Insights & Advice for Ugandan Entrepreneurs
We recently sat down with Ronald Mukasa, Business Development Manager at Enterprise Uganda, who shared insights on entrepreneurship, job creation and business success in Uganda.
It is often said that Uganda is the most entrepreneurial country in the world, yet many businesses do not make it past their first birthday. What unconventional entrepreneurship advice can you share with entrepreneurs?
It is a very good thing that Ugandans are entrepreneurial. A lot of Ugandans run a business or have side gigs in addition to full-time employment. On your business journey, failure is inevitable. It is however important to fail fast, learn lessons quickly and try again or move on to the next challenge. Learning about other entrepreneurs’ failures may also prove important. There is a lot of information on entrepreneurs who failed before becoming successful which is helpful. Preoccupy yourself with what is happening inside your business that is in your control as opposed to focusing on outside forces which you have little control over. Entrepreneurs operate in a tough environment but that tough environment contributes to producing entrepreneurs who build lasting businesses.
The Northern Uganda Youth Entrepreneurship Project (NUYEP) started in June 2013 with support from DFID Uganda in partnership with Youth Business International (YBI) and Enterprise Uganda. It aimed at supporting 10,500 youth aged 18-35 in Lango, Acholi, Karamoja, Teso and West Nile. How does entrepreneurship contribute to economic empowerment and livelihood improvement of women as well as rural communities in Uganda?
Entrepreneurship contributes greatly to the livelihood of people in rural areas, especially women and youth. It gives exit for those who have been unfortunate not to find a job, finish their education or trapped in poverty. Entrepreneurship provides an immediate option on what to do to make changes in one’s current circumstances. The purpose of entrepreneurship is to cultivate a mind-set on how to make the best of what you have and where you are. It challenges the individual to take control of their destiny even amidst difficult circumstances.
Photo credits: flickr user neiljs
Many Ugandan businesses incur debt for unplanned business expansions and unnecessary expenditures, resulting in cash flow challenges. What must businesses do in order to be successful and remain competitive?
Most times, bad debt is taken due to bad business decisions. An example is unplanned diversification into a new sector while placing the debt burden on the existing successful business. This inevitably forces a previously performing business to suffer and potentially deliver poor services to its customers. This often occurs when the lender is even unaware of this diversification, given that the entrepreneur has diverted funds meant for the existing business. Therefore, the discipline of the business owner is key if debt is to be obtained and managed wisely. Secondly, good record keeping and interpretation are vital to ensure that debt is acquired when needed and its performance is monitored efficiently. Businesses should ensure that debt is dedicated to business-related services and not lost in social obligations and unplanned diversification.
Rosemary Mutyabule, Director of Business Advisory Services at Enterprise Uganda facilitating a Financial Literacy exercise. Photo credits: Enterprise Uganda
A Forbes article published last year cited research by Kabbage Inc., indicating that mentors play a key role in teaching business owners about themselves and their business, yet few people have one. How important is mentorship for small business owners in Uganda?
Currently, the kind of mentorship available is informal in nature. Entrepreneurs are learning from the people who have walked those journeys and are being advised. Say you are starting to trade in shoes. Naturally, you will go to someone who has been trading in shoes for the last 10 years and ask them what you should do. They will then proceed to give you a few shoes to start with. However, the challenge with informal business mentorship is that sometimes, you can mentor people in the wrong direction. If my mentor for example, says you cannot pay taxes and succeed, such mentorship will convey the wrong message. Sometimes, it is helpful to have more formal structures. As an institution, we have attempted to work with mentors, people who are entrepreneurs and put them in touch with young people but in a more structured manner, so we can harness that energy which already exists.
Besides mentorship, entrepreneurs also need business counsellors – people who are technical and understand a given sector. The technical people on the other hand, have become even more relevant now. Entrepreneurs are looking for people who can show them how to keep records and file taxes. It is interesting what technology can do in this space. Flip, a Ugandan company, provides part-time workforce to businesses. If you want an accountant, you can pay Flip and they will send someone who will work for an hour a week. I think that’s exciting, and those are the kind of things we need to tap into. Quite honestly, every business person needs to appreciate that they need to learn from someone. With the advent of technology, people are getting mentorship online. There are stylists in this city who have learned their art from YouTube. I think that is a practical way to get things done.
