Tips for starting a restaurant in Dubai

Costs to consider when opening a restaurant

• Licence
• Rent
• Permissions
• Staff training
• Capital costs
• Staff visas
• Opening stock
• Collaterals
• Website
• Sponsor fees
• Accounting software
• Occupational health cards
• Equipment testing
• EPOS system
• Fire fighting test certificate
• Insurance
• Working capital
• Restaurant consultant
• Accountant

Dos

• If you have an area in mind for your food establishment, make sure that you do your research first by looking at footfall and demographics to ensure there is the target audience to service.

• Do prepare a business plan with full financial forecasts before committing any expenditure.

• Do ensure you have your restaurant food offering and menu established before you make any equipment purchases. We have seen businesses that purchase kitchen equipment before the food offerings have been decided upon which leads to huge amounts of capital being wasted.

• Do cost out your menu fully so that you can establish a pricing policy that covers your fixed overheads. Menu cards should be prepared with the exact ingredients and costing.

• Do engage a specialised restaurant accountant to assist with your financial forecasting and monthly reporting.

• Prepare a detailed marketing plan and utilise delivery channel providers, such as Deliveroo and Zomato. These online platforms could add an extra 40 percent on your sales each month.

• Do prepare a fully comprehensive competitor analysis in order to understand their pricing and product offerings.

• Do prepare a full milestone analysis as part of a fully rounded project management plan.

• Do check the permissions and NOC’s required from your landlord.

• Do check the power requirements of your restaurant equipment and ensure the restaurant unit you choose can support these.

Don’ts

• Don’t choose the first unit a real estate broker offers you. Many landlords will only offer a couple of month’s grace period on the rent and delays obtaining permissions could eat into your working capital.

• Don’t over estimate your first year’s sales.  Be realistic with your financial forecasting to avoid under capitalising your restaurant venture.

• Don’t try to open a restaurant on your own if you do not have any restaurant experience. The majority of restaurant ventures that fail in Dubai are down to owners trying to do everything themselves with no previous knowledge of the F&B sector or Dubai.

• Don’t overprice your menu offerings. With so much choice for the consumer in Dubai, getting your pricing right is fundamental to business success.

Top three ways new businesses can succeed in Dubai

Up to 80 per cent of new companies fail in the first 18 months

Dubai is a global hub for innovation and entrepreneurial initiatives. Here, an entrepreneur investing in an SME is meant to succeed. The government is on your team, and any resource you require is readily available. So, if you’re thinking of starting your own company, take my advice, there are only three things you need.

Up to 80 per cent of new companies fail in the first 18 months. That leaves behind a huge graveyard of ghost dreams. I have started six companies in my career, five of which are still operating. The one that died was a clothing brand. I was 25 years old, and I didn’t research the market well. I lost money and time, but I think the whole project was open and shut within six months, so I learned young to cut and run when I’m in a losing investment.

But why did I fail? What went wrong? Founders of failed companies agree that the top three reasons new businesses fail are:

1. MARKET: They provided a product/service that the market wasn’t demanding.
2. MONEY: They ran out of liquidity.
3. MASTERY: They didn’t have the right people on the team.

I call these the 3Ms of entrepreneurial success.

MARKET

Clearly, my precious clothing brand fell flat on the market. I had great designers, and an amazing supplier, but the market didn’t want my better-than-theirs, super-cool shirts and hats. There was no demand, so my product was what we call a ‘push’ product. It needed a lot of investment in marketing in order to push the product to a market that was not demanding it. With enough money invested in marketing, you can successfully transform a push-product into a pull-product (something in demand). But if I had kept going, I would have run out of money and failed on the money aspect as well. So I had the mastery, but not enough money to compensate for being weak on the market. My advice: invest in some market intelligence and don’t go for it unless you are 80 per cent sure that you have something that the market wants. Alternatively, make sure you have enough money to push.

MONEY

How much is enough? Well, that depends on what you’re trying to sell, to whom, your cost of goods, taxes, overhead, labour, and other indirect expenses. My advice is to start lean. Spend as little as possible for at least a year. My first marketing materials I made myself. One of my early successful companies was a media production company, and guess who the first editor was? Yes, I even learned Adobe Suite to keep labour costs low. Eventually, I made enough to hire editors and buy great equipment, but my initial capital was only Dhs35,000, and that was enough because I kept my operations lean. The Dubai Chamber of Commerce is a good source of information on where and how to access financing options in Dubai.

