Al Sayegh Home Properties — SME Case Study (UAE)

The business of real estate consists of owning different properties including any unoccupied land, vacant buildings, any residential building, or land for special use.

In the real sense, real estate comes from the word real, which means anything that is having physical existence or property. Real estate can be of four types, which are residential, commercial, industrial, and vacant space.

The functions of real estate for conducting business can be of several ways, which include the construction of new buildings, owning and renting, working as real estate agents, and acting as agents for sellers or buyers (Amadeo, 2020). Nowadays it has become a successful and profitable business, for which the current study is conducted to analyze one small and medium enterprise (SME), associated with this business. The selected company is Al Sayegh Home Properties, which is the key Al Sayegh Home Properties focus for analyzing the business’s success and future possibilities and opportunities. Any challenges in this business are also identified so that they can be overcome for business success.

Overview and Business Restructure The owner and manager of the chosen business is Mr.

Nasser and 20 years ago, he established the business.

Now, his sons are also involved in managing the business. Initially, only one employee used to work under him. As of now, two employees are working under the assistance and supervision of Mr. Nasser’s sons. The sons have taken the entire responsibility of the business, however, Mr. Nasser is still managing the responsibility of the business. Since its inception, the business has not undergone any restructuring. Hence, the company is still following the initial operating structure. Mr. Nasser started the business as he was passionate and driven to succeed in the real estate field. He has always considered it as the source of sustainable profit-making. Therefore, he is the owner of multiple real estate properties.

The properties are based in Abu Dhabi, Dubai, Ras Al Khaimah, along with nations such as Lebanon and the United Kingdom. Among all the properties, few have been sold while few have been given on rent. Based on the renting policy, daily, weekly, or monthly rents are charged. The business of Mr. Nasser is maintained in this process and the rent is collected from each tenant based on the payment policies, acknowledging what they have rented.

Organizational Structure

The organizational structure of Al Sayegh Home Properties comprises of Mr. Nasser as the owner and his sons working under him. The employees of the company are working as assistants of the sons. The organizational structure will be changed in the coming years when new employees will be required to recruit in order to manage the expanded business of Al Sayegh.

The leadership of the company is entirely vested in Mr.

Nasser. Though his sons are working for the business and handling it, the entire business set-up is managed and led by Mr. Nasser. He and his sons form the team of the company, as the company is an SME; there is no requirement for large employee numbers. Mr. Nasser was the founder of the business when he was assisted by only one employee. This increased to two with the business expansion and after his sons became engaged in his business.

The products offered by Al Sayegh include a diverse range of real estates and properties, which are spread in different locations in the UAE. The real estate properties of Mr. Nasser have increased over the years and a list of

the properties has been outlined below

¡ 2000 - Established a compound of five villas and are now rented.

¡ 2008 - The company bought 10 apartments (Dubai-Marina) and few were rented and few were sold.

¡ 2008 - The company purchased 24 apartments and these were either sold or rented (Abu Dhabi- Alreem Island). In that year, Alreem Island was being built, however, the business owner had already made the down payment.

¡ 2010 - Purchased two apartments located in Silicon Oasis (Dubai-Lavista 3) and both are rented.

¡ 2010 - Purchased two apartments (Dubai-Sulafa Tower and Marina) and both are rented.

¡ 2012 - Purchased two apartments (Business bay- Millinum) and have been rented.

¡ 2014 - Five villas (AKOYA OXYGYN, ByDamac) and have been rented.

¡ 2016 - A building has been established in Al Barsha for renting office space and showrooms (As of now, the showrooms generated huge profit and three-year expenses have already been covered.) ¡ 2018 - A villa was bought (Dubai-Al Wasl) and it has been rented for a China-based company, but now it is rented for various other customers.

¡ 2019 - A villa was bought in Meydan and now it is rented.

¡ 2019 - Two apartments were bought in Town Square (Nashama) and are now rented.

At present, these are the products offered by Al Sayegh to its customers, and revenue is mainly generated from the rent collected from the tenants occupying different sites. It is targeted by Mr. Nasser that the product portfolio will widen further with the acquisition of more real estate and properties in the future.

The business of Al Sayegh is conducted by Mr. Nasser by ascertaining the most profitable aspects that can be applied to its operations. The business uses agents for searching customers who can then contact the management of Al Sayegh for further proceedings. Hence, the business works for achieving the goal of maximizing the number of real estates and thus, increasing the business profitability in the long-run. Further, the business has the strategic objective of expanding its operations in future years by engaging more real estate and satisfying a greater number of customers with time (Gibler & Lindholm, 2012). For this, Mr. Nasser ensures that business decisions are made according to the best outcomes that can be achieved and resource allocation is also being done in the most effective manner that is meant to accomplish the key targets of the business.

