To succeed in the Middle East, you must acclimatise and commit to a radically different environment, says Ibrahim Ibrahim.
Working in the Middle East as a design business can be very exciting; some of the world’s most adventurous and innovative developments are emerging out of the desert.
From shopping malls with ski slopes to prestigious mixed- use developments and mammoth land reclamation projects, the potential for designers is enormous – but, then again, so are the chances of losing your shirt.
Be prepared to invest heavily in the region before realising a return. By investment I am not only referring to costs, but also time. Like elsewhere, business is based on relationships and trust. You must be prepared to spend at least a year on ‘networking time’, meeting people, building awareness of your consultancy and identifying potential sponsors.
Essential to working in the Middle East is the appointment of sponsors. Don’t just work with someone who ‘knows people in high places’ and takes a percentage. Take the time to align with professionals who will add value as active sponsors. Ensure that you have specialists in each country or region with an intimate understanding of business in their specific area.
In the past, you could work in the Middle East without establishing local offices, but now it is an absolute necessity. It is essential that you have your people ‘on the ground’. The cost of relocating people and the high rents mean that establishing yourself in the region should be viewed as a serious, long-term commitment. In some places, you can set up offices in Free Zones, but this can impose restrictions on your operations.
An understanding of the business culture is essential. The working week is Saturday to Wednesday. If you insist on only working the European week, essentially you would be limited to 24 hours per week, so, in reality, be prepared to work weekends.
The month of Ramadan falls in the summer, so business is usually slow during this time.
Many clients are family businesses. Although they employ senior management teams, decisions are still often made by the head of the family. This can lead to long lead times and ‘different levels’ of contract negotiation with various strata of management.
If you are specifically involved in retail projects, understanding the habits and shopping behaviour of the various customer segments is essential. There are great differences between the requirements of Arab, European, African, Indian and South East Asian customers. Within each group there are further nuances that are essential to be aware of when you determine design solutions.
The larger projects are usually subject to formal, bureaucratic tender processes. Generally, these have long lead times, high levels of pre-contract costs, elaborate contract terms, the requirement for advance performance bonds, high levels of exposure, with up to 60-day payment terms, with no advance payment. But, if your projects prove to be successful, the opportunities with long-term prospects are great. Be aware of requests to submit proposals, which could then be used to create a scope of work for a tender.
Fee levels that allow you to achieve your required margin are key. In the Middle East, European and US design consultancies often compete against groups from South Africa, Australia and Singapore – countries that generally have a lower cost base.
An essential part of business culture in the region is negotiation. Just assume that all fees will be negotiated and, therefore, prepare your proposal accordingly. Be prepared for numerous tranches of long, laborious negotiation of not only fees, but also deliverables, payment terms, expenses, performance clauses and so on.
The region offers great opportunities to create groundbreaking design. The majority of clients are very worldly and they have high expectations; they look for innovation and benchmark design. They also expect complete commitment from their design partners and, in return, there are opportunities to be involved in some of the most exciting projects in the world. If you are patient and astute you may also make a reasonable return.
Ibrahim Ibrahim is managing director of Portland Design
Setting up shop in the middle east:
• Be prepared to invest heavily before realising a return, in time as well as capital
• Appoint professional, active sponsors who will add value to the business
• Establish a local office and have your people ‘on the ground’
• Offices in Free Zones can impose restrictions on your operations
• The working week is Saturday to Wednesday
• Business is slow during Ramadan, which falls in the summer
• Be prepared for ‘different levels’ of contract negotiation
• Understand the cultural issues and habits of the various customer segments
• Be prepared for long tender processes