The Gulf Business: How to cope with the challenges of the off-season?

The ongoing pandemic has affected the finances of many companies in the UAE, especially seasonal ones (tourism, events, entertainment). Nonetheless, with the end of the COVID era in sight, this recession seems to be coming to an end too. Each tome more foreign investors are looking forward to establishing a Gulf business.

In this article, you will discover the various challenges faced by Gulf Business due to both off-season and sanitary restrictions. In this way, you will be able to create effective plans and strategies.

1. What is the GCC and what is Gulf business?
2. What is off-season and how does it affect Gulf business?
3. Which ones are the possible challenges Gulf business faces during the off-season?
4. What are possible solutions to the work challenges faced during the off-season?
5. How can you establish a Gulf business in easy steps?
6. Ensure the growth of your Gulf business with business advisory
7. How can we help you set up a Gulf business?

1. What is the GCC and what is a Gulf Business?

The United Arab Emirates is one of the most prosperous countries within the Persian Gulf. Nonetheless, much of UAE’s financial success is due to its membership in the GCC.

The Gulf Cooperation Council (GCC) is a group of Persian Gulf countries focused on improving their culture, politics, economics, and economy in a unified way. That is to say, it is a conglomerate of nations seeking to achieve common goals based on their cultural and political similarities.

Some of its members include Saudi Arabia, Kuwait, Qatar, Oman, Bahrain, and, finally, the United Arab Emirates. Thanks to their flexible economic policies, country members have become investment hubs for local and foreign business owners, especially the UAE. Offering a 5% income tax rate, the UAE attracts a large number of investors every year.

Therefore, thanks to its low VAT rate and company formation packages, the UAE is thriving. Consequently, multiple investors come to the UAE to create companies of different nature, also known as Gulf businesses. To clarify, a Gulf business is an enterprise established within a GCC country, abides by the economic guidelines of the GCC.

2. What is off-season and how does it affect Gulf Business?

Within the UAE, there are businesses with a wide range of activities. From textile business industries to event management agencies, you can find any type of company in the country. However, there is one type of company that is affected by the seasons, national holidays, and even the product they offer. That is seasonal Gulf Business.

In other words, a seasonal Gulf business offer products and services deeply related to a seasonal period of the year. Their production and sales peaks depend on the season, climate, and holidays. For instance, hotels, tourist facilities, or agricultural companies are seasonal Gulf Businesses.

In this sense, the off-season in the UAE is the lowest season, affecting both seasonal and non-seasonal businesses. These are periods when the productive capacity decreases considerably, affecting the processes and the business processes.

In the UAE, this period is mainly in summer. This is due to the celebration of Ramadan and the rise in temperatures in the Emirati territory often causing a brief recession in seasonal Gulf business which, if not properly prepared, could suffer serious consequences further on.

3. Which ones are the top 6 possible challenges Gulf business faces during the off-season?

Gulf Businesses face multiple challenges throughout the year, especially seasonal ones. The list of challenges is extensive but to sum it up, there are 6 main commonalities between seasonal and non-seasonal that can help you develop a functional business analysis later on. These obstacles are related with:

3.1. Relationships

Business relationships with suppliers and retailers are fundamental to company growth. Nonetheless, during the off-season, relationships between Gulf business and its suppliers can be affected due to low orders and decreased production.

3.2. Costumers

When starting a Gulf business, it is often difficult to attract new customers. In this case, the biggest challenge is not to attract new customers but to create loyalty among the current customer base to avoid losses during the off-season.

3.3. Planning

The planning stage is important in any Gulf Business functioning. It is not only essential to plan the actions to be taken in the off-season, but also to create strategies that fit the needs, goals, and performance of the company.

In the same way, it is necessary to find a strategy that allows taking full advantage of the peak season.

3.4. Alternative income

A Gulf Business that focuses on a single financial activity may face several problems during the off-season. However, diversifying activities without the right advice could be more problematic.

3.5. Operations

One of the latest challenges is production and manufacturing. Among them, declining production capacity, a decrease in investment capital, and a drop in personnel productivity are some of the operational challenges facing Gulf Businesses.

3.6. Consultancy and advisory

Finally, one of the strongest challenges is to find the right consulting and advisory services. Starting a business in the UAE without the right advice is complicated. There is a wide variety of new rules, laws, and UAE Company structures guidelines that foreign business owners must understand first. So, the right counseling is a must.

