The success of low-budget startups such as Shopify and\nShutterStock proves that you don\u2019t need a fortune to create a successful\nbusiness.<\/p>\n\n\n\n
But\nit is<\/em> crucial\nto use precise planning to ensure that your UAE startup can be launched on\nbudget, and isn\u2019t undone by prohibitive levels of investment.<\/p>\n\n\n\n Here\u2019s the solution \u2013 a quick guide to the real costs involved\nin launching your startup successfully in the UAE.<\/p>\n\n\n\n Cost #1: Free Zone And Mainland Options<\/strong><\/p>\n\n\n\n Setting up your trade licence is the key financial outlay that\nneeds to be calculated for UAE startups.<\/p>\n\n\n\n In addition to a trade licence being a legal necessity, choosing\nthe right type of setup is vital when it comes to both your expenditure and trading\nflexibility. Without being legally registered, you can\u2019t trade, open bank\naccounts, advertise, or recruit staff.<\/p>\n\n\n\n So this means making the choice between free zone or mainland\nsetup.<\/p>\n\n\n\n The fastest way to do this and define your exact needs and costs\nis to work with a company formation specialist. Experts are able to walk you\nthrough your free zone and mainland options enabling you to make the best\ndecision. Although you can analyse your options alone, you\u2019re likely to waste\ntime and resources, as well as potentially making some costly mistakes.<\/p>\n\n\n\n In terms of cost: most new companies find that free zone setups\nare the best choice when starting.There are one-time payments such as free zone\nregistration and company name reservation.Those are then added to yearly fees\nincluding office rent, free zone licencing, visas, agent\u2019s fees, bank fees etc.\nSo a startup may typically incur total fees of between USD 5,000 \u2013 30,000\nin year one depending on the structure you choose.<\/p>\n\n\n\n Cost #2:\nWebsite and other one-off costs<\/strong><\/p>\n\n\n\n Once your business setup costs have been projected, the next\nstep is to add one-off startup essentials. Most notably, this is likely to mean\nhaving a website designed and populated with products and content. According to\nthe eCommerce Cost Guide this is estimated to be something in the region of USD\n2,500 \u2013 10,000 for an average startup\u2019s website.<\/p>\n\n\n\n Other launch costs may include apps, branding and press\nreleases. Creating an inventory and researching the costs will help you project\nthe capital needed.<\/p>\n\n\n\n Creating an\ninventory and researching the costs will help you project the capital needed.<\/em><\/p>\n\n\n\n Cost\n#3: Recruitment and wages<\/strong><\/p>\n\n\n\n Other key costs for UAE startups are recruitment, visas,\ninsurance, and paying your team.<\/p>\n\n\n\n Realistically, you\u2019ll need to pay close to market rate for\ntalent, so it\u2019s important to define exactly how many workers you need and the\ncost of recruiting and paying them for the first 6-12 months. Some startups\nreduce the cost of HR by offering equity to employees, but this needs careful\nconsideration.<\/p>\n\n\n\n A company formation expert can help you understand employee visa\nand insurance costs.<\/p>\n\n\n\n Also, remember to factor in your own salary. Regardless of\nwhether you\u2019re a solopreneur, in a partnership, or working with investors, it\u2019s\nimportant to define a salary that is fair and serves both you and the business.\nAn American Express survey found that the average small business owner in the\nUS pays themselves a yearly salary of USD 68,000.<\/p>\n\n\n\n Cost #4:\nMarketing and advertising<\/strong><\/p>\n\n\n\n Data suggests that spending approximately one percent of revenue\non marketing\/advertising is an effective ballpark figure for businesses.<\/p>\n\n\n\n However, for startups and SMEs, research by Sageworks, an expert\nin enterprise risk, suggests that your ideal marketing spend is likely to fall\nbetween two and four percent of revenue.<\/p>\n\n\n\n With your\nstartup you may need to base initial marketing costs on your predicted<\/em> revenue<\/em>.<\/p>\n\n\n\n Cost #5:\nCustomer acquisition<\/strong><\/p>\n\n\n\n Whether you\u2019re a B2B or B2C company, you\u2019re likely to face the\nstartup issue of cost of customer acquisition (COCA).<\/p>\n\n\n\n You can reduce COCA by using several strategies, such as\nfocusing on word of mouth, being laser focused on core customers, and using\nautomation (such as Amazon reviews).<\/p>\n\n\n\n These techniques are highlighted by Bill Aulet in Disciplined\nEntrepreneurship<\/em>:<\/p>\n\n\n\n \u201cThe\nbiggest driver of reducing COCA is positive word of mouth about a company and\nits product. This tends to dramatically decrease the sales cycle, decrease the\ncustomer\u2019s desire to push for discounts, and bring in well-qualified customers\nwho are already good fits.\u201d<\/p>\n\n\n\n Aulet\nrecommends avoiding direct sales if viable, since it\u2019s usually the most\nexpensive tool.<\/p>\n\n\n\n Cost #6: The Future<\/strong><\/p>\n\n\n\n It\u2019s\nimportant to create a 6-12 month investment plan. In fact, it\u2019s liberating to\nstate the amount of money you are willing to initially invest (such as US\n50,000) and the amount in total you are willing to add after 6-12 months (such\nas another USD 25,000 \u2013 50,000).<\/p>\n\n\n\n Realistically,\nyou should plan for financial security for at least the first year as an\nentrepreneur, without reliance on your revenue. By knowing your personal risk\nyou can put all your energy into your business.<\/p>\n\n\n\n Realistically,\nyou should plan for financial security for at least the first year as an\nentrepreneur, without reliance on your revenue.<\/em><\/p>\n\n\n\n Adapting Your Business To Fit Your Capital<\/strong><\/p>\n\n\n\n Once\nyou know your core and unavoidable expenses, you can diligently try to\neconomise if your budget is tight and finding extra investment is not viable.\nIt\u2019s vital not to cut costs to the extent that it negatively affects business\nrevenue and growth.<\/p>\n\n\n\n However,\ncreative thinking and resourcefulness can help you find solutions to challenges\nsuch as marketing, packaging, and human resources.<\/p>\n\n\n\n The key\nto knowing how much your UAE startup will cost is to choose which business\nsetup type suits your business best. You can estimate the costs yourself, or\nclearly define them via a company formation specialist \u2013 the latter enabling\nyou to plan a much more detailed future for your company.<\/p>\n","protected":false},"excerpt":{"rendered":" The success of low-budget startups such as Shopify and ShutterStock proves that you don\u2019t need a fortune to create a successful business. But it is crucial to use precise planning to ensure that your UAE startup can be launched on budget, and isn\u2019t undone by prohibitive levels of investment. Here\u2019s the solution \u2013 a quick guide to the real costs involved in launching your startup successfully in the UAE. Cost #1: Free Zone And Mainland Options Setting up your trade licence is the key financial outlay that needs to be calculated for UAE startups. In addition to a trade licence being a […]<\/p>\n