Enterprises can survive through entrepreneurship
Posted Tuesday, January 12 2016 at 02:00
Fluctuating and high interests, inflation rate and high exchange rate result in increased costs to small businesses. Therefore, Uganda enterprises need to improve by reducing unnecessary expenses. Uganda’s economic reforms put a lot of emphasis on macroeconomic stability and economic liberalisation with little attention to the growth of firms.
One of the challenges for enterprises is to ensure continued existence through value creation. Therefore, these enterprises need to be rescued before they go out of business.
In Uganda, no official study has been conducted to analyse the influence of start-up factors on economically viable enterprises. Much of the talk has been about eliminating barriers to would-be start-ups rather than focusing on factors that influence the growth of firms.
By focusing on the early-stage entrepreneurial activities, the Global Entrepreneurship Monitor gives an indication of a country’s entrepreneurial intensity. In Uganda, the entrepreneurial culture of establishing sustainable enterprises is poor. Due to high youth unemployment, entrepreneurship becomes a significant solution for micro, small and medium enterprises.
Comparing Uganda with other East African economies, the success rate of new enterprises is low in the country. This is attributed to lack entrepreneurial role models, few or no investment advisors, lack of entrepreneurial knowledge and lack of frankness, among others. That is why total early-stage entrepreneurial activities should be improved. How? Through business rescue.
Globally, growing an enterprise is a process which takes many years. This has been supported by numerous studies suggesting the following business startup process: idea formulation, opportunity recognition, pre-start planning and preparation, entry and post-entry development.
Uganda’s business rescue model suggests that if an enterprise faces monetary distress, and there is levelheaded justification of saving the firm, then a rescue plan should be drafted. The new business rescue model provides alternatives to liquidation.
The writer is a researcher and business rescue practitioner with interests in entrepreneurial economics. E-mail: firstname.lastname@example.org