Top tips from Dubai entrepreneurs to avoid restaurant business pitfalls

Chef working at Mitra Indian fusion bistro at Al Seef on Dubai Creek. (Supplied photo)
Updated 07 June 2019

Top tips from Dubai entrepreneurs to avoid restaurant business pitfalls

  • A big mistake is to underestimate cash requirements in the crucial first few months
  • Sometimes a contrarian approach can help brands stand out, says one entrepreneur

DUBAI: More than a thousand — 1,109 to be precise — new restaurants opened in Dubai last year, in one of the fastest-growing industries across the UAE.

That’s one restaurant for every 265 people in a city of 3.1 million, so it’s no wonder that so many new restaurants quickly go out of business. 

Beyond business plans and funding sources, Dubai industry insiders suggest a list of questions anyone looking to break into the food business in the Middle East & North Africa (MENA) region should ask themselves.

Have you budgeted enough cash until break even?

Underestimating cash requirements in the crucial first few months while letting costs balloon out of control is a big mistake that new restaurants make, said Mazen M. Omair, founder and president & CEO of Momair Trading.

“Create a cash-flow budget for the first three to six months using conservative revenue estimates and allowing for unexpected expenses. This will help you track cash on hand, business expenses and how much revenue you need to keep your business afloat until revenue starts growing.”




Mitra Indian fusion bistro at Al Seef on Dubai Creek. (Supplied photo)

Have you got a contingency fund?

For Shivam Goyal and Shipra Khurana, who opened Mitra Indian fusion bistro at Al Seef on Dubai Creek last year, unexpected expenses were a constant headache. 

“While signing the (rental) agreement, you (may) invariably ignore many mall charges that haunt you later, such as chiller charges, gas charges, mandatory annual maintenance contracts for different things,” Goyal said. “So don’t be in a haste to sign the lease agreement without thoroughly going through it even though it may run into hundreds of pages. Also get them ratified from a law firm to save hidden costs later.”

Does your restaurant reflect your brand?

The need to keep “sunk costs” low often has entrepreneurs settling for cookie-cutter interiors.  

“The number one design mistake entrepreneurs make is trusting that their passion will transfer to the interiors and branding organically,” said Jacqui Shaddock, partner at H2R Design, an interiors architecture and branding agency.

 “The most important thing, when a concept is strong, is that the story is told cohesively. There’s a strength in consistency.”

Do you know your message?

Consumers respond to clear messaging but sometimes a contrarian approach can help brands to stand out, said Bhavika Bhatia, a 24-year-old former graphic designer who relied on family catering expertise to launch Moreish Restaurant & Cafe last year.

“Vegetarian and vegan food has surged remarkably over the past two years, and it’s only going to grow exponentially,” she said. 

But in a city that loves meat, using those labels can work to a restaurant’s detriment.

“Not marketing our restaurant as vegetarian/vegan has helped us avoid filters and brought in customers who would otherwise think little of a meatless meal.”




Dessert cafe Pastryology. (Supplied)

Do you have enough practical, and local, knowledge?

Ahmed Abdulla Tahnoon, a 31-year-old Emirati, took the leap of faith without hospitality experience when he decided to bring Japanese street food to Dubai with Spheerz, a restaurant that grew out of a kiosk at Global Village.

“I had no business background or experience, but as an engineer — and problem-solver — I put a lot of effort into reading books and online publications until I felt ready,” he said.

Reading wasn’t enough, though.

“At the end I needed to learn from the field itself.”

Do you know when to bring in the specialists?

“As entrepreneurs we tend to be perfectionists, especially when it comes to our business and getting things done. We often find ourselves doing more than we can. This approach is inefficient and distracts us from making more important decisions in growing the business,” said Aisha Mohammed Sharaf, a 25-year-old Emirati who has been running the dessert cafe Pastryology with her husband Tariq Yousef Taher, 32, for more than a year now.

She said it was important to realize when to trust in outside knowledge.

Do you have staying power?

Starting your own business will test your patience, said Zubin Doshi, the 27-year-old founder of ice-cream Scoopi Cafe.

“No business takes off immediately,” he said. “Keep in mind that you’ll need a minimum period of three years before you start seeing actual results.”

• This report is being published by Arab News as a partner of the Middle East Exchange, which was launched by the Mohammed bin Rashid Al Maktoum Global Initiatives and the Bill and Melinda Gates Foundation to reflect the vision of the UAE prime minister and ruler of Dubai to explore the possibility of changing the status of the Arab region.

 


UK suffers biggest job losses since 2009 as coronavirus takes toll

Updated 11 August 2020

UK suffers biggest job losses since 2009 as coronavirus takes toll

  • Mounting job losses are expected as Britain winds down its job retention scheme which protects employees

LONDON: The number of people in work in Britain fell by the most since 2009 in the three months through June as the coronavirus crisis took a heavy toll on the labor market, even with the government’s huge jobs protection scheme still in place.
Led by a record plunge in self-employed workers, there were 220,000 less people employed in the second quarter, the Office for National Statistics said.
Separate tax data for July showed that the number of staff on company payrolls had fallen by 730,000 since March, sounding the alarm about a potentially much bigger rise in joblessness.
Mounting job losses are expected as Britain winds down its job retention scheme which protects employees. It is due to close at the end of October.
“The cracks evident in the latest batch of labor market data are likely to soon turn into a chasm,” said Ruth Gregory, senior economist at Capital Economics.
British finance minister Rishi Sunak said the figures showed the government’s support programs were working but job losses were inevitable.
“I’ve always been clear that we can’t protect every job, but ... we have a clear plan to protect, support and create jobs to ensure that nobody is left without hope,” he said.
The unemployment rate unexpectedly held at 3.9 percent but that reflected an increase in people who had given up looking for work and who were therefore not considered to be unemployed, and people who said they were in work but were getting no pay.
Economists polled by Reuters had expected the unemployment rate to rise to 4.2 percent. Last week the Bank of England forecast the jobless rate would hit 7.5 percent at the end of this year.
“Government needs to step in and help those who are likely to lose their job retrain for new openings in different sectors,” KPMG economist Yael Selfin said.
The number of self-employed people fell by a record amount in the three months to June, led by older workers, while the number of employees rose — something the ONS said was partly accounted for by workers reclassifying themselves as employed.
The number of people claiming universal credit — a benefit for the unemployed and those on low pay — rose to 2.689 million in July, leaping by 117 percent from March.
Pay fell by the most in more than 10 years in the April-June period, down 1.2 percent, reflecting how workers on the job retention scheme receive 80 percent of their pay. Excluding bonuses, pay fell for the first time since records began in 2001.
However, there was a small increase in job vacancies in the three months to July.
“The increase was driven by small businesses (less than 50 employees), some of which reported taking on staff to meet coronavirus (COVID-19) guidelines,” the ONS said.