MASTERY

In Good to Great, Jim Collins said that where you’re going isn’t nearly as important as who you’re travelling with. I agree. There is not enough market or money to compensate for a lack of mastery. My first company was an education provider, and when I built our first official offices, I didn’t include an office space for myself. My assistant asked me where I was planning to sit, and I told her that I’d be either at the boardroom table or in a café downstairs. When asked why, I was thrilled to tell my team that they didn’t need me, the company could run without me, and it was due to their perfect blend of competence and character. Each member of the team was a master in their specific role, and with that kind of team, failure is nearly impossible. A big-man desk in a big-man office communicates high power distance in a company. The more mastery is present in your people, the less that hierarchy is required. My advice: be patient and picky. And for the record, it’s much easier to build competence than character.

With a strong market position, you don’t need much money. And with a lot of money, you can compensate for a weaker market position. Mastery is the only ingredient that’s non-negotiable. In a start-up, you don’t have the extra resources to compensate for bad character or a lack of competence.

With these three key ingredients, your business will succeed. Dubai is a great incubator for turning dreams into legacies. Count yourself lucky to be living in a country where the government is on your mastery team.

Source: gulfbusiness

Top 10 tips for doing business in the UAE

1. Be prepared to negotiate on prices

You will not always achieve your 1st price in the UAE. Everyone loves a bargain so be prepared for this.

2. Build your network

Referrals and word of mouth are some of the best marketing tools in the UAE, there are plenty of professional networking groups out there to help you with this.

3. Be personal

Business is often conducted face to face or over the phone with less reliance on email. Don’t launch straight into a sales pitch; ask after family and the well being of the person you are meeting first. People buy from people they genuinely like.

4. Meetings

These are often rescheduled or start later than planned, be prepared to be flexible. Lobbies of hotels can be good for meetings as they are easy to find but if you are discussing money or issues, a private meeting room such as those found in Business Centres are ideal.

5. Start up costs

Don’t get caught out. There is a lot to think about when starting your business here – office, company formation legalities, sponsorship. A Business Centre/Business set up company can make this very easy for you.

6. Be culturally aware

To be taken seriously by local people, make sure you dress modestly. Be aware of working restrictions during periods such as Ramadan when Muslims are fasting. Let your local client take the lead with greetings, handshakes between male and females can be unacceptable to some.

7. Business cards

Carry plenty. There is a heavy emphasis put onto business cards and it is customary to present these at every meeting with someone you have not met before.

8. A good business address on your stationery gets respect

Prime locations relevant to your business that are easy to find will be best for your company.

9. Keep up to date with legislation

The rules are constantly being updated. You will need a local trade licence and all staff will need visas to work in Dubai. Luckily there are plenty of Company Formation specialists who can help with this.

10. Understand the difference between DED and free zone licensing

A DED licence gives you 49% ownership of your company while a free zone licence gives you 100% ownership but you cannot sell products directly in Dubai

Source: oryxworldbusinesscentre

Business Startup | 5 Do’s And Don’ts To Make Your Business Profitable

5 Do’s in business startup Dubai

1. Select a local sponsor, a UAE national for local business startup

You need to get acquainted with the various facts associated with business startup in Dubai and avoid the problems encountered while launching a profitable enterprise in the UAE.

There are plenty of business opportunities available in Dubai, as well as in other Emirates of UAE. However, if you really want to start a business which must exploit the potential of Dubai then you need a locally registered LLC business.

A UAE national must be taken as a 51% partner who is called a local ‘sponsor’. A local company provides the freedom to locate the business anywhere in the city. For a business startup in Dubai this is a boon because it affords the best choice of locations to suit your budget.

A sponsor must be paid a yearly fee which can be negotiated. Do develop a rapport with your sponsor so that he is ready to help you in sorting out any problems you may face along the way with authorities.

2. Select a Free Zone if you wish to own your business 100%

Keep in mind that the only way for a business startup in UAE to start without taking a UAE national acting as your partner is to locate your business in one of the Free Zones. This is not practical for businesses that must be in city markets like restaurants and retail stores. Also businesses that work with the government have to be registered with a local sponsor.

Not to mention the fact that purchase or rental in a Free Trade Zone district might be high for your budget to handle.

For a business startup, Free Zones offer three great advantages

• 100% ownership
• Speedy start up
• Duty Free customs boundary.

3. Select a Location that optimizes suitability, convenience and costs

Another important step in planning a business startup in Dubai is to determine the most suitable location for the business. Setting up a profit-based enterprise in the city wouldn’t do you much good despite the growing economy if you’re customers or clients can’t reach you.

You need to set up your business in an area that is most profitable for your business or most convenient to your business. A location in the right city can be selected for a shop or an office most known for the type of product or service you are dealing with.

