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How important is a business exit plan?

How important is a business exit plan?

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What’s the average life of a business?

I don’t know for certain, and I doubt anyone else in Bahrain or the Middle East knows either. Statistics of this sort are just not prioritised, and if they are, then they are not published. US statistics suggest that, on average, a Fortune 500 company lasts around 40 to 50 years. The vast majority of small businesses in the UK are around 5 years old, with less than 15% older than 20 years.

My guess is that small businesses here actually last a lot longer. But that’s not due to their success.

Businesses last longer in this region not because they are better run, or because of the region’s tax-free environment. I suspect that they are allowed to grow older simply because of the archaic bankruptcy laws. The bankruptcy laws here compel business owners to maintain their businesses on life support and even tolerate incurring losses, rather than declare bankruptcy.

You would be right to question why bankruptcy is detrimental to business and entrepreneurship. One reason is because there are serious repercussions from declaring bankruptcy. Those repercussions range from travel bans imposed on entrepreneurs, to them being barred from starting or operating a business thereafter.

Simply put, bankruptcy laws make this region a hostile environment for entrepreneurship and innovation. I don’t believe that business can thrive under these restrictions. Innovation carries an inherent risk of course, and an environment such as this doesn’t allow innovators to take those necessary risks. That is probably why innovation in this region will continue to just be another buzz word empty of meaning.

You can read the Bahraini Bankruptcy law here.

And here’s an excerpt to show you how detrimental it is to innovation and entrepreneurship:

Article 33

Any adjudicated bankrupt may not elect or become a member of parliament, municipal council, Bahrain Chamber of Commerce and Industry or any professional society. He may not become a manager or a director of any company nor carry on the business of commercial agency or any import and export business, stockbrokerage business involving the sale or purchase of securities or sale by a public auction.

An adjudicated bankrupt may not manage properties on behalf of other. However, the competent court may authorise him to administer the properties of his minor children, if such administration is not detrimental to them.

This archaic law is responsible for the stagnation of business and innovation. A significant proportion of businesses here are on life support. And to all intents and purposes they should be declared dead. Yet, they’re kept alive because their owners cannot afford to declare them bankrupt.

I’m not advocating escaping from one’s responsibilities. I am advocating a better law that allows for mistakes to be learnt from. They must be regarded as experiences that help build the culture of innovation.

The above should give you some context on any published statistics here as they do not take these factors into account. They do not present the real situation and statistics should taken with some grains of salt.

Other challenges do exist that limit business growth, of course. The most critical I believe are the lack of clear planning and lack of vision. A critical part of those is that entrepreneurs here do not define a clear exit plan as part of their business planning. I am guilty of that omission, I confess. I’ve never even thought of an exit plan before not found a need for one. However, I now believe that defining an exit plan is critical to the success of any business. It is the exit point at which the conditions are just right for the launch of a phase of more predictable growth. Essentially, it is the transition point from an entrepreneurial spirit to professional management. It is that time at which professional managers must be brought in to manage and create sustainable growth.

Most entrepreneurs, from my own observation, aren’t detail people. They are explorers who have no fear of venturing into dark and deep shark infested waters. One would find them getting out with hardly a drop of sweat on them. Wet they might be, but sweaty they won’t. What would make them sweat is the wait, and being forced to deal with the fine details.

But with a such a hostile environment to entrepreneurship here, how can a business even contemplate the prospect of being sold? Would an exit plan even be considered as part of business start up? Why are businesses even started in this region?

I believe that the primary consideration for starting a business here is to make money for the owner. A piggy bank, if you like, or a cookie jar to dip the hand in whenever required to maintain a certain lifestyle. In the majority of cases, businesses here aren’t to deliver value through innovation. And that is why businesses remain small.

I am not being judgmental. These are simple facts that small businesses and their entrepreneurs live by here. I contend that there is nothing wrong with that situation. But would the term “entrepreneurship” really apply here?

In this environment, what kind of businesses get sold and why? For how much? And in what conditions? And to what effect? Yes, businesses do get sold. Rarely mind you, but they do happen.

One such recent transaction I know of is the sale of the Block 338 restaurant. The Gulf Hotel purchased that property for a rumoured two million Bahraini dinars. Can you imagine how a study like this would help entrepreneurs? At least it would encourage entrepreneurs to develop a road map with exit plans as part of their start-up process. This would force entrepreneurs to focus on business sustainability. And invite them to establish processes that ensure business success. These kind of stories would do more good than empty marketing platitudes.

