Why Middle East start-ups should consider incubators

The journey to success can be a tough one – particularly if you’re a budding entrepreneur with limited resources, experience and know-how to get a product to market.

And with statistics such as ’80 per cent of all new businesses fail within five years’, ’95 per cent of entrepreneurs have a minimum of a bachelor’s degree’ and ‘two founders rather than one significantly increases your odds of success’, you’ve got to question whether you’ve got what it takes to keep the odds in your favour.

Business licensing costs, while reasonable in the UAE, are straightforward provided that you know what you’re looking for and you’re clear on what’s required for your particular product or service; but this isn’t always the case.

Setup costs associated with having a physical space – which is now a mandatory requirement – can also take you by surprise. Expenses such as tenancy and utility deposits, fit-out works, telecommunications connections, ICT equipment and others can pop up very quickly.

And having the right team around you from the get-go is imperative. As an entrepreneur, it’s easy to become a ‘Jack-of-all-trades but master of none’. However, there are some functions that simply require masters.

Take the role of the founder, whose vision needs to transcend the entire concept and operation, as well as specialised functions staffed by people with the business acumen and street-smarts to properly assess business requirements, deal with real business challenges and make recommendations accordingly.

Perhaps though, the biggest challenge for a start-up is knowing when to accept that life as an entrepreneur is challenging and that most start-ups will not be successful 100 per cent of the time.

I’ve spoken to hundreds of budding entrepreneurs over the years, and their number one fear is failure. And I tell all of them that failure is a painful reality, but it is natural in business. The real confrontation is being able to push through the failures, take risks where and when we need to and – most importantly – take hold of the challenges and find a solution.

The concept of incubation hubs has flourished in the Middle East, and it’s no wonder. These gateways for bringing ideas and innovation to the surface are the perfect launch pad for start-ups, which can use such platforms to cultivate growth, offer a new business methodology, manage costs and mitigate risks associated with market entry.

In general, business incubation initiatives feature relatively low-cost entry and investment terms, operating costs and exit costs. In many instances, start-ups can operate under the trade licence of the incubation hub, using their existing facilities, leveraging their accounting methods, and benefiting from an established and experienced team of human resources, administration and marketing executives.

Equally as important as the financial and administrative support, is the role of business incubators as mentors – nurturing entrepreneurs in order to set them up for success, while saving them a significant amount of risk, capital investment and operating headache, as they familiarise themselves with the competitive landscape they are operating within.

In fact, business incubators are the perfect vehicle to bounce ideas around as you are able to tap into a wider network of advisors, with varying degrees of experience and expertise, which gives you so many more perspectives on any given set of circumstances.

Through this process, you will discover that your fear of failure has a direct correlation with the level of risk being taken financially, professionally, personally or socially. And by mitigating risks, you are in effect managing your fear of failure and better able to pursue success.

One of the things I love most about being an entrepreneur is the friendship and support that other entrepreneurs are willing and able to offer. So, if you’ve got an idea, it’s worth considering the many benefits of business incubation. You might be surprised where innovation, collaboration and combined expertise can get you.

Rohit Dalmia is managing director of Smart Shelter