Business is not for the faint hearted

A trader points at some bags for sale during the Annual Trade Fair at Uganda Manufacturers’ Association show ground last year. Entrepreneurs who make money must be patient for three to five years before they can start enjoying the money. PHOTO BY ERONIE KAMUKAMA

What you need to know:

  • Businesses sometimes deal with unknown unknowns. In July 2018, many businesses that relied on mobile money either shut down or got badly injured. All it took were just four weeks of ‘madness’ by people in government and parliament who experimented with the mobile money tax.

Many years ago, I visited the Uganda Manufacturers’ Association Trade Fair in Kampala together with a family member. We were soon attracted to a demonstration of a salad making machine. The machine made slicing cabbages so effortless and we promptly bought it. On reaching home, we discovered that making salads using the machine needed more effort than using a knife.
Like the salad making machine, the life of an entrepreneur can appear very charming, perhaps with a lot of money and time to spend. The reality is that entrepreneurs face different risks and they need a strong heart to succeed.

Financial risk
It is said that 80 per cent of businesses in Uganda do not last beyond two years. When a business fails, the entrepreneur in most cases loses the money invested in the start-up. Even if the business succeeds, it will very likely tie up cash until the third or fourth year.
The number of entrepreneurs who make money is less than the number of those who lose money. The ones who make money must be patient for three to five years before they can start enjoying the money.

‘Wheelbarrow’ effect
Many small businesses are run like a job of the owner. It is like a wheelbarrow; it can only move forward when pushed. There are many factors that make entrepreneurs to behave like wheelbarrow pushers. These include unfaithful staff and suppliers, ignorance about systems and entrepreneurs who like to control no matter what.
The wheelbarrow business eventually becomes a big burden to the entrepreneur and cannot grow beyond the skills and other abilities of the owner. When a business does not grow or create new products, it will be pushed off the road by stronger competitors.

Interruption
Businesses sometimes deal with unknown unknowns. In July 2018, many businesses that relied on mobile money either shut down or got badly injured. All it took were just four weeks of ‘madness’ by people in government and parliament who experimented with the mobile money tax.
Prolonged interruptions and massive disruptions are difficult for businesses to overcome.

James Abola is a business and finance consultant.