They demanded the reduction of fees and prices of industrial land and the strict application of the Government Procurement Law

Citizen entrepreneurs identify 12 challenges that have led to the failure of their projects

Entrepreneurs considered the industry to be a promising field with many opportunities.

archival

Citizen entrepreneurs whose projects stumbled said that there were many challenges they faced, especially at the beginning of the project and the establishment stage.

They identified to "Emirates Today" 12 challenges and obstacles that caused the failure of their projects, including the long period of obtaining licenses and the difficulty of obtaining suitable land in industrial areas, as well as the refusal of banks to approve the financing of innovative projects as bearing high risks.

They acknowledged that there are entrepreneurs who are responsible for the failure of some projects, given the selection of repetitive traditional ideas, and the lack of time for management, demanding to reduce fees and prices of industrial lands, in addition to strictly applying the government procurement law, and subsidizing the rents of small projects during the first year or two.

licenses

In detail, the Emirati entrepreneur, Mohammed Nasser, said that he had recently decided to establish a small project in one of the emirates of the country, specializing in the industry, which he considered a promising field with many opportunities, but he indicated that the project failed in its beginning and could not continue.

He explained that the most important obstacles he faced was the long period of obtaining the required licenses for the project, as well as the difficulty of obtaining suitable land in the industrial areas as a result of the high price of land, and the inadequacy of some industrial lands for not providing them with utilities and being far from the main services.

Nasser called for facilitating obtaining the necessary licenses from government agencies through cooperation between the relevant ministries and local authorities, in addition to reducing the prices of industrial lands and supplying them with the necessary facilities.

Finance

For his part, citizen entrepreneur Khamis Mubarak said that there are many obstacles that led to the failure of small projects, although some of them carry new and innovative ideas.

He added that he faced several challenges when setting up his own project, which led to its failure, including the failure of many commercial banks to finance the project as an innovative project, claiming that it carries a lot of risks in its financing, considering that banks are supposed to encourage innovative ideas, given that repetitive ideas carry It has the potential to fail because there are so many of them.

Mubarak stated that the banks demanded high interest rates exceeding 16%, and also demanded impossible and impossible guarantees, as he said, as if the project owner possessed these guarantees, he would not need bank financing, calling for facilities from banks in financing small projects, especially for Emirati entrepreneurs, Reducing the interest rate and required bank guarantees, with flexible repayment periods, especially in the first phase of the project.

marketing

In turn, entrepreneur Salem Khalaf said that his project stumbled after he faced marketing problems, which were exacerbated by the repercussions of the “Corona” pandemic, in addition to the intense competition from products entering the market from around the world, pointing out that the high quality of products entering the market. In the UAE, due to the application of strict quality standards, it is difficult to compete for small enterprises.

He stated that some government agencies have not yet implemented the government procurement law, which stipulates the priority of awarding contracts to small projects, which severely affects those projects, especially in light of the openness of the market.

Khalaf called for the strict application of the Government Procurement Law and a study of the reasons for the reluctance of some parties to implement it, with a deadline after which measures will be taken against the abstaining parties.

repetition

In the same context, the Emirati entrepreneur, Rashid Obaid, said that the failure of some small projects is borne by entrepreneurs themselves, given the selection of some repetitive traditional ideas, noting that considering the success of a project guarantees the success of other similar projects, it has been proven wrong in recent years.

He added that he lived the same experience when he established a project in the field of restaurants, given that its success is largely guaranteed, pointing out that the project stumbled and faced great difficulties in repaying its debts that lasted for several years.

Obaid stated that he made another mistake when he assigned the management of the project to one of his friends, and he was not aware of the administrative, technical and legal details related to it, until he was surprised that he stumbled and could not intervene in time to stop the losses.

Entrepreneurs were asked to choose new, non-repetitive ideas, while dedicating themselves to managing the project and being familiar with all the minute details of it.

Rentals

As for the Emirati entrepreneur, Nada Al Ameri, she considered the rise in commercial rents and labor fees as one of the most important obstacles and challenges facing small projects and leading to their failure, pointing out that she is considering starting a new project after the decline in commercial rents in some emirates of the country.

She noted the efforts made by the government to reduce government fees, especially in Dubai, which she described as removing some obstacles to small projects.

Al-Amiri called for supporting commercial rents for small local projects during the first year or two at most, while reducing labor recruitment fees, and continuing efforts to reduce government fees.

• Banks refuse to approve the financing of innovative projects as they bear high risks.

• Entrepreneurs admitted their responsibility for the failure of some projects, due to the selection of duplicate ideas.

The 12 Challenges

■ The length of time for obtaining licenses.

■ Difficulty obtaining suitable land in industrial areas.

■ Refusal of banks to approve the financing of innovative projects.

■ High interest rates for banks and incapacitating guarantees.

■ Intense competition.

■ Lack of commitment by some authorities to apply the Government Procurement Law.

■ Marketing difficulties.

■ Choose repetitive traditional ideas.

■ Part-time project management.

■ Lack of familiarity with the various administrative, technical and legal details.

■ Commercial rents rise.

■ High labor recruitment fees.

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