The first baby steps are always a marvel. They show us how we, with the right family environment and ecosystem, can magically teach one of the most important life skills- how to walk, one-step at a time. Once we can walk, those who care for us are always on high alert just in case we try to run, or even to fly before mastering how to walk.
Similarly, the first step in starting a business can be an economic marvel when it sends positive vibes and cash flow through the veins of all the parts of the community. Just like a human being, the development of the business can be slow when its lifecycle faces an ecosystem challenge.
For example, in the Sultanate of Oman’s business ecosystem, just like other ecosystems around the world, more than 60 per cent do not survive what is called a Death Valley caused by an interruption in one of the four main, intertwined steps/phases of the successful business lifecycle- starting up, powering up, growth and exit.
Starting up step
Business ideas are common, yet business ideas with traction are hard to come by. This is mainly because our consumer market has a lower tolerance for lesser-known products and services and prefers spending on, incubating, and funding, the more known brands.
This creates a vicious cycle for weak small businesses that face a high threshold to spend more on their products and services and on marketing them, hence risking a higher cost of doing business.
This is why there is a great need in our wider community to broaden our willingness to pay (WTP) to include funding ideas until they develop their Proof-of-Concept with consistent cash flow.
Families, mosques, houses of worship, and schools need to encourage young adults to understand how markets work, as the first baby steps to fostering a stronger economy and prosperity.
Powering up step
After starting a business, founders need more cash to ensure they are providing the best customer experience possible. While in Oman, fundraising relies on taking loans from traditional banks alternative financing has succeeded in booming economies around the world. Tools such as crowdfunding and crowdsourcing by financial technology startups, known as fintech, help small business owners access much-needed funding to attract talent, stabilise the business, and keep selling.
Growth
Growing businesses should be common in every healthy market. However, when high-performing businesses with around 30 per cent annual growth are way less than the normal rate of 10 per cent of the economy this signals slow market growth.
This can be fixed through Venture Capital funds, or VCs, that step in with a higher risk appetite to fund businesses with promising annual revenue.
In countries that succeeded in maintaining a pioneering digital economy such as Estonia, they relied on incentivizing high-growth startups as the drivers to attract various types of national and international VCs to fund small businesses and startups to break through the growth glass ceiling.
Exit
We are better at thinking about entering into the world of small businesses and startups than in planning out exit. Planning a business helps us see the big picture behind starting a business and the purpose of bringing your good ideas to life. Serial entrepreneurs-friendly engagements and incentives encourage knowledge and value sharing between entrepreneurs and those they serve. Also, entrepreneurs-friendly pension schemes can help our economic diversity plans and offer families of entrepreneurs more much-needed financial stability.
Every SME and start-up ecosystem faces a Death Valley where struggling businesses freeze and eventually die, this can be only remedied by broadening our Willingness To Pay.
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