I’ve alluded to some factors that would make a business sellable above and I do believe that those are the common denominators that work across many – if not all – small business types; be they service or product based.

Other factors do exist including market need, share and timing. But having a documented processes is arguably the most critical. Those processes allow the business to transcend its owner. They offer predictable automation that allows the business to function regardless of the involvement of its creator. That intellectual property surely must be the most important thing a business possess, regardless of its genre. That applied equally to the likes of video production houses or manufacturing facilities.

Investors; however, make it plain that while IP is valued, it does not factor much in weighing a business for an investment decision. They put a price on actual equipment the business owns than its intangible assets. That makes IP a component of good will, rather than a critical business asset. This thinking renders service-based businesses worthless for an investment destination.

How can a service business such as mine grow then?

I remember attending a seminar by Carl Gould organised by the Entrepreneurs’ Organisation in Bahrain a few years ago. He identified the seven stages of a business.  What stuck in my mind is his assertion that businesses that depend on their owners for success will never grow beyond “Level 2”. He argued that those businesses do not scale, but are bound by the intellectual input of their creator. The only way those businesses can grow would be for those businesses to grow beyond their creator. Which makes sense. And depends on setting in place processes where a diverse knowledge base and shared across the organisation.

That is the issue I have been struggling with for some time now. Like other entrepreneurs in my situation, I had been looking for a “mini-me”. I have not come close to finding one that could fill my shoes, yet. I understand that the alternative is to delegate and accept that I might have to spread my competencies across several employees. The issue here – and I realise that this might be an excuse – is that the market here in Bahrain cannot support and increased head-count. I tried that approach and failed. Many times.

Could scaling be an answer? Should one open offices abroad to grow beyond Bahrain to capture more business? That growth will surely provide the opportunity to utilise more competencies and spread them across the network.

What’s the issue then? Why have I not take those steps to grow? The simple answer is that I never had the required access to capital. The perennial problem of business growth everywhere, of course, but especially to those in Bahrain.

Trust for small business and entrepreneurs here exist only in platitudes and effervescent glitzy entrepreneurship events. There is no real government policies which help ease this situation. The archaic bankruptcy law is just one example of that failure. The absence of reasonable financing is another. Until these situations are remedied, I believe that SMEs in this region will continue to be non-effective. Their economic impact will remain marginal. And they will never provide real value that might benefit humanity.

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Happy what?

Happy what?

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Here comes Ramadhan.

The month where almost no work gets done
When productivity of just about the whole Muslim nation grinds to a halt
And efficiency is not even a concept to be tolerated
Where people willingly stay up all night, and sleep all day
Where gluttony is the rule
And piousness is only the facade people wear
It has become indeed the most un-Islamic month in the calendar, by the habits that people bear and what they made it to be.

No wonder people celebrate when it’s over. So let me press fast-forward, and wish everyone a fantastic Eid! Did you enjoy the month-long break?

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Bahrain, this is probably a good time to change your lens

Bahrain, this is probably a good time to change your lens

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A few weeks ago I attended an “EO University“, an event organised by the Entrepreneurs’ Organisation for its members from all over the world, this time, in the fabulous city of Istanbul. The University is a intense learning experience in which attendees get to listen to world-class speakers for three days and be inspired by their vision. Apart from that, there’s a lot of networking through many opportunities that every single attendee leaves enriched with new world views and many new and lasting friendships.

One of the speakers I particularly liked is Shawn Achor, the Happiness Professor, as I like to call him, who’s opened up new horizons for me and truly inspired me to think of new ways in which to view our situation in Bahrain. In fact, since my return from Istanbul, I have resolved – and generally succeeded – in adopting a more positive attitude.

My view now is basically this: being negative will NEVER resolve a situation. To achieve resolution, one’s lens through which a situation is viewed must change and be replaced with one that has a patina of positivity and belief in a shared and successful future in order to envisage a resolution in the first place. Further, every Bahraini has a duty to seek out an equitable resolution through positive, rather than insular and myopic views. We should actively choose to replace that opaque negativity smeared lens to one that is clear and which allows positivity and a belief that a resolution is possible.

Shawn Achor talks about this, and many other aspects associated with positive thinking and happiness and how those impact positive outcomes and even achieve better efficiencies and guarantees of success. Please spend less than eight minutes listening to Shawn Achor speak about this phenomenon. I welcome your positive comments and actions to resolve Bahrain’s situation and get us to move forward as one society happily living in one cohesive nation.

Peace!

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No politics?

No politics?

