The Research Process in UAE Business


There are many opportunities for anyone seeking to indulge in a business activity. However, the likelihood of an opportunity succeeding varies considerably and is often difficult to tell by mere opinions or advice. For accurate determination a research necessary to establish all the variables that will make the business succeed or fail. This paper explains the typical business research process and draws examples from companies in the UAE.

Identification of a business opportunity/idea

“Entrepreneurs have many different ways of identifying business ideas, some of the common methods are; the notion that someone else is doing it and it is successful, on one can base on his/her skills and experience to pursue a certain business opportunity.” (Kahn, p. 56) These are unscientific ways of identifying a business idea. The scientific approach requires extensive research which mainly focuses on two approaches. “The demand based approach and the resource based approach.” (Kahn, p. 57) In order to utilize the resource based approach the entrepreneur must be able to answer the following question. What are the resources available within a given environment that can be utilized to produce goods and services on a sustainable basis? The entrepreneur therefore is required to identify the available resources and categorize them in terms of origin. For instance, the skills available, land and raw materials could be used as resources for a certain business idea. “The demand based approach focuses on the demand or a market need or scarcity.” (Kahn, p. 57) This could be as a result of changes in the economy, government policies and changes in technology that may trigger the demand for new products and services that are not currently available in the market. Thus, the entrepreneur needs to bring about what is lacking in the market and formulate ways to satisfy his/her customers. “For Instance the establishment of the international fish farming Company in Abu Dhabi to cater for the need for fish.” (Dubai data directory).

Evaluating the Business Idea

In order to make sure that the chosen business idea based on resources or demand is profitable the entrepreneurs must evaluate the following variables.

Market: ‘The market constitutes a group of potential customers who have the purchasing power and unsatisfied needs.” (Kahn, p. 78) Therefore the business researcher needs to identify these three elements. First, should be buying units or customers in the market. Secondly, “potential customers must have money or have access to credit facilities or any other means of exchange in order to purchase goods and services.” (Kahn, p. 79). Finally, there must be unsatisfied need among the customers. Some will need motivation to recognize that they have unsatisfied needs. In a nut shell, the entrepreneur must identify the target market, analyze the characteristics of the target market, identify the needs that exist within the market, state if the market is seasonal and how he/she will adjust during the off season and finally evaluate the cost of producing and selling the services or products.

Competitive Advantage: “This is accomplished by the production of goods and services that are perceived to be superior by the customers.” (Kahn, p. 45). To identify whether the proposed firm has the capacity to compete in the market place, the entrepreneur will need to identify who the competitors are, their current performance, the similarities or differences between his/her product or service and that of the competitor. This is effectively done by the SWOT analysis. For Example, “the Emirates Food Stuff and Mineral Water Company” conducted a research which led to reforms and development of strategies that enabled it to beat its competitors and ascend to the top. (Dubai data directory).

Profitability: Projections of a business’s profit and finance enquiries are important in determining whether the opportunity will be profitable or not. Income statement will indicate the amount of profit generated by the business over a given period of time often one year. The income statement answers the question, how profitable will the business be? The income statement is represented by the equation:

Sales – Expenses = Profits

The income statement often contains the following information

  • Sales revenue
  • The cost of procuring the goods and services to be sold
  • Operating expenses that are related to marketing and distribution of the goods and or services
  • Financing costs of doing the business ( the interest paid to the creditors)
  • Income tax.

Business plan

After evaluating the business idea and ascertaining its viability, the entrepreneur proceeds to write the business idea the entrepreneur should proceed to write the business plan. “The business plan is a written document that describes the goals and objectives of the business and spells out steps that will be taken to achieve the goals or objectives.” (Kahn, p. 110). Every characteristic of the business should be described in the business plan, this includes; the marketing management, operations, financing, risks and time frame for accomplishing the goals set by the entrepreneur. For entrepreneurs starting a new business from scratch, the business plan must have the following objectives:

  • Identification of the nature and context of the business opportunity i.e. it answers the question why does such an opportunity exist?
  • It reveals the approach the entrepreneur plans to take in order to exploit the business opportunity.
  • It identifies the competitive advantage, the fact that reveals whether the business opportunity is likely to succeed.
  • It serves as a tool for raising the required finances.

In summary, the business plan should lay out your basic idea for the business, describe your current position, indicate where you are going and how intend to reach there. It should clearly explain the key variables for success or failure and therefore provide the entrepreneur with alternatives.


“The specific needs of the proposed business venture govern the nature of its initial financial requirements.” (Kahn, p. 155) For instance if the business will be a food store, the financial planning must allocate funds for the building, inventory, office space (rent) equipment and other items required for this kind of operation. An analysis of financial requirements of financial requirements must consider the investment needed and expenses incurred to start the business and allow it to grow. When seeking the initial capital, the entrepreneur must be able to answer the question, how funds are required and for what purpose? Financing for the opportunity often comes from two main sources which include; “debt financing and equity financing.” (Kahn, p. 156).

“Debt or liability financing refers to money that has been borrowed from the financial institutions such as the Emirates Bank International and must be paid at an agreed time in the future.” (Kahn, p. 156) Equity financing represents the owner’s investment in the business. “This is the money the entrepreneur personally puts in the business without any specific debt for repayment.” (Kahn, p. 156) Initially the entrepreneur will use personal savings from other business and then attempt to access savings from other people including family and friends. In establishing a suitable source of financing for any business, the following factors needs to be considered: The amount of cash required’ every stage of business growth requires different amounts of cash. For survival the entrepreneur will source for funds from family and friends but when the business matures the funds will be sourced from formal sources; the cost of borrowing, high cost of borrowing is likely to kill the growth momentum of the business; conditions for borrowing, the entrepreneur must evaluate the conditions for borrowing, this include, the grace period, amount and the security required; other factors are that the entrepreneur should be able to control his/her business by ensuring that he/she owns the biggest share and the entrepreneur should only borrow money when it is absolutely necessary. For debt financing the entrepreneur should proceed to write a funding proposal. “For instance, the Union group of companies was established in 1985 by Shiakh, Tariq Al Qassimi and rapidly grew into a large conglomerate, the restructuring and debt financing of the conglomerate in 1995 saw it becomes a larger cooperation that it was previously.” (Dubai data directory)

A funding proposal

“The funding proposal forms the basis of the relationship between the entrepreneur and the donor.” (Mugenda, p. 15). This document can make or break the business dream, thus it needs to be written carefully. The document should give an impression that the entrepreneur is up to the task by creating an impression that the entrepreneur is thorough, careful and committed to doing a good job, right from the start. The proposal should be persuasive, technically detailed and correct. After preparing the proposal the entrepreneur should proceed to submit the proposal, accept the report and the award and establish the project.


With the increased competition in the business arena, no business idea can flourish without appropriate research. The business research lights the path for the entrepreneur giving him an opportunity to visualize all that is needed and take the necessary steps to implement the project.

Works cited

  1. Dubai data directory. “Classified Companies.”, 2010.
  2. Kahn, Ellison. Principles of business planning. London: Thames and Hudson Limited, 1999. Print.
  3. Mugenda, Olive. Writing a Business Proposal. Nairobi: African center for technology studies press, 2002. Print.

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