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How to tough out those seasonal Dubai business slowdowns

Aug 18, 2017 | UAE Company Setup

Success, Churchill is supposed to have said, is walking from failure to failure with no loss of enthusiasm. It’s a fool proof approach, yet one that seems more valuable in theory than in reality.

When those difficult business lulls come around, they can spook even the hardiest of business owners. Slowdowns and upturns in sales are all part of the natural economic cycle; but that’s not to say the transitions are easy to handle.

So, when business is slower than usual, it’s crucial that we keep cool heads and approach the situation with the same tools we use when addressing any other professional problem: objectivity and logic. It’s all about taking steps to keep our enterprises moving forward, regardless of the current climate. 

Understanding business cycles in the UAE

Although the idea of business slowdown seems strange at first, it’s a natural part of any economy. As Howard J. Sherman noted in his book, The Business Cycle: Growth and Crisis under Capitalism, every capitalist country is subject to its own business cycle. Those cycles are influenced not only by international events, but by national factors as well: things happening uniquely, or at different times, in different nations.

Every capitalist country is subject to its own business cycle. Those cycles are influenced not only by international events, but by national factors as well.

What’s more, this phenomenon doesn’t only affect one particular industry. Often it is economy-wide: each and every industry in that country will be affected by the downturn. So, it doesn’t matter which sector we happen to be in, we will all have the same anxiety-inducing experience during a period of slowdown. 

How the Dubai business cycle works

So, how does this relate to Dubai and the UAE? Well, the periods of slower business activity are well-documented in the Emirates. According to research by recruitment specialists Robert Half UAE, 93% of finance leaders in our region report that the summer months have a negative impact on their companies and sales.

It’s no rumour either. If we look to last year, for example, the Dubai Financial Market saw two major dips in price levels and the volume of activity; one between October and December and one during the summer months of May to July. And this appears to be a pattern over the years, so it should come as no great shock to us when business starts to slow down at these times. 

The Ramadan effect

To better understand this cycle, it’s worth reflecting on what Sherman found, and looking at national events that take place on an annual basis. Perhaps the most obvious reason behind the annual summertime slowdown is the holy period of Ramadan.

As Ramadan currently takes place between May and June, it’s logical to assume that it is having an impact on business activity in the UAE and Dubai. It’s no great leap to see a correlation between this time period and economic activity in our region.

There has even been data analysis underlining that effect. A 2014 study by the British University in Dubai, which covered the five-year period from 2008-13, concluded that Ramadan affected UAE stock market performance by almost 1%. While that may not appear to be a huge change, it’s enough to impact our enterprises in a noticeable and troublesome way.


Still, there’s one thing we must remember: every year this happens and every year business sales recover directly after the slowdown period. There’s no reason to worry during these slower periods. Instead, we should use them as opportunities to reflect, plan and make business improvements. 

Toughing out a business lull – tips to get you started

Unfortunately, all the logic in the world doesn’t stop us getting anxious when a slowdown hits. While most of us are well aware of the business cycle and its trends, few of us prepare as well as we might for the inevitable lulls.

The key is to ensure that you press on during these slow spells, and plan ways in which you can use the downtime to enhance your long-term economic standing.

Here are some of the ways I’d suggest doing that.

Prepare financially: In times of prosperity, it’s hard to see beyond the bottom line. But in good times it’s sensible to be cautious about the future and any hardships it may bring, by building up your cash reserves ready for the slow times. This has been a big learning curve for many of us. If in previous years you’ve struggled financially during a lull in activity (for example with your business’ cash flow) learn the lesson and manage your balances cautiously in preparation for the slowdown. 

In good times it’s sensible to be cautious about the future and any hardships it may bring, by building up your cash reserves ready for the slow times.

Stay optimistic: Perhaps one of the hardest challenges we face during a slowdown is staying optimistic. But there’s evidence to suggest that optimistic CEOs gain better results. A study from the University of British Columbia recently found that the tone in which you speak, either optimistic or pessimistic, has a direct positive or negative effect on your business returns. Maintaining a sunny outlook could help push your enterprise through a financial lull.

As if that weren’t enough, research from Michigan State University suggests that workplace negativity leads to low levels of productivity. So, while the natural response to slower business conditions may be a negative atmosphere across the workplace, this is something that, as business leaders, we should look to counter at all times. 

Be honest about performance: Staying optimistic doesn’t mean covering over the facts. While our initial reaction may be to keep poor results under wraps, there may be other ways to approach it. Putting on a brave face and pretending that all is well is not only disingenuous, but could also hold your business back in the long run.

Recent research from the University of Missouri found that when companies publicly accepted blame for their poor performance during hard times, rather than blaming external factors, their stock prices actually rose. Owning up to failings could actually be a bold and smart PR move, helping us to weather the bad times.

Strengthen your team: A strong team is the heart of any successful business. Sometimes team development gets overlooked in favour of more pressing matters, delivery deadlines and sales targets. When conditions start slowing down, taking the time to strengthen internal bonds within your company can be a smart move.

There are many kinds of team building initiatives that can be used for this purpose. The best of these – as a 2011 study from the Universities of Michigan and Western Australia found – use motivational tactics which include whole teams as teams, as opposed to dealing with individual team members as individuals. Running team-building initiatives like this at slow times helps strengthen the business ready for the better times.


Run a SWOT analysis: During slower periods there’s often a chance of respite, and more time to evaluate our businesses and reflect on how they could be improved. One way of doing this is to undertake a SWOT analysis – taking stock of the Strengths, Weaknesses, Opportunities, and Threats that affect our company. Doing this helps us measure in an explicit way how well the internal cogs of our companies are turning and the part that external factors may be playing.

There are many resources that can help you with this process, for example Justin Gomer and Jackson Hille’s An Essential Guide to SWOT Analysis. But, fundamentally, a SWOT analysis helps us as business owners to better understand the current positioning of our company and use that information to improve various areas of the business.

Change your sales approach: A business slowdown is no time to admit defeat. Sometimes we just need a change in approach to help boost our company’s sales. While profit slumps are a natural part of any business cycle, there are still ways in which you may improve this area of your enterprise. It may simply be about changing tack and trying something new.

While profit slumps are a natural part of any business cycle, there are still ways in which you may improve this area of your enterprise.

For example, improving connectivity between salespeople and other members of the workforce could be a way forward for many of us. Research from Michigan State University in 2015 found that having strong internal relationships within a company led to a significant increase in overall sales volume. Simply improving the connectivity of sales with the rest of your company could be all that’s needed to help your sales team to excel.

Encourage innovation: Breathing fresh life into a business is often a good way to bolster it through hard times. One thing we can do is look internally for innovative new ideas and ways to move forward. This is something that many business owners fail to do, yet it could make all the difference to your company in the long run. Researchers from Southern Cross University who looked at SMEs in the UAE suggested there should be more opportunity for employees to ‘express their innovative ideas within a protected and conditional framework’. That is to say, staff should be encouraged to innovate on a day-to-day basis. 

In the end, keep your cool

Business has never been a straightforward climb to success: instead it’s something of a rollercoaster. There’s no way of getting around the fact that performance peaks and dips at different times throughout the year. The cardinal rule is to stay as calm as possible and push forward through these slowdown periods. Staying productive and cool at difficult times will enable business owners to overcome short-term struggles and build long-term success.

Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to info@virtuzone.com, or click here.

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