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despairI wonder what life would be in this little dot of an island of ours if we had to live without having to worry about politics; in as much as actually living in a modern democracy where human rights are not only protected, but cherished, and where people would feel free to write and voice their opinions without fear of persecution. I’m 50 now, and reflecting back, I can’t remember a time where these conditions existed here. Nor do I remember a time where in my lifetime that this region, for that matter, has enjoyed relative peace either. I find that I’m holding myself back from writing, for standing up for what I believe should be the norm and when I do write, I censor myself. All because I know – through personal experience – the terror of that 3am banging on the door, the hood, the tight wire-wraps around my wrists, the shoves and insults, the incarceration and the shear terror of realising that all that you’ve stood for, all that you’ve fought for, and all that the moderation you espoused all your life are worth nothing to your jailers and their masters. Their agenda is completely different from yours and they have the tools, all the tools, to ensure that theirs is paramount. So the question remains, why bother? I know I can’t be bothered any more. Not exclusively due to the real fear of the real possibility of incarceration once more, no, but much more importantly because I know that I won’t make a difference and that if I do attempt to do so, then the rest of the country will just continue to trudge along and inexorably and actively try to ignore what’s happening right in front of their eyes just to carry on with their miserable and mundane lives. Future generations shouldn’t be subjected to this. Enough! A solution is required if sustainability is a consideration, and it must be, it should be. A solution is staring everyone in the eye; however, it cannot be enacted without real and courageous political will, both of which are in very short supply at the moment. Realistically, that will has been patently absent for decades, so much so that it has become a de facto standard religiously followed by those in power. Struggles will continue by sincere people in this country and unfortunately some will pay for it with their incarceration while others still will ultimately give their very lives all as a sacrifice to exerting more pressure to wrench those basic rights for everyone to enjoy, and through which future generations can thrive. Some have already realised; however, that life is short and this fight ain’t worth fighting; as such they’ve made exit plans to install themselves in other countries where they feel they might be welcome and in order to allow their children a chance at growing normally. I can’t say I blame them. That’s not an answer for the vast majority of the population though. To them, the only option is to push and continue to push until their demands are met. While they’re doing that, they will continue to eek out a living from the jaws of despair. The end-game can’t be that far ahead. The Bahraini struggle will soon commemorate its hundredth year. To put this in context, the Bahraini story is older than the Palestinian issue.

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Waiting, with bated breath

Bahrain pro-democracy demo in the capital Manama

I think every person in Bahrain is awaiting the release of the Bahrain Independent Commission of Inquiry scheduled for Nov 23rd after a delay of a full month from the originally declared date of release. To remind us of what their task is:

The Bahrain Independent Commission of Inquiry was established on 29th June 2011 in the Kingdom of Bahrain pursuant to Royal Order No. 28 by His Majesty, Hamad bin Isa Al Khalifa. The Commission has been tasked with investigating and reporting on the events that took place in Bahrain from February 2011, and the consequences of those events.

The Commission has been asked to determine whether the events of February and March 2011 (and thereafter) involved violations of international human rights law and norms, and to make the recommendations that it deems appropriate. The Commission has been asked to provide a complete narrative of the events and the context for these events; to describe any acts of violence that occurred, as well as the actors involved in such acts; and to investigate instances of alleged police brutality and violence by protestors and demonstrators against others. The Commission has been asked to explore the circumstances and appropriateness of arrests and detentions; to examine allegations of disappearances and torture; to probe allegations of media harassment and other pressure tactics used against participants in demonstrations and public protests; to discuss the alleged unlawful demolition of religious structures; and to describe the alleged involvement of foreign forces and actors. [source]

I hope that the report is truly independent and unbiased, and that its recommendations are enacted with alacrity by his Majesty to get this country out of the proverbial bottle-neck. Doing anything else would be a betrayal of those who have given their lives to this country and its people, the last of whom will be buried in the next hour or so. May Allah rest their souls and may their sacrifice never be forgotten, and let their names guide this country into a better more equitable future.

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Dialogue in tatters?

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Al-Wefaq pulled out of the National Dialogue. This is not a disaster. It’s their right. They didn’t believe in its efficacy and I – and everyone else – must respect their evaluation no matter how much we differ from their conclusions. I predict that the three liberal/leftist societies soon might follow suit. Again, that’s up to them. No one should label them as traitors – an oft and liberally used word in what has become a paranoia in this country.

