(MENAFN- Muscat Daily) Oman is a land of opportunities with significant potential for firms of all sizes and across a variety of sectors. Business confidence has withstood the fall in oil and there has been little slowdown in the pace of growth. SMEs can capitalise on this potential by focusing on business opportunities that fit their skills and resources says Felton.
This year is the 45th anniversary of the accession of His Majesty Sultan Qaboos bin Said. It's also the final year in Oman's 8th Five-Year Plan. We've long been optimistic about Oman's prospects. What we have witnessed so far this year has reinforced that optimism.
At the start of this year a government symposium laid out plans to ensure that ten per cent of contracts went to small- to medium-sized companies. This is a pleasing initiative and should present significant opportunity to the SME segment. While there is a potential risk in the ability of SMEs to deliver what amounts to an enormous volume of work this can be mitigated through strong planning with sound financing structures being put in place.
For SMEs themselves there may be a temptation to take on unachievable or unprofitable contracts as they rush to claim their share of the new business. It is more important than ever to choose carefully which opportunities to go after and ensure they are aligned with the core strategy of the business.
Smaller businesses need to be very clear in their strategy. They need to know they have access to the working capital required to make the most of any new contract. They need relevant expertise in their organisations. I have seen businesses fail because they did not have the right people in the right positions to fulfil their potential. That talent does not need to be within the four walls of the company; it can be sourced from outside but the business needs the ability to find that expertise and apply it.
The particular temptation given the size of projects in Oman is to go after something that a company just doesn't have the scale to execute. The wise choice is the one that gives a company a solid track record a profit and most importantly is actually deliverable.
So where are the opportunities The hydrocarbon sector remains dominant despite diversification initiatives by the government. We're now seeing oil extraction becoming more efficient to lower the costs and mitigate the risk of a further fall in prices. There is also the Oman Rail project a lot of activity in construction and there are good stories coming out of mining tourism health care education and professional services where progress on major projects is filtering down through the supply chain.
The government has continued spending on infrastructure including expanding and developing the three key ports. The new national rail network will connect those ports with other countries in the region. This means there should be strong potential for Omani companies to move into wider GCC business. There are also trade agreements with Asian economies that promise to bring opportunities from overseas.
Moving into new overseas markets can be an excellent route to growth. Companies do need to be aware though that international expansion is a step that needs to be taken with caution and should fit with a company's strategy expertise and ability to make it happen.
Companies small and large are moving ahead with ambitious but realistic plans for growth in 2015 and beyond. What we are seeing in the current environment is increased prudence and care and a recognition of short-term economic constraints. It is a pragmatic reaction to the macroeconomic climate in Oman and in the wider GCC where lower oil prices have caused people to take stock of their vulnerabilities. But this is not about companies feeling anxious; rather it is a sign of well-run businesses adjusting their plans.
Felton is head of corporate and business banking at HSBC Bank Oman's commercial banking division
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