One weird idea i stumbled upon, dinner in the sky   I’ve seen this before but never knew it was a world thing now. Most major cities now have it there, wala could be done here over the gulf road maybe, where you can dine and see live accidents:P  

Another site selling electronics online, i love the idea about new business popping up but not just for the sake of starting a business. You need a competitive advantage of some sort. Anyways my post is about Blink’s 14,000KD or  more street campaign and at the end the ad has no arabic! nor on the site.

its all over Kuwait but no arabic what so ever in the ad, arabic is the major language in Kuwait. I learnt this the hard way, i once started a DVD delivery business and the whole business revolved around english. Major mistake, i only knew later that many wanted to use the site but did not understand past the words register and submit.

If the ad was only in english a huge influx would have visited the site, remember this is the first part only. Making a sale and keeping them is the challenge, and thus has to be based on a model, competitive pricing, lower margins, supplier contracts, bulk purchasing, the back end that customers do not see. This then has to translate to the customers pocket for them to keep on coming. Remember click and buy , what happened to these guys?? bill boards and all too. You see, sick freaks like me dont forget such stuff:p

A number of Qaiss’s recent posts have been around the issue of young micro-companies that are established without any pre-thought going into them with regards to scalability and future diversification… I’d like to kick start my posts here on IO81 with this in mind.

What is scalability in business and why is it important for entrepreneurs?

A business’s ability to be scalable is essentially a financial criteria and it means that as the business grows and expands the cost of each incremental KD in revenue must be going down. Another way to say this would be that when you increase your revenue’s your costs would be less than your current revenue’s costs (see figure 1). An example of a scalable business is software: the only real cost in putting out software is the tremendous R&D costs and programming, testing and debugging costs, otherwise, no matter how many copies you sell the incremental cost of producing an additional copy is negligible. Hence, provided there is demand, the more units you sell of the software the more you increase your profit margins.

Another thing to consider is that scalability is not the same as ‘economies of scale’, which means that a companies variable costs decrease as the company gets bigger, additionally, it’s fixed costs can be spread over a higher number of items sold. While economies of scale definitely help earnings, they don’t necessarily ensure the operating profits go up as revenues go up.

Consider this:

A young man, lets call him Ahmed, is excited about entering the marketing services industry. Ahmed is acutely creative and has a natural flair for churning out creative idea after another. He believes in his skills and thinks that he has the potential to produce better creative solutions to clients that the run-of-the-mill agencies. He decides to work alone and set up his business in his home.

What’s wrong with this scenario?

No matter how many clients Ahmed sign’s up he cannot reduce his overhead. Mainly his time, the cost of servicing the first client would be similar to the cost serving his fifth. Therefore, reducing his business to a lifestyle business that is not investable nor is it grow-able in its current mode of operation. Should he choose to expand and hire more people, he would lose the unique selling point that attracted his clients to him in the first place – himself.

Sadly, many young Kuwaiti’s are becoming excited and venturing into business’s that are identical to Ahmed’s, whether it be creative work, cake making, fashion designing, etc. Without considering the future implications and challenges of growth on their adopted business models.

What business’s have you seen lately that have fallen into this start-up pitfall?

Through my experience i have learnt an important factor; metrics. With running a business you have to manage your numbers. Then again you may thing offcource sales and cost etc etc no these are known facts. Forget these for a second, some metrics can be created by you and on that you build on new parameters to manage better. Example, if i had a delivery business then i should start timing deliveries using a stop watch, then maybe start doing so for morning shifts then rush hour shifts. When getting these numbers i can make better designs because when you now make a decision to change the timing or route of your drivers does it make better delivery times? only when logging (writing down everything) your base numbers you can see when and if your decsions are effective or not.

Remember speed plays a big role here, everbody orders then sez “ebser3a”, papa johns gets the pizza fast and people noticed.

If you where a restaurant owner for example, calculate how long does it take from receiving the order to preparing to delivery, note them down on different timings, make a table then work on how to reduce the time even if in seconds only. Remember these second translate to minutes when combined with a whole days of work. When advertising or starting a new ad, and you get an influx of calls, log them down why? because you can compare when you have put an ad in a magazine and the on  site(my blog mathalan:P). Then compare price and effective reach of the ad.

Give your customer more than one way to complain, dont become a saddam:P or pissed off when they complain. Let them complain by phone and email too, remember people are introverts and extroverts. Some will never complain and other will if they had the discrete mediums to use like email or contact us modules on the net.

If your business runs on inventory you may want to see this site; Inflow.

Kwik Kopy store located in Salmiya, Salem Mubarak Street is being offered for sale. The place has a rent of 2,000KD, dont get scared hold on, and with a down payment of 30,000KD, ok now you can freak out:P

Remember these store with a prime location should be taken by large companies or franchises not someone selling again cupcakes. Look at the store next to it, Eastpack dealership. Major firms can handle such cost because they need to be in your face and in prime locations like Salem Mubarak Street. Every one passing by Salem Mubarak Street knows that Kwik Kopy is there, location plays a big role. Its located exactly opposite Ahli Bank and Bu-Suwaileh Restaurant.

