ACT LOCAL, THINK GLOBAL
How entrepreneurs in Saudi Arabia are growing
their enterprises internationally
by MOHANNAD ABUDAYYAH,
“Why not?” That was my response to the ongoing debate inside my brain one morning when my Saudi Arabia-based training center received a call from an international number requesting for our services. “We’ve heard about the unique programs you offer in the media,” the caller said, at that point in time when, honestly, nothing was on my team’s radar other than a couple of cities in the Kingdom. A few years later, my center was conducting several training programs and shipping thousands of materials to five new countries. This simple change in approach turned our small center from one that struggles in a saturated local market into a global one that signs contracts with a federation comprising of around 40 chambers of commerce across countries in the Arabian Gulf.
Our forefathers used to say, “One bird in hand is better than ten birds on the tree.” Nevertheless, Saudi Arabia Crown Prince HRH Prince Mohammed bin Salman has smashed this rule to realize his vision for the new Saudi Arabia. Today, the largest oil exporter on the earth is putting in extra effort to increase its percentage of non-oil exports. And, this unfamiliar shift in the economy would be impossible without involving all stakeholders, including passionate entrepreneurs like you and me.
To walk the walk, the Saudi government has assigned several authorities to prepare a long-winding list of initiatives and special services for Saudi entrepreneurs who think out of the local box. Their list starts with providing accurate data and studies regarding targeted countries upon request, and it doesn’t end with promoting Saudi products in foreign markets and international exhibitions either. In addition to helping such entrepreneurs get the required approvals from Saudi bodies, to export their products quickly and easily, entrepreneurs can get valuable consultancy concerning ways to procure approvals from those targeted countries. Moreover, the Saudi government has motivated some private and non-profit accelerators to offer services that could, either directly or indirectly, support Saudi entrepreneurs in expanding internationally. Currently, they provide bundles of services that enable Saudi businesses to partner with foreign investors, and sell franchises abroad.
Nowadays, a number of my Saudi entrepreneurial friends are searching the entire planet for any potential growth opportunities. Take Manar Alomayri for example. She has realized that many of the half billion Arabic speakers around the globe were starving for Arabic audiobooks. Thus, she launched a dedicated online platform called Dhad for audio publishing. Currently, countless members of Dhad’s intercontinental community visit the platform to buy its latest audiobooks via their smartphones.
Meanwhile, Ahmad Alzaini is in consultation with his partner Mosab Alothmani to determine the city wherein they should establish their European branch, after opening branches successfully in Asia as well as Africa. They created an electronic system named Foodics, from scratch, to manage restaurants, cafes, and food trucks through iPads and cloud technologies. Through their international team of 150 employees, they have implemented this management solution in around 25,000 points of sale across 17 countries, and they still have more crazy numbers to reach in their passionate minds.
Heading east, we will see Abdullah Abu Dabeel celebrating the opening of the first branch in Indonesia for his East Asia franchisee. Few years ago, he created a new ice cream concept, giving it the brand name, Superano. After putting smiles on thousands of faces and running tens of profitable branches, he felt the urge to up the ante. Now, he is spinning the wheel and selling Superano franchises everywhere around the globe.
Moving west, we have Abdullah Bahabri negotiating with a Brazilian perfume company that owns thousands of branches in Latin America to be a distributor of his unique product. He invented a smart platform and personal machine for mixing and producing perfumes electronically, calling this system Nota Nota. After discovering the niche segment of Nota Nota customers, and creating a regional community of perfume makers, he started manufacturing his devices and exporting them to official distributors worldwide.
THE SAUDI GOVERNMENT HAS MOTIVATED SOME PRIVATE AND NON-PROFIT ACCELERATORS TO OFFER SERVICES THAT COULD SUPPORT SAUDI ENTREPRENEURS IN EXPANDING INTERNATIONALLY.
Considering flying with your idea beyond the borders of Saudi Arabia? Then, lend me your ears, and note the following five secrets that my growth-minded friends want to tell you which will ensure that you have a soft landing out there:
1/ Plan ahead Take some time to plan ahead for expanding internationally. If there is a small chance that your products and services might appeal to customers in another country, you and your team must keep this point in mind as early as possible. It won’t be a waste of your time if you draft initial exporting, franchising, and global expanding plans in advance. On the contrary, this will help you build a flexible organizational structure, design adaptable brands, products, and services, as well as acquire appropriate official documents and intellectual property rights at an early stage. And, when the right time comes,
2/ Choose your destinations wisely Having a wide customer base, efficient supply chain, and effective regulations for your business in Saudi Arabia doesn’t necessarily mean that you’ll find the same in the targeted countries. First, compile a comprehensive list of the countries whose markets you think would be interested in your products and services, and gather information about them from reliable sources. Afterward, arrange that list in order of preference, placing the most promising markets at the top. Certain Saudi entrepreneurs favor countries that invited their investment or those they have already accumulated customers in. On the other hand, some prefer to start their global expansion journey with an easy catch, by targeting a neighboring country that has adequate profitability, reserving overseas market with greater promises for later expansions. If you feel that you can’t fully understand the targeted countries without visiting them and meeting potential partners, suppliers, customers, and competitors face-to-face, then feel free to do so.
3/ Take a good hard look in the mirror Keep your daydreams aside, and answer these questions honestly before entering the international arena:
- What is the current status of your products and services? Are they complete, competitive, and compatible with the compliance standards of the country you’re targeting?
- Are you sure that your
enterprise has management and financial systems that are clear, autonomous, and flexible enough to guarantee efficient and effective crossborder operations?
- Do you have enough additional cash to overcome any unplanned bumps in the road abroad? Is it enough to survive out there for a few years without profits?
Obviously, a “no” for any of these questions means that you have to think again before going ahead with your plan.
You can’t battle with foreign competitors on their own ground with products that are under development. Moreover, if your business takes a vacation every time you do, then postpone this expansion to the coming year. And, for entrepreneurs who are unable to secure a sufficient amount of capital for this risky step, my entrepreneurial friends recommend that they should invest whatever they currently have in their domestic market. At the end, it’s better to serve one country effectively, instead of serving multiple countries poorly.
4/ Watch your steps Though you have done your homework investigating and researching the new territory, enter with your products and services using the least risky steps. For instance, start by serving your foreign customers via the internet, and ship products to their houses through express mail. Afterward, sell your products to interested distributors and your services to promising franchisees. Finally, open a branch or partner with trustworthy companies there. This gradual invasion will protect you from unpredicted shocks or counterattacks from local competitors. Remember to avoid cutting corners with respect to laws and regulations, considering that it’s better to spend some money on a local lawyer, than to spend much more in rescuing your business from serious legal troubles.
5/ Utilize all the help you can get I know you have probably undertaken most of the tasks in your entrepreneurial business on your own till now. However, for a huge step such as global expansion, you should learn the way to seek valuable advice and help. It’s so sad to see Saudi entrepreneurs struggle and suffer, while national entities offer numerous unimaginable services upon request, as mentioned previously. Thus, do it the smart way and make use of any available support. Further, be even smarter by utilizing any incentives offered by many foreign governments for international businesses such as yours.
Finally, there is no doubt that one bird in hand is better than ten birds on the tree. However, if you have enough evidence that you’re able to hold firmly that one bird in hand, and chase one or more of the ten birds on the tree, then: why not?
Mohannad Abudayyah is a Saudi author, trainer, and consultant in business innovation and social entrepreneurship.
He is the former CEO of Isterlab Center for Training Innovators.