The reason we have so many investors flocking our country is because Uganda is a virgin business area. Statistics indicate that Uganda has the biggest number of people starting businesses every year in Africa, however most of these businesses don’t live to see their first birthdays despite being great ideas and relevant in the economy. Here are some of the reasons why businesses collapse.
Poor research skills
Chris Magezi, a financial adviser notes that most Ugandans invest in businesses without taking time to know what they are going into, “a good business idea should have a plan: for example you should know your market( target customers), where it should be located (strategic place), what it takes money and other necessities needed among others.
One should take time to talk to people who are in the same business to get ideas of how it operates, challenges and how to overcome them.
The way you handle your business especially finances count a lot when it comes to business growth and sustainability. Magezi notes that most people start sucking money out if their businesses in the first days which is a bad idea. This doesn’t give your business time to grow and stand on its own.
“A good business person should reinvest 80 per cent of their profits to enable it grow. This should be done at least for the first two years,” he notes.
Not following up on employees and guiding them on how best you want your business to run would pull it down. No one will be as passionate as you the owner, so you have to supervise everyone closely.
This also includes customer care, most people have a bad attitude towards customers which pushes them away from their products. Magezi notes that a business’s first form of advertisement is good customer care, a person you serve so well will always recommend another and that way you will grow your customer base.
Lack of ideas
Idah kiberu the Director Star Base Enterprise notes that when you produce a product which is similar to the one already existing on the market, yours will be seen as a duplicate hence will not be embraced, “you need to come up with unique ideas that are different from everybody else’s. This could be in packaging, colors used, slogans among others.”
Poor marketing strategy
The way you present your businesses speaks volumes to your customers, Kiberu says you should take time to inform people about you and what you do regardless of how small or big your business is. Use cheap means at first and grow as the business grows. Embrace social media, Kiberu notes that instead of spending a lot of time doing “useless” things on Facebook, Watsup or twitter, post your business for people to see.
“Some people put in a lot of money to advertise in Newspapers, TVs radios among other when the business is just starting which could break the business as it has less returns, you should start with simple means of word of mouth, social media and big media can come in later when you are stable,” she notes.
“Once in a while, give your customer’s gifts or presents to pull their attention and to show them you appreciate their support.”
Not being open to feedback
According to Magezi, a good business should be open to feedback at all times, take time to listen to what people are saying and work on their recommendations or complaints. This gives you a hint on what your customers want.
Most Ugandans deal in duplicating other people’s ideas and selling the products a cheaper price, this in the long run will ruin your market as people need original and durable products. Besides people will always go for the best products.