Things you dont know; the machines in these copy centers are expensive, but these stores dont own them. They work an agreement with the store that if 20fils is charged to photo copy a paper, 5 fils goes to the Xerox company and the rest 15 fils goes to the store. Such a policy makes these stores afford the photo copy machines and the Xerox company moves its inventory of photo copy machines. These machines are fitted with counters and from time to time an agent comes from Xerox and take their share from the profits. These store have a multiple channels of profit like: designing, printing business cards and letter heads, parcel service, binding and other stationary sales. So setting up a copy center is not that capital intensive (mo ghali ya3ny:P) .

Here are some entrepreneurship Video’s you can enjoy on Youtube, these are major CEO’s in the UK mostly owners of Pret and Coffe Republic. Enjoy

Below is  the link of Dragons Den, a great show of idea’s and innovation and how to deal with getting harassed:P produced by the BBC.

http://www.bbc.co.uk/dragonsden/

Pinkberry finally opened in Marina mall, to be honest i hate being proud of consuming (you should see my Communist side:P) so much but i really like Pinkberry. When even visiting the US and the UK and i have tried many there, nothing compares to Pinkberry, its this tangy feeling in the yogurt that i like, i even go for the plain one. Anyways it opened in Marina, i hate the Avenues but Marina Mall is quite less congested than Avenues so that’s a plus. No more these long lines atleast:)

It seems there is a war between Red Mango and Pinkberry check out the youtube post below.

Watching Discovery one day, i see an engineer wearing a hard hat that was customized with some NHL team.

Then i started thinking how nice they would be if you customize these hats into, Nadi el Arabi, Qasdsia, Salmiya etc then maybe rainbow gay colors for the salmiya gay pride:P and maybe start branding them into Zain, Viva, Wataniya then you see people coming up with their own designs. Then designs into Kuwaiti flags, Kuwaiti sadu design wai3:P

There is potential in the idea, and these can be imported cheaply to Kuwait. Then i had a Eureka moment, what if these hard hats get designed by some Kuwaiti designers like Mohammed Boland owner of Capital District. That would be a nice twist, i enjoy his T-shirt designs and how he uses old Kuwaiti stuff but turned modern. Will discuss his business in a later post.

When leaving or coming to Kuwait airport by plane, you can get a glimpse of some numbers on the runway itself. They look like this 33L or 15R. These are numbers for pilots to recognize the runway but what is the basis of these numbers. After some research it shows that these numbers are based on science and not brain farts like everything else here:P

These numbers start from 1 to 36, reflecting a 360 degree circle, so when approaching Kuwait airport from the south heading north (usually a Dubai flight) you will encounter the southern part of Kuwait and the desert and will be landing on either runways 33R (right) and 33L (left) which represent the angle 330 degrees but this is not usually the case, it depends on the wind too.  These numbers are based on the magnetic north. So if a plane is approaching Kuwait from Iraq you would be landing on runways 15R or 15L  (150 degrees) its just the opposite of 33R and 33L.  So we don’t have 4 runways we have 2, but 4 ways to land.

This is a clip inside the pilots cabin landing in fog.

I have posted earlier about a Juice company and said will discuss the market potential. So i don’t know if you guys have seen the Fresh Juice Company plastic bottles that get sold in the Coop’s mostly in front of the main entrance or next to the cashier, so i made some research and get this; its a huge market out there!

This small company that has about 4 small trucks to deliver the drinks all over Coops in Kuwait and Sultan center sell about 2500 bottles a day with 10 employees, will get to the numbers in a minute. Their operation is very primitive but efficient and do sell a lot of fruit. They have no large machinery to chop the fruits but more manual labor. With true honesty i thought that it would be dirty and i would blow into oblivion in this post but the what i found out is the opposite. Clean employees and a sanitary work place, all the employees have their heads covered and wearing thick gloves. Fruits are all well packed and cleaned well and then all stored in large fridges (can be seen in the pic).

The company has great potential to grow, from a branding perspective to new products. With such reach the company has, they can educate the customer base they sell to about anti-oxidant drinks and immune booster, and many more examples (the one i would like to see is dates drink). The plastic used and the sticker that introduces the product need change. New markets can be approached like the government school cafeteria instead of these kids drinking soda all day. They claim that the best selling outlets are the ones outside Kuwait city, like Qurain and Subahiya Coops and all Sultan Center outlets.

Selling 2500 bottles a day is fantastic and surprising, they sell their products at about 350 fils. Lets do some rough calculations.

350fils * 2500 = 875KD a day lets say half is their cost at 437.5KD with a net profit a day of 437.5KD and * by 26 business days = 11,375KD for a months work, thats nice.

There is a market out there and huge potential for many business idea’s other than cupcakes and khalageen:p think about how the market is untapped and is filled with juices that are not fresh and have to be delivered all the way to Kuwait and priced much higher (snapple, tropicana).