3.7 What are the other common challenges Gulf Business faces during the off-season?

In addition to the off-season, Gulf businesses, new and old, face other types of challenges throughout the work year in the UAE. Among them are:

• Operating in a jurisdiction that fits the company’s needs
• Finding a comfortable and cost-effective business center
• Language barrier
• Growing familiar with Islamic culture and traditions
• Measuring production time and scope
• Understanding tax laws and regulations
• Obtaining a long-term visa, e.g. a Golden Visa and work permits.
• Create long-lasting ties with local and international suppliers

Knowing the different challenges can make the difference between creating a successful Gulf Business and a faltering one.

4. What are possible solutions to the work challenges faced during the off-season?

Although the list of off-season challenges is long, they are not impossible to overcome. On the contrary, there are several solutions that you can apply to solve from the smallest flaw to prevent even bigger mistakes. Points by point, the solutions you can apply in your Gulf business are:

4.1. Create and maintain good relationships with your retailers and suppliers.

Building good relationships with your suppliers and distributors will allow you to weather the off-season better. For example, you can arrange for smaller orders to be placed at the end of the season. Also, have inventory delivered by the end of the peak product season by prior arrangement.

In this way, your Gulf business will have a large stock reserve and your distributors and suppliers can save money on storage, transportation, and warehousing.

4.2. Building brand loyalty

A good customer comes up with successful branding strategies. Using resources such as social media and mass media can help you attract new customers. However, solid branding allows you to build customer loyalty and transform them into repeat customers. In addition, provide them with a unique experience with every purchase.

4.3. Plan operations during each season.

Both low and high seasons are times that must be planned for a Gulf Business to succeed.

In other words, invest in your stocks and increase working hours to generate more capital during the peak season to produce a reserve that will protect the business during the off-season. Rely on your expertise and the objectives of your Gulf business.

4.4. Diversify the company’s revenues

During the off-season, production becomes slow. Therefore, relying on a single product or service can cause challenges in the process. Consequently, it is highly recommended to find different forms of income that are derived from the main product. For example, an event management agency can offer courses on micro-events planning during the off-season.

4.5. Avoid closing during the off-season

Despite the reduction of activities, it is possible to continue working for a while. A great alternative is generating off-season expectations that create interest in the audience. Among the options, you can create marketing campaigns and deals that keep the bar high for your customers and suppliers.

4.6. Find the right business advisory

Performing a business analysis of your business can make the difference between surviving the off-season and generating massive losses. Using a consulting, auditing, and accounting firm can help you create effective action plans. On the other hand, it will help you better understand the UAE financial ecosystem and improve your bottom line, reaching new horizons further on.

5. How can you establish a Gulf business in easy steps?

Now that you know more about the pros and cons of setting up a Gulf Business and working during the off-season, there are a few steps to follow.

To be clear, entering the Emirati economic market is relatively simple thanks to the wide variety of flexible options. Nevertheless, to do so, it is important to follow a series of steps first. However, the steps are simple and quick. This indicates that you will be able to have your gulf business in the UAE in a very short time. In general terms, the common steps you should accomplish are:

• Delimit the nature of your Gulf Business
• Apply for a license according to your activities (Trade, Service, or Industrial).
• Choose a suitable workspace
• Get a residence Visa. Some of the different options are Freelancer, Golden, or Property Visas.

6. Ensure the growth of your Gulf Business with business advisory

Finding the right advice can help your Gulf Business survive before, during, and after the off-season. An advisory firm is a good option to learn more about:

• Business activities consulting
• Corporate compliance matters:
• Investment guidance
• Creating marketing and sales strategies
• Tech consultancy

7. How can we help you set up a Gulf Business in the UAE?

Establishing a Gulf Business is an excellent idea if you know the issues to be faced. The UAE is an investment paradise, no matter the challenges to overcome.  Setting up a successful business in Dubai, Sharjah or any of the Emirates Mainland or Free Zones can be easy thus the UAE welcomes foreign investors with open arms.

At Connect Zone, we are ready to reach out to you during the company formation process. With 20 years of experience in the UAE market, we are prepared to assist you in finding the right bookkeeping team or VAT registration, taxation, and consultancy services.

Likewise, our Local Partner services allow you to get in touch with a reliable local agent who specializes in UAE business setup.  In the same vein, our team is ready to fulfill your company’s needs and obtain a residential visa in a short time, providing you with expert service and support 24/7 at the best price.

Would you like to contact Connect Zone to help you set up a Gulf Business cost-effectively? Give us a call at +971 43 316 688. We will answer any questions you may have about the process and our services. Moreover, you can send an email to us at contact@connectzone.ae. One of our representatives will write you back to answer your questions as soon as possible.

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