Why this Lebanese expat left his family business to launch a new kind of online portal in the UAE

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Although he is the third generation of a family of entrepreneurs, Moustafa Banbouk, a Lebanese man in his fifties, remembers that his parents never increased his pocket money allowance to control his expenses. “Don’t bite off more than you can chew,” he recalled, his parents advising him when he was a student.

“Being in a business-oriented family, I could enjoy a lavish life. However, my parents would give me some pocket money and tell us to limit our spending within that limit. So even if we wanted to buy something or eat out in an elegant restaurant, we would stop there, because our pocket money did not allow us to enjoy it,” says Banbouk.

This helped him control his desires and learn to stick to his budget, which he then used in his professional and business life to never exceed his financial means. Banbouk is not yet a resident of the United Arab Emirates, so he makes several trips between Beirut and Dubai to launch his new start-up, an online-only portal focused on reducing delivery times for conventional e-commerce retailers.

Lesson #1: If you spend too much, you’ll end up in debt and financially stressed.

Banbouk said sometimes you need to walk a tightrope while striking the perfect balance in business. “I learned the basics of finance early on as I come from a corporate family of property developers. So I inherited strict financial discipline – which helped me survive until the end and out of the various crises of the last three decades.”

I learned the basics of finance at an early age as I come from a business family of real estate developers, and that’s how I inherited strict financial discipline.

– Moustafa Banbouk

“Before starting my own business, I worked in my family business. I learned the trade of designing a project, developing it and selling it – right through to the delivery and post-delivery phase. From Plus, financial discipline kept me on my toes and taught me not to overspend, so we maintained a healthy balance sheet to avoid getting into debt.

What was your experience in starting a business in Dubai?

Banbouk said Dubai-based online portal Veppy.com is his first venture outside his home country, which is in a new area of ​​so-called “q-commerce”, a new area for him. Q-commerce (“quick commerce”) – sometimes used interchangeably with “on-demand delivery” and “online grocery shopping” – is e-commerce in a new, faster form.

With the surge in online shopping, q-commerce is a growing online shopping or e-commerce segment that delivers products to customers in the shortest possible delivery time ranging from 30 minutes to 3 hours, depending on the distance of the deliveries – as opposed to the previous waiting period of 24-48 hours or more.

Despite his limited experience in q-commerce, Banbouk launched the online platform last week, August 27, while leveraging his knowledge and skills in managing several real estate and construction projects.

“I am a civil engineer and a third generation businessman engaged in Beirut, in the real estate and construction sector in Lebanon. I have carried out around 50 projects in the last 30 years of my business career in Lebanon. “

What inspired you to start a new business in a nascent field like q-commerce?

Since the world is going digital and online shopping is growing faster than any other industry, Banbouk decided to launch this online portal after much research. “Our research revealed a gap in the online fast delivery, or on-demand shopping (q-commerce) segment, which is still underdeveloped in the Middle East,” he explained, quoting these reasons why a business in such a field can generate income in UAE.

“Other online shopping platforms may have ignored them, but we won’t. We want to empower MSMEs (Micro, Small and Medium Enterprises) and give them a good business platform to scale and grow. MSMEs are one of the largest employers in the UAE economy.”

Since the world is going digital and online shopping is growing faster than any other industry, Banbouk decided to launch an online portal after much research.

Banbouk said if you call e-commerce, q-commerce or online shopping start-ups, all of them are tech companies. “To deliver the best tech company, you need the right tech brains and partnering with them,” he added.

“My priority was to find the right technology partner to deliver the business. My founding partner and I put our hard-earned capital into this startup business. We have been working for the last eight months to refine the technology and the market – which has been prepared for deployment.”

What were your expenses to start a business in the UAE?

Banbouk said his investment so far has been relatively low. He added that, like any business-to-consumer start-up, most of the funds go into marketing — to make it popular among consumers for engagement — once the marketplace is live.

“We haven’t embarked on the most important avenue of expense – marketing. The start-up is being rolled out. Our marketing budget will kick in later this year once we go into operations and We’ll sort things out. We don’t have a fixed budget in mind, but typically a start-up spends around $1 million (3.67 million dirhams) on marketing, depending on the nature of the business.”

Banbouk is still based in Beirut, Lebanon, so he said their expenses were higher than those of others based in the UAE, including travel costs, short-term accommodation, setting up a business license, consultation, finding the right technology partner and business development.

“Every time I fly, I stay in the UAE, and where I still don’t have a home, I spend more money than others who have made the UAE their first or second home.”

He added that on average, one would spend between $5,000 (18,365 Dh) and $10,000 (36,730 Dh) per trip on airfare, hotel stay, local transport, food and other expenses – what a UAE resident investor will not have. pay. “I have been traveling between Beirut and Dubai regularly at least twice a month for the past seven months.

We don’t have a fixed budget in mind, but typically a start-up spends around $1 million (3.67 million dirhams) on marketing

– Moustafa Banbouk

“We would have invested a few hundred thousand US dollars – including my travel expenses – because we focused on the IT solutions – the e-commerce portal and the IT architecture. Until now, we had no to invest in human resources, logistics and an office space We just got our office and our license.

“The real spending is going to start now, as we’re hiring people to lease a large warehouse and turn it into a distribution center. Also, marketing will require heavy investment to create the right kind of consumer engagement. We’ll be investing some million US dollars in 2-3 years.”

What were your main challenges when starting a business?

He added that initially, the most crucial part was finding the right technology partner to translate the vision into an appropriate technology architecture.

“It has been done, and we have prepared to start. I think we have spent the money wisely so far. The biggest challenge lies ahead – when we enter the operational side of the business, marketing and market promotion, which will determine our success.”

Lesson 2: Make sure your balance sheet is well balanced between assets and liabilities, cash flow, income and expenses, etc.

Banbouk said business is about taking risks, but smart businessmen take calculated risks. “Knowing the risks thoroughly and having good business planning – from plan A to plan B – is essential in order to have enough options to fall back on if things get out of control.”

When planning a new business or a new project, the entrepreneur advises his peers who are starting out to consider all possible adversities – natural, man-made or economic challenges, after which you plan a few options, including figured out your backup plan – the one you can fall back on.

“The first option, or Plan A, is based on the fact that everything is fine and there are no challenges; let’s say it costs you $100,000 (367,000 Dh). Then, Plan B could include an unfavorable economic situation, for example inflation or increase in the cost of materials or a situation such as a COVID-19 pandemic.

“What do you do? Plan B will help you overcome adverse conditions. Plan B will guide you to complete the project with a different strategy and cost structure, perhaps with a 30% increase in the initial cost .”

Banbouk concluded that financial planning and discipline are still crucial to the success of a business and its owner, while adding that proper budgeting is vital and sticking to the budget is essential.

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