Power of Art | Is it your idea or your industry?
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Is it your idea or your industry?

  |   Funding, innovation, Startups, Technology   |   No comment

We often come across entrepreneurs who have a business idea they wish to execute whether it’s something they had read about or see an existing business and think it’s something they would like to run.  However when it comes to execution and even fundraising from various local and regional angel investors, venture capitalists or existing business startup funds they are often rejected.  At times it’s related to lack of team knowledge, lack of proper financial planning and modeling or even market entry; but it can sometimes go beyond your idea or your plans, sometimes it’s just the industry.

 

Despite having a proven business model, the team and the technology, it can be difficult to get funded, so we have made a list of various industries we have seen our past clients fail to receive funding due to the following industry reasons.

 

In the part we have worked with clients who have successfully received funding from various local funds such as Khalifa Fund, as well as notable angel investors and VCs; however this is not about them, this is about the others who have failed to receive funding for various reasons.

 

We compiled a list of reasons for their rejections before they came to us.  At their heart one can see it is a lack of innovation or original concepts that is often a criteria for business ideas to become funded.  The vision plays a large role.

 

 

INDUSTRY
Traditional Activity Reason for Not Receiving Funding
ADMIN & MANAGEMENT SERVICES
Recruitment services, PRO services and labor office services. Ordinary business & Saturated Market
HEALTH AND WELLNESS
Health Clubs, GYM, Saloons & Spa Ordinary business & Saturated market.
Health services (like hospitals, labs & pharmacies) Dominated by authorities, high investment and Restricted regulations (HAAD, MOH)
CLEANING, MAINTENANCE, TRANSPORT & GENERAL SERVICES
Automotive Repair Ordinary business & Saturated Market
Laundry & Dry Cleaning Services Ordinary business & Saturated Market
Transportation & Cargo Services, Automobile recovery services Ordinary business, high competition and dominated by large players
Cleaning services, general and building maintenance High Competition, Labor Intensive, Ordinary Business and Saturated Market
MARKETING, PUBLISHING & MEDIA SERVICES
TV & Radio channels, media related programs productions Lots of competition & High Investment – most are financially not feasible
Newspaper, magazine and books – printing, publishing or distribution Lots of competition & High Investment – most are financially not feasible
FINANCE, LEASING & INSURANCE
Finance, lease, insurance and related brokerage High Capital Requirements
Loan collection services, auction services High Risk
AGRICULTURE, FOOD & BEVERAGE
Open field agriculture and traditional green house High Capital Requirements for Scale
Regular restaurant with shisha and cafeteria High competition and ordinary business
TRAVEL & TOURISM
Travel Agency Ordinary Business & Saturated Market
Cars and motorbike rental and leasing Ordinary Business & Saturated Market
REAL ESTATE, CONSTRUCTION & BUILDING MATERIALS
Real estate, hotels, rental and related services; High capital requirements , government dominated
Construction companies, contractors and special trade contractor Sector has still not recovered from recession.  Supply still exceeding demand.
TRADING & RELATED SERVICES; TAILORING & CLOTH TRADING
Computers and mobile phone trading and maintenance Ordinary Business & Saturated Market
General and wholesale trading, trading in building materials, auto parts Ordinary Business & Saturated Market
Shayla & abhaya & tailoring and cloth trading activities Ordinary Business & Saturated Market
MANUFACTURING & INDUSTRIAL
Mining and mineral Industries, cement and cement products High capital requirements, excess supply
Maintenance workshops, carpentry and shopping bags Ordinary business, saturated market and high competition
Perfume and Cosmetics manufacturing and trading Ordinary business, saturated market and high competition

 

The above table is from various sources and experience we have within the Dubai, Abu Dhabi and UAE market.  Depending on where your market and the time you are launching market conditions can change.

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