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small business startup hurdles to overcome

Dubai is one of the fastest-growing cities in the world. Not a day goes by without news of a new start-up or new development. The occasional slow-down in things no longer fazes regular Dubaaites because they know it's just going to come back stronger.

When locals hear the word “free zone” they automatically think of: 
1. Tax exemptions
2. The long distance from the mainland.

However, a new entrepreneur might miss certain crucial elements that have been glossed over. This is especially true with all the fluff about how awesome the free zones are and how everything you possibly need is readily available and equipped with the latest technology.

What I Learned About Hidden Startup Obstacles

Here’s a list of eight hurdles that I faced while setting up my business in the Dubai Airport Free Zone (DAFZA). Although you might be starting your business in a different part of the world, my experience might help you avoid these sometimes-hidden yet common business obstacles.

1 – Budget control

All new entrepreneurs often feel like start-ups are expensive and they end up spending a lot more than expected. Set a budget in the very beginning and stick to it.

DAFZA has a lot of facilities and choices with various prices for each facility. Be careful to investigate things in person, check out your options, and make a wise decision after going through all your options.

2 – Type of company formation

Select the right type of organization, as each business setup has a different share capital range. Also (and this tip is for Dubai only), if your business is a part of the government, your business will require a local sponsor even if it is within the free zone area.

3 – Confined to the free zone

Once you set up your business, your business activities are confined to the free zone area. If you wish to transport or conduct business outside of that area, you will need to fill out forms and pay the tax requirements of that particular product just like any organization outside of the free zone or modify your business license or check the requirements with the laws of the UAE.

Always understand the limitations and scope of your business entity before you begin.

4 – Creating contacts and getting known—the marketing plan

One thing that gave me difficulty is in this particular area was getting known and building my list of contacts. Dubai is a great place to make contacts. You could bump into anyone anytime, except not in the free zone. It is hard to meet people other than your employees as most of the companies are quite at a distance and most clients are outside the free zone area.

All these factors inhibit your potential client meeting or free word of mouth publicity. A solid marketing plan that works for your business, wherever you are, is essential.

5 – Location and its effect on hiring talent

A nightmare in any individual's mind when they mention DAFZA is the location. Don't get me wrong; it is a highly sophisticated and beautiful place. However, the distance from mainland Dubai and to DAFZA is extremely long. Potential employees might say no to the opportunity because of the distance and the inconvenience in traveling. The entry and exit from DAFZA requires added passes and papers, which would add on to the inconvenience of getting in and out of the place.

If you business requires employees, consider all things that might affect your ability to recruit and keep good staff.

6 – Business license renewal and type

This is an area many small business take for granted and then later on regret.

First of all, do you plan to expand your business in terms of service? If you do, be careful while selecting the type of business license. Do not limit your business activity by selecting an inappropriate license. Widen the scope of your business activity and select a business license that won’t inhibit your future growth. This means that your business can expand when needed, without violating the terms of your business license.

7 – Verify published information

Do not make your business decisions simply because you read it off the internet or because of some hearsay. Go to the location and check out the facilities, the people, and the office spaces before you make decisions.

8 – Ask for help, if you need it

Hire a registration agent or ask the DAFZA help center to guide you through the registration processes or legal advice. They can even help with the office space selection and its details. There is always somebody to help you and guide you through your journey.

Wherever you are in the world, there is local help available to guide you in your startup journey.

Final thoughts on your startup journey

The above list of hurdles isn’t meant to crush or dampen your entrepreneurial spirit, but to remind you to be careful and take calculated risks.

It’s more of a checklist of what to do and what to keep in mind before you make each decision concerning your business setup. Be it hiring talent, finding an office space or simply making your business plan, these points will help you weigh your decisions and help in making more knowledgeable commitments. Besides, whatever doesn’t kill you makes you stronger, right?

Our guest author Kazim Raza is the brand performance specialist at DAFZA - Company Formation.

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