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Talk from the top -- how to pass your business audition.

Steve Williams can make or break a business. As chief executive of Gulf Finance, he's judged hundreds of applications for funding from firms across the region. He's sent many a small business on the road to success, and politely had to turn down dozens of other hopefuls.

Doing the latter gives him no pleasure. It's a bit like being a judge on a talent show like American Idol, he explains, adding: "You are kind of rooting for them as an individual even if you know the road that they are going down is just wrong -- it is the wrong product or it is at the wrong timeC* and then the best thing that we can ever do to them is hold up the mirror and say 'I am really sorry, but we don't think this is right and this is why'."

When it comes to deciding which businesses are worthy of his firm's money, Williams is looking for a particular breed of firm. If you're a fresh-off-the-boat entrepreneur trying to bring an idea from a more developed market to the UAE, he is happy to leave you to a private equity firm or wealthy 'angel investor'. If you're a sophisticated and long-established firm you can go to a regular bank.

But if you're one of the hundreds of small firms with an established track record who need help to take them to the next level then you're right up his street. Pass that test, and his firm's experts will sit down with a business and meticulously go through its incomings and outgoings, its invoices and ideas.

"This isn't to catch people out, this is really to make sure we are doing right by the client and not putting them in a position they can't afford to then pay us back," he says.

"If all they can do is talk a good story, then it is not in our interest to lend that individual money because they could very easily be in over their head. That's terrible for them, and it's not really good for us either."

Even if you have a solid business plan your firm can still face serious problems further down the road. Williams has seen it many times. "The number one casualty-causer for businesses in this environment is over-trading. Biting off more than they can chew," he says.

"That comes from the energetic environment that exists in Dubai. When you get into business out here it is a case of 'go, go, go' -- let's get the website, let's get the branding, lets get the premises, let's hire two or three people and off we go." All too often, many firms soon find themselves struggling with a cash flow problem as clients don't pay their bills on time.

"Most of us, if we didn't have a salary coming in, after two months we'd be in a jam, after three months we'd be almost destitute. Now apply that to a business scenario," Williams says. As company managers chase suppliers for payment instead of doing what they should be doing, their firm's performance starts to slide -- the start of a vicious cycle that can be the beginning of the end.

Williams' advice, is that "for any period in the first two to three years you have to have the ability to trade for six months without any money coming in". If that's a reminder of just how tough growing a small business can be, at least UAE firms are now operating in a far better environment than was the case a few years ago.

"I think there is a lot of optimism, but I don't want to badge it as 'the boom is back'," he says. "I would rather say I think there is a period of stability where we can get things going." A self-confessed optimist, he is confident there are plenty more success stories to come for Gulf Finance, which has financed enterprises to the tune of Dhs3 billion in recent years.

But what about those ventures he has politely decided his firm can't help? He says: "If they decide to go on and go for it, we wish them every luck in the world. I am very, very happy to be proved wrong."






A I joined Lloyds bank at a very early age as a cashier, having done about four weeks as a paper boy before that.


A The particular individual who taught me the ability to assess credit. That it is not a checklist of things, it's more subjective -- how does it feel in your gut? This guy taught me that 20 years ago, and he's retired now, but I fly him out here about two or three times a year to teach the same thing to my staff.


A We have board meetings and we go through 20 or 30 deals one after the other, and it is incredibly mentally challenging. But at the end of it, if you come out and approve six or seven per cent of those deals and you know that some of those businesses are going to be successful, then it feels satisfying.


A My wife Claire and I are gym junkies so I go to the gym a lot. As you would expect from somebody who is finance I play a bit of golf, but I don't play very well. I have a fabulous family who are the best kind of relaxation of all.


A I think Gulf Finance can be the biggest regional finance company. There isn't one at the moment. There are companies that operate in the UAE, in Kuwait -- but no-one is across the region. We are expanding into Saudi Arabia later this year and we will be the first regional finance company. We're called Gulf Finance, we've got the perfect brand -- it's what we do and it's where we do it.


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Publication:7 Days (Dubai, United Arab Emirates)
Date:Apr 4, 2012
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