A mobile money kiosk in Kampala. PHOTO BY ABUBAKER LUBOWA
According to the Uganda Bureau of Statistics (UBOS), the average monthly income for a Ugandan household typically falls within a range of Shs1 million to Shs1.5 million, although this can vary depending on urban or rural settings, occupation, and economic conditions.
However, with inflation rates affecting essential commodities such as food, transport, and utilities, a significant portion of this income is spent on daily necessities. For instance, the price of food, transport and housing, highlights the growing challenge of maintaining disposable income for savings or investments.
In today’s challenging economic environment, accumulating enough capital to start a business can be daunting. But suppose you manage to save Shs5 million—an amount earned through hard work and careful planning. The question is: What viable business can you start with this limited capital in a volatile economy?
When dealing with such hard-earned savings, caution is key. Most people prefer low-risk investments that can generate steady monthly returns to supplement their income.
However, finding a business opportunity that meets these criteria can be difficult in an unpredictable economic landscape.
While business coaches emphasize that success depends on various factors, we reached out to members of the public to gather their perspectives on what they believe could thrive as a viable business in this context.
Poultry
Ms Grace Nakalembe, a retail shop owner in Kampala, believes starting a small-scale poultry farm is a viable option for anyone with Shs5 million.
“With Shs5 million, you can buy about 200-day-old chicks, construct a basic structure, and purchase feed for the first few months,” Nakalembe explains. “Poultry farming has a relatively quick turnaround, as broilers can be ready for sale in six to eight weeks.”
Fred Kagenyi works on a poultry farm. PHOTO/ FILE
However, she warns that poultry farming is not without its challenges.
“Diseases such as Newcastle disease can wipe out an entire flock if you are not careful. Vaccination, proper hygiene, and a steady supply of quality feed are crucial. You also need to establish a reliable market to ensure consistent sales,” she advises.
Printing and typesetting
On the other hand, Patrick Mugisha, a recent university graduate, suggests a service-oriented business such as freelance printing and typesetting, especially in areas around educational institutions.
“With Shs5 million, I would buy a second-hand printer, a computer, and some stationery. Students constantly need to print and type coursework. This service can generate a steady income, especially during the academic season,” says Mugisha.
He highlights the low-risk nature of the business but notes that the challenge lies in competition.
“You need to offer competitive pricing and excellent customer service to stand out from the numerous other print shops,” he adds.
Mr Ronald Mukasa, a business coach emphasizes the importance of managing working capital when starting a business with limited funds.
“One common mistake young entrepreneurs make is tying up too much money in fixed assets. For instance, someone might buy a machine worth Shs4.5 million and forget that they still need funds for operational expenses such as marketing, stock replenishment, and day-to-day running costs,” Mr Mukasa explains.
He advises entrepreneurs to look for businesses that require minimal capital investment in fixed assets and instead focus on ventures that leverage existing skills or resources.
Low hanging fruits
Mr Mukasa also stresses the importance of starting with “low-hanging fruits” — businesses that address immediate needs in the community.
“If you live near a university, a small eatery selling affordable meals like rolex or snacks can be profitable. Students are always looking for affordable food options. Similarly, if you have a skill, such as baking or tailoring, consider starting a business around that skill,” he suggests.
Additionally, he encourages entrepreneurs to make use of dormant assets.
“If you have an unused room or garage at home, convert it into a workspace instead of renting a separate space. This allows you to channel more of your funds into the business itself rather than operational costs,” he advises.
Other viable business ideas
While it is difficult to pinpoint a one-size-fits-all solution, experts recommend the following business ideas for individuals with Shs5 million.
Mobile money, airtime business
With the increasing demand for mobile financial services, setting up a mobile money kiosk can be a lucrative venture.
“Five million shillings is sufficient to acquire a licence, set up a kiosk, and maintain a cash float,” Mr Ronald Mayanja Omugalanda explains.
“The key to success is location. You need to be in a high-traffic area where people frequently send and receive money.”
Second-hand clothing
The second-hand clothing business, locally known as "bend down boutique," remains a popular choice in Uganda.
“With Shs5 million, you can purchase a bale of quality second-hand clothes, rent a small space in a busy market, and start selling. Fashion is always in demand, and with good customer service, you can build a loyal customer base,” Nakalembe suggests further.
Agribusiness
Agriculture remains a cornerstone of Uganda’s economy, and small-scale farming can be a profitable venture.
“You can invest in mushroom farming, which has low start-up costs and high returns,” says Mugisha.
“With proper training and market research, you can sell your produce to supermarkets and restaurants.”
Risks and challenges
While the profit potential is enticing, starting a business with limited capital comes with inherent risks:
Market saturation
Many of the suggested businesses, such as poultry farming and mobile money kiosks, are already saturated in urban areas. Standing out requires a unique selling proposition.
Operational challenges
Poor cash flow management, inadequate customer service, and lack of marketing can quickly derail a small business.
Economic volatility
Uganda’s economy is subject to inflation and currency fluctuations, which can affect the cost of raw materials and reduce profit margins.
Starting a business with Shs5 million is possible, but success depends on careful planning, leveraging existing skills, and managing risks effectively.
“Do not rush into a business just because it is popular. Conduct thorough research, understand the market needs, and ensure you have enough working capital to sustain operations,” Mr Mukasa concludes.
Manage working capital
Mr Ronald Mukasa, a business coach emphasizes the importance of managing working capital when starting a business with limited funds.
“One common mistake young entrepreneurs make is tying up too much money in fixed assets. For instance, someone might buy a machine worth Shs4.5 million and forget that they still need funds for operational expenses such as marketing, stock replenishment, and day-to-day running costs,” Mr Mukasa explains.
He advises entrepreneurs to look for businesses that require minimal capital investment in fixed assets and instead focus on ventures that leverage existing skills or resources.
The journey to entrepreneurship requires resilience, adaptability, and a willingness to learn from both successes and failures. With the right mindset and approach, Shs5 million can be the seed capital for a thriving business in Uganda’s dynamic economy.
