Stroke of luck? Divine design? Or sheer genius? Sherine Nasr talks to entrepreneurs who made it big despite the odds When it comes to success in the business world, everyone has a unique story to tell. Yet successful businessmen and women seem to have one thing in common -- the courage to take risks on opportunities which no one else can see. "One may also add, the ability to see light at the end of the tunnel," stated Yomna El-Sheridy, managing director of Special Foods Industry International Co (SFII), the leading Egyptian manufacturer and exporter of olives, olive oil and pickles in bulk or retail packaging. "This is especially so for small entrepreneurs who are prone to experience the most hurdles." El-Sheridy, who barely escaped bankruptcy in 2000 when the Egyptian pound devaluated, was able to grow her company to 80 employees with a turnover of over LE20 million in a few years. Lack of finance was not the only obstacle she faced at the launch of her project. "Banks are willing to lend you money to buy a car, but they won't lend you money to buy a factory," she revealed. Lack of market data and skilled labour, as well as plenty of bureaucracy also hold back business. But El-Sheridy is not the only entrepreneur who was able to captain her business safely through rough seas. In fact, the experience of nine growth- oriented companies and the entrepreneurs standing behind them was profiled by the Small, Medium and Micro Enterprise Policy (SMEPol) Development Project. Sponsors felt this was the best way to mark the end of the project in 2008. SMEPol is a partnership between the Egyptian Ministry of Finance, the International Development Research Centre (IDRC) and the Canadian International Development Agency (CIDA). The project used several criteria in selecting the firms to be profiled, including being in business for at least one year; employing at least 20 people; and to have achieved an annual growth rate in employment and sales of at least 20 per cent. All nine showcase companies launched businesses in fields where they felt there was opportunity, an unmet need, under-served markets or a comparative advantage. Among these is Ahmed El-Shawy, chairman of Educational Projects Company (Edu Fun) which began as a small workshop in Cairo with five employees. At the time, 1990, the market for educational furniture and toys in Egypt and the Arab world was virtually non-existent. "We started from scratch and had to learn everything ourselves," said El-Shawy. Struggling to survive in a market that had no concept of pre-school furniture and toys, the turning point came in 1996 when Edu Fun participated for the first time in the Nuremberg Toy Fair -- the biggest toy expo in the world. "From that point on, we decided to concentrate on export," recalled El-Shawy. To meet international standards, Edu Fun has to import almost 90 per cent of its input materials, including non-toxic paints, glue and wood. "Sticking to international quality standards is an absolute must for this company's survival," he noted. Edu Fun has managed to grow into a globally known brand with revenues worth almost LE15 million. The small workshop has grown into a big factory, with 280 employees and 10 professionals with industrial design and art background. Successful as his company may be, El-Shawy cherishes a long-term vision for further growth. "The size of the Middle East toy market is estimated at $1.5 billion per year with an annual growth rate of 11.8 per cent," El-Shawy calculated. "The opportunity is staggering." Another success story was born in 2002 since IT and outsourcing are among the fastest growing sectors in Egypt. Allied Soft was created to provide administrative and technical IT solutions to leading private and government organisations. "We develop and maintain IT systems, ranging from e-learning to corporate Intranet solutions, large scale date warehousing and customer enquiry handling systems," stated Allied Soft Chairman and CEO Mohamed Reda. Within four years, the company managed to acquire a very impressive client list, including several ministries, government institutions in addition to private corporations in Egypt, the Arab world, Europe and the US. The Allied group of companies now employs 3,000 people, with $19 million in sales in 2007. "Entrepreneurs who have the experience to grow in a short time are what this country mostly need," according Lois Stevenson, senior SME specialist and SMEPol project coordinator. Stevenson added that SMEs are the largest contributor to GDP in Egypt. Through her experience in the field, Stevenson underlined some important facts about SMEs in Egypt. According to her, 94 per cent of enterprises have less than five employees, while projects with more than 20 employees make up less than 0.75 per cent of employer firms. Few SMEs grow beyond their start-up size, while average annual growth for ones which do grow is less than three per cent. "Prospects for increasing the private sector are limited unless steps are taken to alter the structural distribution of the enterprise size of the micro, small and medium enterprises," pointed out Stevenson. She stressed the Canadian experience which has given a big boost to the micro and small firms there. According to SMEPol, high-growth firms in Canada make up less than seven per cent of all firms but generate over half of net new jobs created by continuing firms. "Most important is the fact that 99 per cent of all high-growth firms were micro and small firms," Stevenson added. The nine success models also started as micro or small firms with a total of 122 employees at start-up. "Now they employ 4,000 people and generate combined revenue of almost LE2 billion," revealed Stevenson.
