By Dedan Kimathi
According to a report from the Global Entrepreneurship Monitor (GEM) dating four years back, Uganda is ranked second across the globe in terms of Total Early-stage Entrepreneurial Activity (TEA).According to findings from the Washington based financial institution, 60 % of Ugandans aged 18 – 64 years harbor interests of starting a business or are already running one.
Kampala is home to a number of emerging enterprises that range from restaurants, grocery shops and real estate among others. Not surprising, the majority of these start -up enterprises are supplementary sources of income.
Without hiding his emotions, Rawlings Ayesiga sales personnel with Riham says that ever since he started his mobile money shop, he has been able to meet his parental obligations without any fear. Ayesiga says that at least he can afford to keep shillings 300,000 to meet his rent.
“Before I started this mobile money shop two years ago, I was always at logger heads with my landlord and catering for my two toddlers. Now at least, I can save some money to cater for food and rent”, Ayesiga explains.
Similarly, Paula Kabahiirwa an elementary school proprietor and trained teacher does not regret investing in the education sector. The school which she started twelve years ago while at the same time teaching at government-owned Arya Primary school has quickly morphed into a viable venture with an annualgross profit of forty million shillings. The fat returns have in turn helped her settle comfortably into retirement unlike majority of her peers.
“With this school, I have been able to educate my children, purchased land in Mukono and plan to invest in agriculture back home in Rukungiri. At least I am happy that my children’s future is sorted”, Kabahiirwa exclaims.
That said, the pertinent question remains whether these businesses can stand the test of time. Whereas some entrepreneurs have witnessed their entities grow in leaps and bounds, others such as Ezra Akankwatsa have disheartening memories.
Akankwatsa who admittedly says that he has just finished clearing a loan burden of fifteen million shillings has no hopes of delving into self-employment again.
“I have tried whatever, a shop, bar and others but things have failed. I even obtained loans to support my businesses that almost took me to jail”, he laments.
Accordingly findings from a 2004 study done by Makerere University Business School in conjunction with the European Union indicate that the business failure rate in Uganda stands at 50% meaning that half of the sprouting businesses collapse every year.
Now whereas many are quick to blame the geo-political environment, experts such as Veronica Namwanje say it boils down to one’s business acumen.
Poor Management skills
Veronica Namwanje a business management expert and executive secretary of Uganda Small Scale Industries Association (USSIA) says that most proprietors lack the character and expertise of engaging with their employees something which greatly affects the performance of enterprises country wide.
She says whereas it is normal of business owners to focus on profit generation, one must ensure that his employees have a good working environment. Otherwise, the employees might fail you intentionally.
“Once an employee realizes that you are selfish minded or arrogant, he or she is not going to sacrifice his entire energies for the proliferation of the enterprise”, Namwanje points out.
Starting a business no matter the type is not a problem but starting one without a reliable business plan is grievous. According to Mary Auma an investment specialist, one must first undertake market research about the business he or she intends to start, put in place a risk aversion plan and establish whether that entrepreneurial idea is viable in that particular environment before setting up one.
“You must have knowledge about how similar businesses are faring and put in place measures to mitigate any uncertainties that might arise in the due process of running your business”, Auma notes.
Publicize your business
Christopher Nyesigire an international business graduate and owner of Ntinda-based popular rollex hang out Ugaroll says that business entrepreneurs must strive to inform the general public about what type of services they offer and where they are located. Nyesigire says that for those that do not have the resources to engage publicity firms should at least verbally market their businesses to the closest people around.
“For the beginning tell your neighbor, friend and relative about what you are dealing in. These will in turn tell others”, he says.
However Mary Auma an investment specialist slightly disagrees. According to Auma, undertaking brand visibility without a publicity plan is counter-productive itself.
“First and foremost, you must have clear objectives and aims why you are engaging in this. Without this you are merely gambling”, Auma advises.
Joshua Abaho a professional photographer and media practitionersays that patience is paramount to the survival of an entity. Abaho who boasts of a clientele that includes Australian superstar Daniel Aranda deducting from his personal experience says that it took him two years to start reaping profits.
“If I was not resilient, I should have given up two years back. Failure to do so is what has enabled me to scale the heights”, Abaho states.
Furthermore, he says that one must not be discouraged by meagre returns at times since this is dependent on business season.
“Every business has the peak season, photography inclusive. So one must have that in mind”, Abaho clarifies.
Veronica Namwanje advises business proprietors especially those that have large enterprises such as Hotels and schools among others to consider holding training workshops or sending employees to school for the sole purpose of enhancing their hard skills.
“Sending your workers to school or organizing training workshops is not a waste of time. It helps them gain skills and experience in running a particular business”, she says.
As if that is not enough, a study by Mbarara University of Science and Technology (MUST) don Charles Tushabomwe Kazooba titled “Causes of small business failure in Uganda: Case study of Mbarara and Bushenyi” notes that poor record keeping and mismanagement collectively account for 59% of why most start up enterprises fail while lack of credit accounts for a mammoth 90%.