business coach and consultant good morning and thank you for joining us good morning it’s a lot of change in weather today so i get my sweater on mr abdul um from your point of view what are the major opportunities and challenges facing the smes nowadays in egypt yeah i think like smes is like the biggest question mark and exclamation mark when it comes to the egyptian economy because we know that over 90 percent of employment in egypt goes to micro small medium enterprises and also we see a lot of potential from that sector all around the world and i think like uh like according to a lot of like economic projections egypt is projected to be among the one of the 11th largest economies and that requires change in the small medium enterprises sector and from my perspective working closely with entrepreneurs and small medium enterprises in the past 12 years i can see that there’s movements that could be done with the entrepreneur the person who’s running the business and the way they lead the business and and these actually also they start getting more apparent with the changes in economic conditions with technology etc and i think like on top of that comes into that the uh the idea that goes on was change always are you fixed or are you changing the change so it’s fixed with this growth mindset are you growing with the changes or are you fixed in the way things are working i think this is a very very big challenge for like businesses and individuals who had been like running a certain lifestyle thinking in a certain way and now we need to change that into like this is the way it works this is a new way it works and that’s how we should grow with it yeah and that second to that and also a sub idea to that is basically lots of businesses are relying on what we call it hand to mouth which basically i’m gonna go it’s like employment it’s just like remaining by the end of every month that i get my check and then i live off that check and i think majority of small medium enterprises are also kind of being operated with the owner thinking the same way which also it’s that it’s a downside when it comes to innovation and looking at different possible ideas and changes so how do you really escape this hand to mouth lifestyle and i think with that also there is it is a sense of excessive competition so there is there is a sense of copycatting anything that happens so if there is a type of business that’s working right now like there’s a lot of copycats that operate on that business and there is little innovation and there is a there is a huge sense of like it’s it’s all competition competition other than looking at the strategic partnerships so all these are different variables that if the owner and the entrepreneur focuses on solving that within themselves i think they would be capable of getting over any changes or challenges within the economic like environment in which they operate right and now when it comes to business and small businesses especially specifically personal contacts and relationships are very crucial how far do you think personal contacts would lead to the success of a small business i think definitely while operating a business getting personal with the people that you work with but actually for building better relationships and much more fluid dynamics of how do you interact but i think one of the challenges for the way that we operate businesses in egypt is that it becomes about for very strategic decisions in terms of who i’m gonna bring in to do a specific job it becomes about those that i’m most connected with not those who are most competent which is which is it’s always a downside for businesses because if i want to make my business successful in a competitive environment i have to be looking for the most competitive way to do things and if i rely on my personal connections on like people who i kind of owe something or they owe me something so there is always these kind of um relationships as slightly complicated and that these really influence the decision making on which that who do i bring to the business so getting into a pragmatic mindset in terms of i have a problem and i want to fix it who’s the best person to do that even if i have never met this person before where i never heard of this company before so getting more uh being pragmatic like a pragmatist about how do i solve problems in a very practical way this is a very much needed while also maintaining the personal connections with the people that you work with yes does operating in a hand to mouse versus the capital finance style make a real difference for the owners of the smes exactly you know if we think about smes in different sectors let’s take the tourism sector as one of these examples if i’m operating a tourism facility there’s most likely lots of things to do in terms of maintenance operations in the facility that i manage there could be some lots of marketing work that i can do in terms of highlighting like like the the different programs that i can offer my visitors etc and that all requires investments so i need i need a a bunch of money set aside for these kind of activities and if i’m operating hand to mouth which means that i wait to make money out of the clients who come to me to be able to spend and to live off of that and my family by then i have a very little chance of being able to make that investment into this project that’s going to turn the business around so the way businesses succeed is that you make investment you bump in capital for a specific objective or like money for a specific project and this project brings in outcomes as a result of this project so operating hand to mouth is is a big challenge for people to move beyond just doing this job and then this job and this this job and right now there is a lot of opportunities for people to start thinking in terms of finance there are different finance vehicles whether it’s uh it’s uh it’s lending or it’s equity so if someone really is running a business and they see that they want to grow it by 10x so this might be a fabulous opportunity for them to talk to equity investors they go to people and tell them i’m going to sell you 10 of the company today you’re gonna pay a million pounds in five years this this million pounds that you paid might actually be 20 pounds depending on how the company is going to grow as a result of you putting the 1 million pounds right now in my company so this is an equity investment and this is an opportunity for businesses that thinks in terms of big growth so if you’re thinking about 10x this is possibly a good idea for you to go on an equity investment and you’re going to find the investors who are willing and and hopefully able also to make this investment on the other hand if you’re a small business and you have a smaller project and you’re looking at growth it’s not necessarily to that level but then you can actually go for loans and there are like different vehicles that exist including the egyptian banking sector and different other like trade finance organization that that’s like to finance different deals and allow entrepreneurs and businesses to be able to supply like that the products they expect you to supply or do the operation that they want so these vehicles already exist and i think also a downside is that mostly it is not part of the mindset of majority of egyptian businesses to seek external finance so it’s kind of rare for them to think in terms of i’m going to get an equity investor i’m going to sell and get a partner for 10 of the company it seems like a foreign idea and it could be yeah and also in terms of like thinking about the downside of getting a loan from the bank etc and uh and also there could be some like like challenges in terms of going through the administrative process et cetera so these all are reasons that keeps lots of businesses operating hand to mouth which is it’s a it’s it’s hindrance to a lot of growth potential for the economy so if we’re thinking about freeing the economy and moving it to the next level we have to both make this vehicle more ready to receive entrepreneurs and also we invite more vehicles to exist in the market at the same time we have to be teaching the entrepreneurs and working with them closely on getting them ready to identify what kind of capital do we need and how do we prepare ourselves to be able to talk with the investors like or the lenders as an expert in the field of smes or small and medium enterprises what fields in egypt would you encourage young entrepreneurs to start with yeah i think like the answer to that comes down to the entrepreneur themselves so one of the things we think about especially if we’re getting for startup is that people usually succeed in what they are most passionate about because building a company is a tough process and they’re going to be a lot of failures so if we’re talking to young entrepreneurs about what they need to pursue i think that has to come naturally to them out of discovering what they are most talented and what they are most passionate and what the market needs also i’m talking about market needs here in egypt yeah exactly you know like we have a we have a concept that we like to to kind of uh demonstrate to young people who are looking for that which is what we call the hedgehog concept and there is there is a very interesting idea from a business book that that’s really studied american companies and why some some companies grow and why some fails and they came up with the idea of like there are like the if there’s a wolf and he would like to eat either a fox or a hedgehog which do you think he’s going to go for a hedgehog or a fox i mean like they’re going to start with the fox they’re going to start with like like with the fox but the fox is pretty smart so the fox has a lot of talents so the fox is going to get over the tree he’s gonna like he’s gonna give that the wolf a hard time but then if if the wolf tries to attack the hedgehog the hedgehog is not gonna do anything he’s gonna just like export his it’s uh it’s it’s peaks etcetera so this would actually challenge that uh despite the fox is pretty smart it has a lot of talents and a lot of ideas but then the hedgehog you have only one thing but you cannot get over this one thing so an idea that you need to really understand what is your one thing that you should be focusing on and then there are like three circles that you can draw and you can do this right now is it basically what i’m most passionate about so i can write down what i’m most passionate about what i’m competent at what do i do best and where are the economic opportunities if i see something that matches that i’m really passionate about that i’m competent at it and also i can make money out of it so by then this is an area that i need to focus on right mr abdu magdy our business consultant
Tech Entrepreneur, engineer, teacher and researcher.
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