Small Investors: More People = More Business [Archives:2008/1173/Business & Economy]

July 17 2008

By: YemenTimes Staff
The second largest employer in Yemen after the agricultural sector is the Small and Micro Enterprises sector, defined by organizations which provide employment to a maximum of five persons, and sometimes as little as one. These small and micro enterprises are spread across most sectors and provide goods and services for the largest segments of the markets who rely on the services of such small organizations, such as your friendly neighborhood bakery, laundry service, and grocer. In this survey, Yementimes investigates the investment trends in this sector with a focus on urban Yemen.

More Competition:

Hamoud Saleh, a small retailer in Sana'a, says that a few years ago he was the only such retailer in his part of the neighbourhood, but today there are another two who have mushroomed each within 100 meters of his shop. He complains saying that now he has to share the few customers in the area with another two which means that he either has to offer lower prices or walk the extra mile in being nice and personal with customers so that he would create a relationship with them so that they would always buy from him.

Abdullah Mouqbil, a small telecommunications shop, says that the main problem is that big companies try to penetrate the market even more while depriving small businesses like his of whatever market they have, he says that the mobile telecommunications services have continued to decrease in price all people have mobile phones and no one needs to go to the telecommunications shop to make a phonecall, so now most of his business is generated through the retail of mobile phone recharging units.

Mohammed Abdulsattar, owner of a vegetable shop, says that more choice for consumers does not necessarily mean that he will be affected, adding that most of his sales in terms of value are from fruits bought by people passing by the main road he is at, and not from the neighbourhood, adding that as long as people know that you exist in a particular location they will always think of you when they need to buy from you.

More People:

Continues Hamoud Saleh by reiterating that there are more buildings, houses, and residents in the neighbourhood, and this is a good sign because the more people there are the more likely it is that more people are coming to buy from you, adding that the increasing number of people makes it easier for him to co-exists with the other new retailers emerging as there are more customers to go around anyway.

Abdullah Ghalib, a Qat retailer, says that the more people there are, the more business there is, emphasizing that retailers respond to market forces in terms of demand, the more demand there is, the more supply will be generated, and vice versa. But from the looks of it, demand and supply are growing in spite of all the hardships we hear about.

Abdullah Al-Shara'abi, a new baker, says that he opened his bakery four months ago after he realized that most retailers in his area buy their bread from bakeries from other neighborhoods, therefore he saw an opportunity to open right in the neighbourhood and therefore take advantage of demand available, saying if i'm next door people will want to buy bread directly from the baker, and this is what is happening.

– Government Facilitation:

Saqid Al-Shamiri, a barber, says that small businesses, over all, are suffering greatly, not only because there is more competition, but because their costs of doing business are going higher as well, including rents, costs of power bills, and newfound taxes being enforced on the small businesses. He says that last year, and for the first time in seven years, he had to pay a tax of 50,000 Riyals as a fixed lump sum per year, he says that is my net profit for one month of activity, it is just too much.