If you are planning a Free Zone company then you must make the selection based upon the criteria of distance, costs and if it is suitable for your product, business model and trade requirements.

A tenancy contract must be concluded. If you’re aiming to start a small-scale enterprise, then the basic amenities, like telecommunication, storage, and space inside the establishment is the basic concern that must also be satisfied. Other services available in the commercial property can vary greatly.

4. Confirm your Visa eligibility and requirement

For a business startup in the UAE a visa permitting you and employees to live in UAE is essential to run your business.

Visas are allowed for almost all businesses.

However their number varies according to a variety of criteria such as the size of the office, nature of business, category of the employee or the investor.

If your business startup in Dubai is a local company then you definitely need to work with your sponsor to get your visas – at least the first time.

Business visa application in Dubai is not as strict as most would think since the bureaucracy is quite open to foreign investors planning to set up shop in the city — any business is good business is the motto here.

However, you need to have your sponsor apply a visa for you as the investor of your business startup.

Aside from your passport and other legal requirement, a letter is also needed from your sponsor to highlight his or her, or your personal information, reason for the visa application, and the likes before processing.

Subsequently you may be allowed to apply for the visas of your employees if your sponsor agrees to give you the authority.

5. Hire a registration agent to take you through the process of business startup

Hiring a business advisory firm to register your business startup may be your best option.

These consultants will not only hold your hand right through the setting up process but will also actually register the company for you. And will help with opening your bank account, arrange for an auditor, do your renewals and offer you nominee services.

You may find their expertise in dealing with the local government bureaucracy and with Free Zone Authorities to be of great help in planning and itemizing the your business startup costs.

In most cases, these firms offer a team of experts to plan out your company registration from scratch — this includes the strategies you need to follow in order to smoothly set up your business, itemizing potential costs, offering licensing and location options, coming up with solutions for potential business hurdles, and so on.

Also, they will take care of all the necessary requirements to help you to have your business registered legally with minimal problems on your end.

Financing is usually not available to business startups. If you are unable to pay for the start up costs, perhaps you should wait before taking this step.

5 Don’ts in business startup Dubai

1. Do not register your company in a Free Zone without taking a look at the available office sizes and preconditions

Often the published information for a Free Zone gives a wide choice of offices. The actual availability keeps changing. A business startup normally looks for the cheapest option.

It is probable that when you actually go for registration of the company you may find that only certain office sizes are available. This will throw your budget into disarray.

It may be too late to change your Free Zone then. Or it may happen that certain offices allow only 1 visa that too only for investor and not for the employees. So do not proceed until all aspects about the office are confirmed.

2. Do not make firm plans based only on published information

Before you finalize the plans for your business startup it is prudent to confirm the validity of the published information.

Rules change in Free Zones and also in the local Department of Economic Development for business registration.

Do not go ahead until you have confirmed your assumptions through a business set up consultant or by actually contacting the relevant authority.

You may discover that some papers may be needed or that some nationalities need special permissions or that some requirements may be waived if you request or negotiate.

3. Do not choose a license category blindly without confirming if it allows your business model

In the UAE, it is not difficult to devise a business model that will not need a change. Very often much change or at least some tweaking is needed.

Make wide possibilities and confirm whether your planned license category allows you all the activities that will be likely in the business model you are planning. Do not choose a license category that is too narrow.

4. Do not open a bank account without confirming the bank charges

Banks levy varying charges. For a business startup these can amount to a substantial sum for a bank dependent operation. Always confirm the requirements and charges beforehand. Do not choose a bank based on only the reputation.

5. Do not sign a sponsorship with local sponsor without a written legal agreement

Your business startup may need a lot of support initially. A local sponsor may want to charge separately for some services.

Do not go ahead with sponsorship until both sides have agreed on what to expect from each other and a written agreement is drawn up and attested in the local court. Do not rely only on verbal understanding.

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All you need to know about local sponsorship in the UAE

It is very important for foreign investors to understand the role and functions of local sponsors

One of the challenges to start and operate a business in the United Arab Emirates ‘mainland’ is the element of the local sponsor owning 51 per cent of the business.

Historically, the legislation in Gulf states has only allowed partial ownership to expat businessmen. It is now changing and a number of GCC states are passing new legislations and establishing free trade zones allowing 100 per cent foreign ownership.

However, in the mainland, it is still a 51 per cent (local) and 49 per cent (expat) shareholding structure.

Hence, it is very important for foreign investors to understand the role and functions of local sponsorship. Here we will tell you everything about local sponsorship in UAE.

