Many people are starting business without research, says researcher

Kampala. It is said that Ugandans have an extraordinary entrepreneurial appetite but many businesses do not live past their first birthday.

Ms Ketra Kintu, a senior officer ministry of trade in charge of quality and standardisation who was speaking during a research dissemination forum by BRAC Uganda, last week said that the choice of business is very important to ensure it thrives.

She said that many people startup businesses which are not based on research, but because of influence or perception.
“Some entrepreneurs start businesses which they have no knowledge about. There is no skill or reason to start the business but because your neighbour appears to be successful,” she said.

A competitive advantage of the business is key to ensure its prosperity. Entrepreneurs still invest in businesses that have many competitors and small market but fail to add value to their products.

She stressed the importance of business plans and the need for them to be reviewed. She highlighted limited use of technology which not only cuts costs but also improves efficiency and quality of products.

To grow your business in this era, Ms Kintu believes you need to go mobile because that is the future. Quick service delivery and a competitive edge accompany mobile businesses.

Ugandans, however, lack a savings culture and live beyond their means. In their study, they realised that most business people spend more than they earn from their businesses which limits their ability to save and reinvest.

Ms Kintu explains that businesses do not have enough quantities, thus failing to get high value business deals. Concerns of quantity are usually a manifestation of financial shortages which she also highlighted as a cause of the firms’ failure.

Additionally, wrong partners rock businesses. Ms Kintu advises entrepreneurs to partner up with someone who shares your goals, aspirations and exudes an appetite for success.

Access to fertilizer
Ms Benedetta Lerva, Doctoral student of Economics Stockholm University, whose focus was on credit constraints and how they affect investment decisions of entrepreneurs found that investment in productive capital is low among agricultural firms. But they want to invest.

The research focused on the Eastern region and found that firms with higher returns may not realise them because of credit constraints since they spend most of the money paying back loans.
It is important, Ms Lerva said, for government to choose the right policy tools such as subsidies or cash transfers to achieve growth potential.