The question that we should ask ourselves is why they opted to abandon the process and what did they base their conclusion on? Are they valid and how should they be addressed? Let me tell you from first hand observation that these societies are not the only ones who chose not to participate, I have witnessed several personalities leaving the dialogue not to return, others did so temporarily because of a disagreement and others didn’t even bother to attend even though their names are still listed in the roster. So please, my friends, let’s leave the hysteria behind us and be pragmatic about the situation.

So what’s the problem? How and what must we learn from this experience?

The first and foremost universal complaint has been that those involved in the Dialogue are do not directly represent the Bahraini public. Yes, that is very true. We did not win our seats by public vote but have been appointed in those positions. Looking at the roster, I recognise that a good cross section of professionals, businessmen, writers, journalists, politicians of every hue and other worthy people are involved. It is quite apparent that those who did the choosing did so with an eye to include as wide a cross-section of society as they could. However; with this selection, the Dialogue could be referred to as a council of experts rather than one formed to be directly representative of society. For that to be true, elections of those in the Dialogue need to take place. This grouping – to me at least – are an acceptable medium.

The second complaint is the adopted mechanism. We are told that this is a code adopted by international arbitrators in dispute resolutions. The organisers; however, failed to explain the parameters of this mechanism in sufficient detail. All the delegates got was a printed “code” which was never fully explained in the sessions. What the organisers should have done is take the time to gather all the delegates and properly and minutely explain what the process is and how agreement or disagreements would be arrived at and adopted. This should have been done right on the very first day. What we got instead are lackluster and uninspired speeches. It was a 30-minute ceremony while those present were ready and willing to stay the full day to enter into a training session to understand what is required, how the discussions will be managed and how resolutions would be adopted.

The third complaint is that no one knows exactly how and when the resolutions are going to be presented to His Majesty the King and what he will do with those resolutions. Do the resolutions constitute a binding agreement between the people (if they are indeed regarded as represented by the delegates) and the regime? How will the resolutions be prioritised? Indeed, how will they be adopted? Will HM authorise a public referendum, or will he simply assign the resolutions to the various organs of government as he sees fit? What will the timeframe of implementation be? I couldn’t get a straight answer from any official at the Dialogue.

There are other issues – just as critical – that contributed to the current state of the Dialogue. The Dialogue is the direct result of the February 14th movement whose bedrock are demands for increased political rights and freedoms. It was never just about jobs, housing and government services. However, from my own personal observations, the topics being discussed and resolved do not adequately touch upon these main aspirations, in fact, what is happening is a surprising attempt by some delegates to reduce the ceiling even lower by calling for further restrictions on freedoms and rights.

Like others in the various sessions, I have complained to the sessions’ moderators that we should ensure that we raise the ceiling of rights in this country. I reminded them that we have been given an opportunity to challenge current laws, directives and even the constitution itself, but what I have witnessed so far is a concerted effort not only to stay within the confines of the already contentious laws, but enact new, even more restrictive ones.

I would have thought that these critical issues should have been addressed right at the start. Having them remain unanswered, I feel, contributed to both Alwefaq and several other personalities abandoning the Dialogue.

Regardless, I fully believe that being part of a dialogue is much better than being outside of it. Through this dialogue, no matter how ineffectual some have determined it to be, I still believe that at the very least it will serve as a first step to a much needed national reconciliation, and through it, aspirations will be vocalised and noted, and steps could be taken in the right direction.

I fought for the reduction in the amount of restrictive laws in this country and the enactment of mechanisms which ensure that we get ready for the challenges of the future by completely reforming education – making critical thinking, innovation and creativity central to curricula; supporting SMEs by removing restrictive laws and procedures; engendering social responsibility; supporting businesses against foreign competition; allowing local businesses a variance of up to 10% difference in bids against foreign firms as long as part of that bid’s budget goes directly to societal needs; protecting the environment by penalising polluters and ensuring new and old projects adhere to stringent environmental requirements; untethering electronic media, removal of all Internet filters and ensuring that judicial orders be gained should a site blocking be required. I’m satisfied that I managed to get almost all of those points recognised and adopted. However, the demands for the more intrinsic issues of political rights and freedoms remain divergent and contentious between delegates in the Political, Rights and Social streams.

From my understanding after discussions with those who participated in the Political, Rights and Social streams, the direction there seem to run counter to the main aspirations of the people, let alone that some of the resolutions actually run against those adopted in other sessions. Other very important and quite critical resolutions have not been adopted as no consensus was arrived at either; an example of those issues include the formation of political parties (rather than societies), a less restrictive law on the rights of assembly, more freedoms of speech and the press, more equitable distribution of electoral districts, one-man-one-vote principle, holding the cabinet accountable to the elected parliament, restricting legislation to the elected parliament amongst others.