With the help of the business strategies maintained by Al Sayegh, Mr. Nasser thinks that the business will be capable of forming the most successful business in the category of SME and in its market. He also thinks it can create a tough competitive environment for its potential competitors in the market.

The key operations of Al Sayegh include buying and renting or selling properties in the real estate market. The business operations are seen to be highly effective. The price of individual properties differs depending on the location type, accommodation facilities, or customer- type. This is because property renting or selling are meant for regular people and companies and this is situation or income-dependent. Therefore, some apartments can be rented for some time. However, they may be sold to other customers depending on various factors.

The success of the operations of Al Sayegh is conducted by comparing the income of the previous year with that of the current year and then calculating profit or loss. It is also analyzed that the business made profits by how many units during the swelling process as compared to the renting process so that it can be determined which property or location is more profitable in terms of either selling or renting out. Negotiation is considered important in the business of Al Sayegh, as the most profitable price for the properties are selected in this process that could satisfy the customers also (Lambourne, 2021). This process is also true for agents in ascertaining their commission so that the profits can be distributed between the company and its agents in the most effective manner. Hence, different strategies are also considered important for the successful operations of Al Sayegh.

Brokers are the means by which the company obtains customers and promotes properties. According to Mr.

Nasser, the majority (approx. 90%) of the promotion or marketing is done by the company’s employees and brokers. In order to find and retain customers, brokers utilize their sources. The brokers get a commission from the sales. The company establishes long-term relationships with highly efficient brokers by making a contract and offering them a profit on sales for a time period.

For instance, they receive this for some time, say three years. As a part of the marketing strategy for Al Sayegh, the management also encourages customers for further rehearsals so that new customers can be gained using their loyal attitudes. For this, providing satisfaction to customers is considered highly important by Mr. Nasser, so that they can be an important medium of marketing for Al Sayegh. Further, providing prompt response to the customers is prioritized so that any questions can be solved for them as per their requirements, which is also an important strategy for customer satisfaction (Adams, 2017). By considering these marketing strategies, the success of Mr. Nasser’s business is shown.

As a part of the marketing strategies that will be required in the future operations of Al Sayegh, which has been identified by Mr. Nasser, he said that the company will soon make its online presence with the creation of an active website (Smith, 2019). As in the current time, the business entirely operates manually. Mr. Nasser has identified the dearth need for online presence for the business, which is much essential during the ongoing business world. With the engagement of more innovation and technology in the business world, Al Sayegh will require using a website so that customers can easily know about the real estate they are going to purchase from Al Sayegh according to their confidence. To make the marketing more effective, images of the real estate and properties owned by Al Sayegh will be provided from different positions so that customers can view them and make decisions regarding investing in them (Adams, 2017). They can contact the management through this website, drop their queries and feedback, and even bid prices on this website.

Apart from the creation of a website, Mr. Nasser has also considered expanding the online presence of his business on social media channels such as Twitter and Facebook because the majority of the population are active on these platforms. In this process, the marketing of Al Sayegh will become easier than before, which is capable of attracting a larger number of customers in the business (Adams, 2017). Communications can be conducted through emails, push notifications, and online advertisements to the customers. If the following strategies are successful for the operations of Al Sayegh by expanding its business and making it more profitable, then Mr. Nasser will consider creating a personalized app for his business that can further enhance confidence for customers.

and Overcoming Them The key business challenges for Al Sayegh may emerge due to the economic crisis during the time of global recession. The most recent challenge is due to the COVID-19 pandemic that has witnessed a slowdown of the business. However, the business operations and transactions of Al Sayegh never stopped despite slowing down from before. According to Mr. Nasser, the frequency of apartment or villa renters has slowed down and the situation is not common because he felt that the real estate businesses are always booming due to huge demand and need of customers. Usually, the brokers are supposed to work for 15 hours minimum and some continue to work beyond working hours because they receive high commission or incentives on closed deals.

Though the challenges are intense for the company in terms of slowing down the business operations, the management of the company has never tried to close down the business during this time, as the work process has gone on internally, though the number of transactions has reduced by a great number (Tanrıvermiş, 2020). For this, Mr. Nasser has highlighted that overcoming these challenges is also a challenge.

To overcome the current challenges, Mr. Nasser ensures that business continues during the pandemic also. As maintaining the business is quite difficult during this time, the business is targeting more the local customers than the foreign customers, as communication between countries has been shut through closing down the international traveling system (Al’Malkawi & Pillai, 2013).

