in UAE
Availability of Inexpensive Supplies
With things being a lot cheaper now, companies are selling of their goods, assets, and equipment at much lower costs. When you are just starting your business, you will see this as an excellent opportunity as it helps in minimizing overhead like software and office rent as well as the one-time starting purchases like printers, laptops, and more.
The best thing that you will be able to do right now where there is much uncertainty is identifying your business partners, suppliers, and vendors which are in need of moving inventory. You can tap in the businesses that have to sign up brand new clients at reduced rates. You will then be able to save costs or even negotiate long-term deals for payments which can remain even when the economy starts recovering.
Better Credit Options
As businesses are looking for emerging options for relief in order to help the improve their cash flow and mitigate loss, you should be checking out more traditional options for credit. There is a great chance that credit card companies and banks are now decreasing their interest rates significantly in order to encourage the spending of the public. This is excellent news, especially for those that are starting their business, as credit cards and loans will carry lesser penalties and potentially higher credit limits.
Keep in mind that if you end up getting a loan, you would have to make a solid business model or business plan, including forecasts and financial documentation as they’re requirements for applying with most lenders. The requirements will be your application’s support and also assure lenders that you’re thinking in the long-term perspective. Not to mention the fact that you know exactly how to manage funds you are borrowing effectively.
More Access to an Investment Fund
One thing that does not typically end in a financial crisis would be investors looking into funding small businesses and startups. Oftentimes, an angel investor is looking for a promising prospect which allows him or her to move money from the stock market then onto a money-making business venture. This doesn’t only provide security for the investor even when a startup can be inherently risky, it also provides a lot of opportunities for your business to acquire some extra funding.
The key thing for you to remember is that when you are pitching to an investor, you have to be ready with an executive summary that is thorough and precise. This should be available for review. You would also want to put focus on the ways the business will work even with economic downturns and how you are using ways in cutting costs and delivering better services.
Make sure you are able to demonstrate the market position of the business as well as competitive advantage and proof of the fact that the target market is currently on a lookout for alternative options. You would also want to have sufficient financial planning which displays how the business can function following the crisis, presenting the fact that you have placed long-term thought onto multiple situations or scenarios. It won’t only help your idea appear less risky to an investor but also assure potential investors that your business is not only a quick grab in making a couple of bucks during a downturn.
There is Less Competition
A healthy economy often attracts more competition. An established business is thriving plus more small businesses take chances in expanding. This can all evaporate during a crisis, effectively leaving room for the entrepreneurs that are willing in taking chances.
The fact that you’ll be able to enjoy less competition as you enter the market is among the best reasons why you should consider business setup in UAE right now.
If you want to know the process, then don’t hesitate to call our business setup specialists here in FAR Consulting Middle East!