Is there any rays of hope emanating from this dialogue? Yes, I think there are. The results of the Dialogue won’t be as Earth moving as some might have wanted it to be, but having some things adopted for the better is an improvement on the current situation. I believe that this dialogue is a right step in the evolution of this country and its people and is very much worthy of consideration. I would have loved it if real political change is gained through them, but I don’t think this will happen immediately. I can tell you with some measure of confidence; however, that the presidency of the Parliament will now be with the elected Speaker of the House, rather than the appointed chairman of the Shura council. This must be recognised as a good step forward and one that has been demanded by many.

I personally would also like to see the EDB taking a much bigger role in the running of the country in as much as continuing to be the incubator of successful projects, as well as be the main over-sight entity over the government. If that comes to being, I think we can record this Dialogue as a successful one. Not one that answered all the aspirations of the people, but at least one that provided a glimmer of hope taking Bahrain into the future.

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Lost & Disgusted

Lost & Disgusted

I have been thoroughly depressed over the last few weeks. Everywhere around me bad news persists; people dancing over dead bodies and urging for more killings, people whom I thought to be friends started to regard me as a mortal enemy, people throw about choice terms like “traitor” and “unpatriotic” with vitriol and not much thought. What I previously heard as hesitant questions, whispered normally, enquiring whether a person was from “us” or “them” are now loud shouts of “he’s shi’i” and “she’s sunni” with pointed rigid fingers, blood-soaked eyes and wide open saber lined mouths not caring for the future of this country or its people.

Reason, it appears, has disappeared. The benefit of the doubt has no place.

Will a dialogue ameliorate these feelings? Will it put the country back on a reconciliatory track? Will we ever think of an inclusive “us” rather than solidify an already created and maintained cantons of rage?

I don’t know any more.

I’m just a simple Bahraini who’s now lost, and thoroughly disgusted.

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Should the pictures be released?

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I couldn’t have put it better myself. Thank you Jon.

Another thought: people in Bahrain should look in the mirror whenever they utter words such as “no forgiveness”, “retribution”, “traitor”, “them”, “enemy” and the like as Jon’s observation applies too; however in our situation, even though some gold coin might very well be left behind the corpses those words and pointed fingers create, the benefactors will never have a country nor community within which it could be enjoyed. What they will enjoy, is history’s mounting rubbish heap.

hat tip: daringfireball.net

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Martial law, or low-grade civil war?

My mind is in absolute turmoil. Sitting in Vancouver airport awaiting my interminable flights to get back home, I can’t prevent myself from repeatedly asking: What am I going back to? A country on the prcipesce of civil war where one is marked by the sect he or she was born into. No longer people, but containers of hate the likes of which I have never witnessed, fueled blindly and criminally by so called men of the cloth on one side, and by those who think they have the most to lose.

Regardless, I choose to come back to continue to espouse sanity and tolerance. To continue to try to show people that regardless of their beliefs, status or wealth, our destinies as Bahrainis are intertwined and it behoves us to find equitable ways to live together and ameliorate our differences.

I don’t want to point fingers nor am interested in apportioning further blame. I favor the recognition of the root causes of this strife in order to move on, no matter how painful that exercise may be.

What we need now is to restore calm, work at restoring trust and work together to establish an equitable constitution and system of governance. We need to have a truth and reconciliation commission with powers to bring wrong doers to face their victims and apologize for their crimes in order to turn the page over and start afresh. We need wise and courageous leadership from both sides of the divide to publicly start the process and I hope through these difficult compromises, we shall regain or life, security and stability while guiding the ship of our nation to a better and more tolerant future in which social justice and the respect for human rights rule supreme.

The horrific stories I have heard over the last four weeks, the advent of shameless vigilantes and the seeming complete breakdown of safety and security are worrying, but while I do not support the imposition of martial law completely, I recognize that at this time, it might be a good temporary step to regain control of the situation. I fervently hope; however, that this will not morph into another state security law which will extend decades to the detriment of the people of Bahrain and at the expense of humane rights and freedom of expression. We don’t want to live through that again.

I wish every single Bahraini and resident peace and security. And hope that together we shall get out of this situation much stronger that we ever were before.

[note: in view of the current situation, I shall delete any comment deemed to be sectarian, inciting or promoting hate and shall block its author. This is the time to coallesce together as one to rise above this situation and seek resolution, not fan the flames.]

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