Further, maintaining the customers’ attraction towards investing in real estate is done by offering attractive discounts and offers on the properties owned by Al Sayegh. It is predicted that with normalization of the economic situations in the nation, the demand from foreign customers will rise again, which can help the business of Mr. Nasser to flourish more in the coming years.

Successful Best Practices

As an important target for Al Sayegh so that its business can be expanded further, Mr. Nasser aims to buy more real estate and own more properties so that they can be either rented or sold to new customers. This is to create a strong customer base in the coming years so that Al Sayegh can establish itself as a large business in the real estate industry. For this, as an important part of the best practices that can be ensured by Al Sayegh, Mr.

Nasser wishes to create a website of the company in the coming days so that it can have a strong online presence.

A professional website will be required for this so that effective real estate marketing practices can be ensured.

Further, the best practices will also include expanding Al Sayegh’s market presence using social media platforms so that a large number of potential customers can be easily targeted by the company. These practices are considered to bring more success to the company and help to expand its business further.

Al Sayegh Home Properties is currently highly successful in its market as compared to a normal SME. Compared to when it was first established by Mr. Nasser and operated with the help of only one employee, the company has flourished more in the current years and further expansion. This was possible after Mr. Nasser’s sons joined the business, which also required one more employee to be recruited in the company. With this, it is possible to execute more and more business transactions by Al Sayegh as the management of the company has been stronger than before. Further, the company has also been able to successfully acquire several properties throughout its operating years, which has made the revenue of the company also increase more as compared to that at the beginning of Al Sayegh’s operations. The profits have increased from before as Mr. Nasser also acquired properties in the UK and Lebanon, which also witnessed successful operations and increased revenue for the business. From this, it is evident that Al Sayegh has had decent growth from the time of its establishment, and also has the potential to expand further under the guidance of Mr. Nasser.

Based on the existing business operations of Al Sayegh that are highlighted in the current case study, it can be said that Al Sayegh Home Properties is operating in a successful manner and applying the appropriate strategies that must be used for making a business successful. Further, the future strategies that Mr. Nasser is thinking of applying in the operations of Al Sayegh are for business expansion. However, certain recommendations can still be made for the company so that more effective results can be received from his business, which are as

follows

¡ According to the current operations of Al Sayegh, the management focuses on creating a strong and long-lasting relationship with customers, which is effective for enhancing its goodwill.

¡ Al Sayegh shall focus on its advertisement and marketing aspects so that more new customers can be treated just after the end of the pandemic.

¡ If the management is thinking of using the platforms of social media, then the company must encourage its customers to upload videos with their experiences while working with Al Sayegh, which is more effective in forming a new customer base.

¡ Offers and discounts will be crucial marketing and promoting strategies for Al Sayegh after the pandemic as no customers will be interested in any offerings that do not provide them with monetary benefits.

¡ Google can also be used as a marketing tool for Al Sayegh, where a local business page can be set up by the management, which can make the searching process of customers more effective and convenient than before.

Lesson Learned From the current case study and the examination of Al Sayegh Home Properties, several facts and lessons can be learned that are highly effective for the future use of a student. The key lessons that are highlighted from the

study can be mentioned below

¡ It is important to have good knowledge and experience for any business so that business operations can be executed using the most appropriate ways.

¡ It is required to take the help of the best business practices that are appropriate to the nature of the business in order to make any business successful.

¡ For any business, making future planning and predictions is essential so that the operations can be conducted in the same statute.

¡ Keeping the customer satisfied in the long term is important so that they can be loyal, which can help create a strong and effective customer base.

¡ Focusing on marketing strategies is also crucial for any business as these strategies are the key to enhancing potential customers for a business.

¡ For creating a successful business, it is important to implement different strategies step by step, where a new strategy will be applied after acknowledging the success of the previous one.

Based on the key facts that are revealed in the concerned case study, it can be conceded that though maintaining real estate is profitable, in the long term, it is also quite difficult in managing such businesses. This is due to the hectic schedules that are associated with such business including continuous interactions with customers, negotiating with them and convincing them, answering their nonstop queries, and so on. Further, negotiations are also required for interacting with the brokers, who also negotiate for getting the best porches for the principal, which is Al Sayegh in this case. Hence, high knowledge and skills are required for conducting a successful real estate business, which can be enhanced with the application of experiences. As Mr. Nasser has experience regarding the same, he is able to guide his sons in the business, which further can take the business forward and make it more successful in the absence of Mr. Nasser. With this, it can be said that Al Sayegh Home Properties is altogether a successful business, which is having different opportunities for business growth and development in the future.