Money & Me: ‘I sold my home to start my business – and have never looked back’

Entrepreneur Mahmoud Adham says the fear of reaching the age of 75 without risking anything prompted him to start a healthy snacks business

Mahmoud Adham, founder of Munchbox, sold his home in Egypt to raise money to start the healthy snacks business in 2014. Pawan Singh / The National

A common experience for expats in the UAE is the “Dubai Stone” – the weight they put on when they first relocate to the country. For fitness freak and marathon runner Mahmoud Adham, that was six kilos in the space of two months – thanks, he says, to the snacks in between meetings.

Faced with a lack of healthy options, he was inspired to quit his corporate job and launch a healthy food delivery service in the UAE. Munchbox, the company Mr Adham founded with two other partners, now exports to Kuwait, Saudi Arabia and Bahrain.

Like other businesses in the country, it was particularly badly hit by the coronavirus, but a double pivot – to online buyers and to locally sourced ingredients – has helped to mitigate early losses, he says.

The Egyptian-Belgian national, who is 43 years old, is single and lives in Dubai Marina.

How did your upbringing shape your attitude towards money?

I grew up in Qatar in the 80s as an expat kid. I often spent my weekly allowance – the equivalent of Dh50 – before the end of the week. Getting an advance on the following week’s allowance was not an option, and that first taught me about personal financial planning. Also, my late grandmother taught me how to put aside a percentage of my allowance. She bought me my first money box and also kept the key. So, when I needed money, I had to go to her and there was always an interrogation about why – this was around the age of 8.

When did you start working and what did you earn?

My first job was at the age of 17, as an intern in the Mercedes-Benz factory in Stuttgart, Germany. I earned 700 Deutschemarks per month, or around €1200 (Dh5,220) in today’s money.

When did you first decide to go into business?

I had worked for almost 11 years for Procter & Gamble and Mars in four countries and realised I did not want to be my boss or my boss’s boss. My learning curve had also flattened, so when I saw the opportunity for healthy snacks in Dubai, I sold my home in Sheikh Zayed City, a suburb of Cairo, to get the money to start Munchbox in 2014. I bought it off-plan in 2000, when it was still desert. It sold for 2.5 times what I paid.

To not let go of anyone in my team, I relinquished my salary for three months during the coronavirus-induced lockdown

Why did you need to sell your home?

It was extremely challenging to convince investors to back someone with zero business experience. At that point, the start-up scene in Dubai was nowhere as dynamic as it is now. So, I used my life’s savings – and my credit cards – to fund my dream. My theory was that once investors see it working, they will come. And it worked!

How many properties do you own now?

I currently own the home I live in. Anything else I make goes back into Munchbox, where returns, at double digits, are greater than the 6 to 7 per cent I’d get from real estate.

How did you overcome the fear that the business might not take off?

The challenge is to visualise success and that helps a lot. If you visualise nothing, you stay where you are. For me, the fear of doing nothing was greater than the fear of reaching age 75 without having risked anything. That’s far scarier.

What has been your weakest financial moment?

That was in 2016. My bank account was zero, and I was basically living on a prayer. I’d used my personal savings to grow the company and maxed out my credit cards to pay suppliers. Although we had a verbal commitment from the first investor in Munchbox, nothing had been signed yet. That lasted for a few days until the funds were wired across.

Mr Adham says he invests most of his earnings back into his business because it offers double-digit returns compared to the 6-7 per cent returns from real estate. Pawan Singh / The National

How has the coronavirus pandemic impacted your business?

When Covid-19 first hit, we saw a spike in demand, with customers stocking up on Munchbox products to ride out the lockdown. After that wave, sales from the 400 petrol stations, hotels, coffee shops, cinemas and gyms that we supply to literally went to zero overnight. We immediately focused on maximising sales from supermarkets and other outlets that were still open. Meanwhile, the R&D team accelerated the launch of 44 new snacks that were planned for the last quarter of this year, and our IT team built a new consumer website to sell these new snacks to the people stuck at home.

With our factories working in shifts around the clock, we were able to triple our offering. The lockdown also hit supply chains, and we had to find local alternatives overnight. Our supply base is now more stable because we’re close to 100 per cent locally sourced.

How have you consolidated your financial position since the pandemic?

In order to not let go of anyone in the Munchbox team, I relinquished my salary for three months during the coronavirus-induced lockdown, and my management team voluntarily took a 50 per cent pay cut. We also worked with our banking partner to defer loan repayments.

Are you a millionaire yet?

I’m cash-poor but asset-rich, because I re-invest almost everything back into Munchbox. So, if you want to include the valuation of Munchbox in the calculation of my net worth, then I became a millionaire a few years ago.

Are you a spender or a saver?

I’m a saver. I save enough to be ready for a rainy day.

What investment failures have you experienced?

I invested in a restaurant a few years ago. That went out of business. Now, I only invest in Munchbox as it has shown the best return by far versus any other opportunity I’ve come across. The value has multiplied several times over.

How do you avoid a repeat of previous situations?

I try to put aside enough for family emergencies, to take care of my mother and sisters and at least one year’s personal expenditure. This depends on the profit the company makes. The minute I touch that reserve, my priority is to top that up again. We’ve also made sure Munchbox has its own war chest, thanks to our investors’ liquidity.

What has been your proudest financial moment?

My proudest moment was when Munchbox crossed $1 million (Dh3.67m) in revenue several years ago. The biggest financial milestone we are looking at is crossing the $10m revenue – that’s soon, hopefully.

What financial advice would you offer your younger self?

Get educated on financial markets, read more about investing and business start-ups.