RIYADH (Agencies): Running a business can be challenging, lonely and full of obstacles — and those providing “advice” are usually motivated by self-interest. So who can a business owner turn to for some trusted guidance?
Monshaat — the General Authority for Small and Medium Enterprises (SMEs) — provides just that in their SME Support Centers, located in Riyadh, Madinah and Jeddah.
Ahmed Al-Owfi, director, brims with enthusiasm when he welcomes me to the Riyadh center, just off the airport road.
“This is a one-stop-shop to support and empower SMEs and entrepreneurs”, Al-Owfi tells me.
Prior to the 2018 founding of the SME Support Centers, a joint Monshaat/ World Bank assessment was undertaken to identify the needs of Saudi business owners. The US Small Business Association was used as a model and adapted to the Saudi culture.
A business owner or aspiring entrepreneur can book an appointment at one of the centers, or simply walk in the door. The first stage is a meeting with a business service adviser (SBA), the business equivalent of a medical GP, who will “diagnose” the beneficiary to understand what help is needed.
“The SBA guides each beneficiary through a track”, Al-Owfi explains. “We have three tracks: One for startups, one for struggling businesses and one for ideation. But these tracks are not generic. We tailor our services according to the needs of each entrepreneur. And everything we do is for free.”
A struggling business might have a three to six week “stay” in the center, during which solutions are provided by the entire ecosystem of the building — including representatives from various ministries and from corporations.
A young, well-educated and business-savvy team of advisers and mentors is on permanent call. The owner of a fast-food outlet might want to franchise the operation — but lacks the experience and the capital. The center will create an advisory board with expertise in HR, finance, marketing etc., to evaluate the brand, create a business plan and — finally — bring investors and entrepreneurs together in a deal room.
“The first deal in 2018 was worth SR85 million,” Al-Owfi says, “when one of our beneficiaries closed a partnership agreement with SABIC.” The centers have helped other clients to raise finance from entities such as Aramco’s startup fund (up to SR5 million) and VC fund (up to SR90 million).
Successful business ultimately comes down to sales and contracts, and the center provides a “back office” that pre-qualifies suppliers to bid for government and corporate tenders. This helps to minimize risk, localize the supply chain, expand the presence of SMEs and create jobs.
The center is also a training hub offering four to six training sessions a week — along with niche courses such as how to pitch to an investor. Business leaders and senior government officials are invited to share their insights, both in person and online. One such program, the SME Support Council (Majlis Da’am AlMonshaat), brought together ministers, governors and other decision-makers to provide government-related business guidance. These online sessions had an audience of over 5 million in the Kingdom and abroad.
Industry players are invited to use the center as a neutral venue to discuss common issues — for instance retailers having trouble with the application of value-added tax. SME owners can meet in one of the center’s conference rooms and resolve the matter themselves, often through simple exchange of knowledge.
“It’s like a SWAT team, to solve a problem”, says Al-Owfi. “We want this to be the building where everybody talks to each other, so that every sector can thrive.”
The numbers are impressive. In 2018, Singapore’s SME Centers were the benchmark, helping 5,000 companies annually. Monshaat’s SME Support Centers assisted 18,000 SMEs in its first year and that figure is now over 20,000. Over 53 percent of people who arrive at a center with nothing more than an idea end up starting their own business — creating over 11,000 jobs over the past three years. And non-Saudis are just as welcome at the centers as Saudi nationals.
“The end goal of Monshaat is contribution to Saudi Arabia’s GDP through the enhancement of the Kingdom’s SME and entrepreneurship ecosystem”, says Emad Alabbad, GM (corporate communications) at Monshaat, “and that is what all of our programs are aiming for.”