As startups begin to scale their operations, they often encounter a number of challenges, especially in the Middle East. Luckily, entrepreneurship is continuing to flourish in the region, which means that more resources and opportunities for guidance are becoming available every year. Before expanding, it is critical that company founders understand the challenges that they will likely encounter and create plans for dealing with these issues. By thinking strategically about scaling up, entrepreneurs can ensure their company’s viability for years to come. While the environment in the Middle East remains challenging, it is far from impossible to grow companies successfully, as demonstrated by the large number of startups claiming impressive market shares.
Scaling Challenges Faced by Middle East Entrepreneurs
The challenges that Middle Eastern entrepreneurs face when it comes to scaling operations are not markedly different from those experienced by other business leaders around the world, but the conditions in the Middle East make some of these challenges especially pronounced. For example, entrepreneurs need to increase revenue as they grow, which means attracting great marketers and collecting market knowledge. Marketing in the Middle East presents a special challenge, because of the diversity of cultures, languages, and countries. A campaign that works great in Afghanistan may not appeal to potential customers in Bahrain or Egypt.
Apart from increasing revenue, entrepreneurs can fuel growth by securing additional investments. However, the investment ecosystem in the Middle East is still in its fledgling stage, and securing funding for small- and medium-sized businesses is still far from easy. Moving forward, it will be critical for entrepreneurs and investors to increase communication and knowledge-sharing, to encourage greater investor confidence and help investors identify the real needs of entrepreneurs.
Expansion also involves attracting new talent to the company and then retaining top-performing employees. The Middle East is home to a number of leading universities, especially in the field of technology. However, these schools have received criticism for teaching from a theoretical, rather than practical, perspective so that students may lack the real-world skills they need as they enter the workforce. One way to deal with this hurdle is to forge partnerships with local schools and hire students as interns so that they receive training and gain the skills they need to benefit the company once they graduate. Entrepreneurs should also prioritize talent retention and ensure that they offer competitive pay and benefits to keep their teams intact.
When companies choose to expand, they need to find partners that can help them gain market access. In the Middle East, a number of legal and regulatory concerns make it difficult to expand into new territories. To counter this issue, entrepreneurs need to communicate their needs to their respective governments. Attending local entrepreneurship events and becoming part of local business networks can help entrepreneurs ensure their voices are heard. Participating in these organizations and events is also a great way to network and form the partnerships needed to scale.
Key Tips for Successful Startup Scaling
The following tips can help entrepreneurs think beyond the most immediate challenges in scaling their operations and ensure that they are ready to grow their businesses.
- Scaling is about more than growing vertically and horizontally. As businesses expand, entrepreneurs need to think about redundancies that are created and jobs that are no longer needed. Company leaders do not necessarily need to fire employees who have become superfluous. Instead, they can move them into new positions that continue to support the growth of the company. At the same time, entrepreneurs need to be honest about when something is no longer working and have the boldness to trim the fat and keep operations lean. At this time of the company’s lifecycle, it is critical that no money go to waste.
- Deal with issues as soon as they become apparent. When entrepreneurs are blind to an issue or fail to make it a priority, the company can quickly take a nosedive. Scaling necessarily takes individuals out of their comfort zone, which can result in conflicts. Throughout the process, company leaders need to remain calm and think clearly about how to prioritize issues. Too often, people tell themselves that something can wait and then experience serious ramifications. Scaling requires dealing with issues headfirst.
- Change the management structure to match the demands of growth. As companies scale their operations, management structures necessarily need to change, which often means that founders will need to relinquish at least some control to other managers. Founders need to focus on hiring people that they can trust and creating an effective leadership structure so that they can focus on the issues that really need their attention, without feeling the need to micromanage other processes. As the pressure to expand increases, founders may feel pressured into making hasty hires, which could lead to disaster.
- Make use of local tools. Accelerators and incubators are great resources for finding professional help with scaling and advice from knowledgeable business leaders. Many organizations offer classes and other opportunities geared specifically toward entrepreneurs who are expanding their companies. For example, Astrolabs offers a Scaling Online Startups (SOS) course held in cities across the Middle East.