MANAGING YOUR FINANCES, FOR THOSE WHO RUN A BUSINESS // AND KEEPING AFLOAT DURING THE PANDEMIC

WITH ABDULLAH ALJARALLAH | BALANCE BUSINESS ADVIRORY

I had the pleasure of talking on Instagram Live to Abdullah Al Jarralah, Co founder of Balance Business Advisor to discuss how we can financially reduce our hit by the current pandemic whic is effecting the global and local economy with the SME's taking a larger than ever expected setback. financially as well as emotionally. Abdullah shared his view on what is important for businesses to consider interms of their accounting and financing as well as addressing why a busoness plan is crutial when starting your own venture into entrepeneurship.

Let me share with you the summary of what Abdullah advised on,

WHY SHOULD YOU INVEST IN DEVELOPING A BUSINESS PLAN?

It is highly recommended if not necessary for those who would like to venture into a new business to start with a 3-5 year business plan projecting and predicting the growth and development of their new endeavor. Those predictions will be a result of thorough data analysis of the market, competition, value proposition and estimates and data collected for every business module.

 A Business Plan will:

1. Be the birth of your business.

2. Give you clear direction so you won’t go

into it short sighted or even blind.

3. Determine your pricing strategy.

4. Determine your hiring strategy.

5. Influence your resources.

WHEN SHOULD AN OPERATING BUSINESS MAKE DEVELOPMENTS & MODIFICATIONS TO UPDATE THEIR EXISTING BUSINESS PLAN?

Updating your business plan is an ongoing process as long as your business is in operation.

Periodic reviews of the business plan are necessary for the investors and owners and stakeholders to assess clearly if they are performing well, if they are meeting their targets and maintaining their budgeting

The periodic reviews will also project and clarify the strengths and weaknesses that result in the success or failure of the company.

HOW ARE BUSINESSES FINANCED?

There are many ways a business can be financed, whether it is by equity or the owner’s investment, an investor, or a combination of both. Other sources of funding in Kuwait are by Kuwait National Fund or the Industrial Bank both of which offer loans for SMEs.

We are observing a very young attempt to encourage crowd funding in Kuwait but that has yet to be developed and regulated.

Angel Investors are also a source of funding for startups in the seed round of investment, angel investors have large portfolios in high risk investments and capitalize on the success of the few companies that have the potential to grow.

WHAT DO ANGEL INVESTORS AND VENTURE CAPITALISTS BRING TO THE TABLE OTHER THAN CASH?

They bring more opportunities for growth through their vast experience in networking and the knowhow they acquired through the years. They also serve as mentors to many of the companies and startups they invest in because at the end, they want to see the companies they invested in succeed.

ON UNDERSTANDING THE LIFE CYCLE OF A BUSINESS

Abdullah views the life cycle of a business to be similar of that of a human being, it goes from the growth phase to the acquisition on to its maturity and unavoidably to its decline. Decline does not have to be the death of the company if the owners and investors take the right decisions and consider mergers, acquisitions and or venturing into new services and products as the world is changing.

The market in Kuwait has reached a stage where larger older companies might only have one way to maintain their healthy existence and adapt to the changes that are emerging.

They can do so, by investing is the SMEs that can offer the opportunity of growth and adaptation, those SMEs will then have an even better chance of growth and profit.

ON THE CURRENT PANDEMIOC AND THE IMPACT ON SME's

You have to realize that there is a challenge with the current situation and you should have a clear objective and outcomes to work towards during this situation.

You also need to understand that this economic crisis is the result of a known cause, not like the uncertainty of 2008. Once this cause no longer exists the markets will begin to flourish again, with many changes in behaviors for sure, but work and life will resume.

We will never, hopefully, get to experience such a “PAUSE”, so use this precious time to assess your business plan, your strategies and explore new ventures.

WHAT SHOULD WE DO SO OUR BUSINESS CAN SURVIVE COVID-19?

 FIRST UNDERSTAND

1. The objective at this point is not to generating revenue, for most businesses, this is just not the time to sell what service or product they offer.

2. Your main target should be to “keep floating”.

3. There is no one solution that exists in such unpredictable times, the solution is a series of initiatives that would sustain the existence of your business or brand so you can continue after the situation is over.

SECOND, WORK ON

1. Eliminating any expense no matter how small it is if it is not a necessity at this point, even internet bills

2. Do not let your employees go. Firing the talents that will bring back your customers once the situation is over is not a smart business call, although this is the time to let go of the employees you were always intending on letting go because of their performance.

3. Innovate when it comes to sources of income, explore new channels to “float”.

In an ideal market going through a situation like the current, the problem is not of companies, but rather of individuals. We have to be aware that it is a collective and social responsibility that everyone should take part of the hit so that we all can survive.

This is a golden opportunity for you to imagine how your business will behave and adapt to a new market after the crisis.

Plan for new customer behavior, new methods of communication, and most importantly, diversity in your sources of income and savings, as a company.

IN THIS CRISIS: COMMUNICATION IS KEY

And to practice good communication, as a business owner, it is in your best interest to open all channels of communication:

1. With your landlord, so he can do his part and allow you to survive for after the crisis.

2. With your employees, as they should understand that we are all going through times where we need to survive, we have to all live with necessities so we can all go back to work after the pandemic. You are a team.

3. With your suppliers, they must also realize their part in helping your

The question we all dread to ask: When should a business decide to close due to the current crisis?

ONLY IF IT WAS ALREADY FAILING PRIOR TO THIS CRISIS!

During his professional career, Abdullah has worked on multitude of roles and projects that has given him a unique perspective and expertise in investments management, M&A and divestiture, compliance, equity valuations, and business plans. At the level of entrepreneurship, he established multiple companies in the retail sector. Abdullah holds bachelor’s degree in Accounting, US Certificate for Management Accountants from IMA, and currently he is pursuing global master’s in finance at ie Business School, Madrid.
Balance Business Advisory is a licensed Kuwaiti business advisory firm established in 2017 operating in Kuwait and Riyadh to provide professional business integrated consultations that includes financial advisory & accounting solutions, organization development solutions, along with other advisory services to help clients grow their businesses by building a strong partnership with them and to add value through the different innovative services. BBA’s vision is to be a regional hub for trustworthy and reliable business engagements for both talents and clients.

To get in touch with his adisory, you can find their website: https://www.balance-advisory.com/ 

They are located on the First Floor, AlBahar Tower, Ahmad AlJaber Street, Sharq, Kuwait

Client Relation Team/ Mobile: +965-98889121 / Tel: +965-22213825 / Email: cr@balance-advisory.com