WHAT

Local sponsorship is a compulsory condition for a person of foreign origin who wants to establish a business in the UAE mainland. This condition doesn’t apply to freezones. There are three types of local sponsorship and the selection is based on your business activity.

Types of sponsorship

The three types of local sponsorship include corporate sponsorship, individual sponsorship and the association with a local service agent.

Corporate Sponsorship – When a UAE national company owned by locals holds 51 per cent of the share and liabilities of a company owned by an individual or group of partners of foreign origin. In this case, the business is sponsored by a company, rather than an individual.

It is a myth that the local sponsor will share only the company’s profits; it is accountable for all the actions.

When – Works when you want to set up a limited liability company, a trading company or a manufacturing unit.

Individual Sponsorship– When an Emirati national in his/her individual capacity becomes your sponsor. It is not necessary that he/she is also operating a business in the same domain. The individual may be a professional, a government employee in the UAE or a businessman.

The Emirati will also hold a 51 per cent share and a 51 per cent liability of the company. In this type of sponsorship other options are also available. The local sponsor can hand over the power of attorney to the foreign partner and ask for a fixed annual fee.

When – Works when you want to establish a trading company or a limited liability company

Local Service Agent – When a professional – a doctor, an engineer or an artisan – wants to set up their business by offering professional expertise. In this case you will require to appoint a local service agent. This agent will merely act as a representative of the company in all administrative dealings with government departments (for immigration and ministry of labor formalities). He/she will not hold a 51 per cent share of your company.

The remuneration of the agent is normally agreed on an annual fixed fee basis and is a matter of commercial agreement. It can vary depending on the social and family prominence of the service agent and the precise contribution he/she makes to the business.

When – A local service agent can be appointed in following cases –

• For professional licences
• For branch of foreign companies
• For representative offices

Source: gulfbusiness

Big 5 exhibitors eye $2t construction industry

The Big 5, the largest construction and building industry showcase in the Middle East, opened on Monday at the Dubai World Trade Centre with more than 3,100 exhibitors showcasing their products and services targeting region boasting a vibrant construction pipeline of around $2 trillion worth of projects.

The event was inaugurated by Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry.

dmg events, organisers of the four-day event, said the exhibition assumed greater significance as Dubai is driving the new round construction boom in the region.

The value of Dubai's construction projects in the execution and planning stages is expected to reach a record of $390.7 billion this year. A total of 13.7 per cent of these projects, which are valued $53.5 billion, are currently under progress despite the oil slump.

A report estimated that the total spend on infrastructure projects related to Dubai Expo 2020 might reach up to $18 billion, with estimated development costs of the Dubai South area between $8.1 billion and $8.7 billion.

The UAE, one of the world's most attractive construction markets, hosts a robust construction pipeline of more than $700 billion, over one-third of the GCC's pipeline, according to the recent report "Powers of Construction: 2016" by the consultancy Deloitte.

Legoland Dubai's Castle Kingdom and Building Experience joins the Abu Dhabi Midfield Terminal, Al Habtoor City Theatre, Dubai Opera, and NAS Arena are some of the UAE projects that won Tekla Global Building Information Modeling (BIM) Awards for their leading use of 4D digital models that can enhance productivity and collaboration.

"This year has been a seminal moment for GCC construction innovation, and 2017 will see continued momentum with government BIM directives, 3D printing and pre-fabrication, and BIM gaining wider take-up. The UAE's strong showing in international awards demonstrates the country's standing as a global BIM leader," said Paul Wallett, Regional Director of Trimble Solutions Middle East.

The Big 5 is expected to draw 75,000 participants along with national pavilions from all major exporting countries in East and West. This year, the teams from France, Italy and Brazil are in force with their innovative products.

This year's Big 5 edition has several key features including dedicated product sectors, live product demonstration, a one-day Excellence in Construction Summit, a tools demonstration besides a brand new floorplan layout clustered in five product sectors. The five product sectors in which exhibitors are grouped this year are: Building Interiors & Finishes, MEP Services, Building Envelop & Special Construction, Construction Tools & Building Materials, and Smart Building & Design technologies.

Another key highlight of the show is the dmg events' strategic partnership with Dubai Economic Council for the debut "Excellence in Construction Summit" on the sidelines of the expo. Taking place today, the summit will draw 500 industry leaders to discuss current and future trends of the construction sector in Dubai, the GCC region and beyond. Besides this, the giant construction expo will also feature key events such as the FM Expo, PMV Live and Middle East Concrete thus providing complete building solutions.

Source: khaleejtimes