About 99 per cent of local business that survive up to 10 years would have done so after involuntarily changing ownership multiple times.
Also, up to 90 per cent of businesses that make it up to their fifth birthday would have at least collapsed once along the way or at the very least, changed hands from the original owner to another.
According to Mr Charles Ocicici, a business coach, although the statistics seems disturbing, the good news is that Ugandans is still one of the most enterprising countries in the world.
This is why although 80 per cent of the startups don’t mark their first anniversary, Ugandans always remain enthusiastic and are ready to work.
He says: “But what leads to rampant enterprise failure rates in Uganda yet capital is always available?”
Dr Maggie Kigozi, a director at Crown Beverages, said capital is not enough. One can do something they admire and have a passion for. With passion, you are likely to succeed.
“Capital is not everything. You can put it in and lose it tomorrow. If you have a passion, start slowly and grow,” she said.
According to Mr Ocici, it is very dangerous for any entrepreneur to believe that starting a business is just about having the money.
“If you reduce capital to money, then that enterprise will have challenges in taking off; National Social Security Fund [NSSF] tells us that 72 per cent of the beneficiaries waste their money and go broke in two years. That is close to a typical business in Uganda,” he said.
Mr Ocici said, “Business is not all about capital or handouts but it is a package of many other resources put together to deliver a solution. That is the first mistake we make,” he said.
He explains that other things that fail businesses include wanting to have too sophisticated ideas from the others; we tend to come up with ideas because they are cool and trendy.
Tips before starting business
Mr Ocici advises that before one goes into a business, they should understand the concept do not go into something because it’s exciting or exquisite but it should be easily understandable; avoid sophisticated things.
“Also consider things that generate interest in you; that connection will make it a worthwhile journey even if it’s tough; interest is very key,” he said.
It is advisable to start an enterprise in which you have a talent or hobby. However, the idea should not take too long to bring in some money.
“Given the resources you have, the business are you going to invest in should bring back your money. Do not go into a business where you inject your money and when the business is three-quarters away, you still need a quarter of the resources,” he said.
For instance, when you going into a welding business, you will need a venue, source of electricity, machines.
You need to have an investment where the money you have can allow your business to go through a complete cycle. For instance, if you have five acres of land and the money you have can’t buy the seeds, weed harvest, dry and transport to the market, experts advise that you start with two acres where the money can cater for the whole process.
“Adequacy of the resources to take the business from zero to until you can serve a customer and get money back. If you get that right, your business will work,” he said.
After getting the idea right, many business ideas fail to take place. Once you get the idea, the final formula to make that idea succeed is mastering the success factors of the business you have chosen.
Every entrepreneur must understand the success factors of their game, for instance, if you are going into produce, you must purchase the crop when the prices are at their lowest.
Seek for information
“Visit business clinics, Uganda Investment Authority, PSFU, Enterprise Uganda , MUBS have clinics you can put in some money and it will be worth your investment.They teach how to have a vision, make a business plan, marketing, customer care all this is learnt before going into business.”
To understand the success factors in business, experts’ advise that one needs to talk to those in that business because it is believed they have some experience.
Dr Kigozi advises that starters should avoid online searches because answers could be from distant countries and not relate to Uganda.
What you should know
1. Realise entrepreneurship is a marathon.
2. Ensure there is a demand for your product or service.
3. Know you won’t get it right the first time.
4. Be patient and make sure you have adequate funding.
5. Forget about what you want to sell.
6. Be prepared to pivot.
7. Listen to your customers.
8. Solve a problem.
Source: The Entrepreneur