However, more work is needed in the mentorship space with many young people still unable to find an appropriate mentor at a given stage in their business. It is important that mentorship and business counselling is embedded into all business development services to increase the availability of mentors to entrepreneurs who need them.
According to the 2012/2013 UBOS national household survey, 13% of the active labour force was affected by either time- or skill-related underemployment. What can the government do to boost SMEs’ ability to grow and create more decent jobs?
There have been various government initiatives. As Enterprise Uganda, we are also supported by the government and these initiatives are a good way to start. Whenever we talk about financing for SMEs, we often analyse it from the perspective of the entrepreneur needing capital, which I agree with. But it needs to be complimented with Business Development Services (BDS) so that if a young entrepreneur needs to get training or advice from a technical person, business professional or mentor, they are able to find it at an affordable rate. We need to make sure that entrepreneurs are getting the support they need and that support changes at every level. When a business is micro, they are looking to understand how to stay afloat. When a business is small, they are looking to understand how to formalise. When a business is mid-sized, they are looking to understand regulation and how to access regional and international markets. This process is continuous and we should have appropriate BDS at every level. Both the public and private sector can play a critical role in providing more BDS. Exciting initiatives from private financial institutions which are providing BDS services are a step in the right direction but more work needs to be done. A stronger collaboration between the government and private institutions could go a long way in improving the quality of Uganda’s SMEs through better BDS.
Photo credits: flickr user Bernard-Dupont
What are the major challenges a typical small business in Kampala faces? What stops them from growing?
There are challenges which one has as an entrepreneur inside the business (customer care, human resources, financial management, etc.) and challenges which are external such as tax administration, cost and access to finance, regulation, competition standards and certifications. These challenges influence the growth of a business. However, a business owner can influence challenges by understanding and accepting the responsibility of getting his/her house in order in spite of the business environment. As a business owner, internal challenges which you have control over should take precedence over external challenges, many of which are not in your immediate control. An entrepreneur should convert external challenges into growth opportunities. For example, if tax compliance comes with the benefit of becoming tax exempt, exploiting this knowledge in a market where most entrepreneurs choose not to be compliant may give you a competitive edge in your business sector.
What specific challenges do female entrepreneurs face?
Notwithstanding the many successful women entrepreneurs who have built excellent businesses, the gender question is still a big one in business. What businesses are for women and what businesses are for men? Should or shouldn’t women inherit land or businesses or even get a loan? Should the husband or the wife be the CEO? Those are big questions which are out there. Some of these questions still exist because the structure has not changed to open doors. Improvements in legal structure and cultural customs may prove helpful to create a more gender sensitive structure. However, beyond the structural challenges, the mind-set of both the men and women towards women in business needs to improve. Oftentimes when you talk to a young aspiring female entrepreneur, you will not find that her business idea is to set up a garage. Her business idea will be to set up a salon or a lifestyle brand. This gender bias exists in both women and men’s minds. One way this bias is being reversed is through successful women entrepreneurs who serve as role models for young girls by demonstrating that women can enter and succeed in previously male-dominated sectors. However, we need more such role models/mentors and we need to give them a platform to tell their stories. A woman who has made it in the construction industry should mentor young female engineers looking to enter that space. Secondly, I think that we need to start telling our girls at the household level that they can start businesses even in ‘male-dominated’ sectors like construction. The media can also contribute positively by casting light on the contribution of women in business, thus inspiring other young women to consider a career in business.
About Enterprise Uganda
Enterprise Uganda Foundation Limited is a public-private institution designed to support the government in realizing its objective of promoting the development of Small and Medium Scale Enterprises (SMEs) to become the main vehicle for expanding production, providing sustainable jobs and enhancing economic growth. The training carried out by Enterprise Uganda are aimed at providing the attendees with practical skills in Entrepreneurship and instilling a mindset of self drive and independence.
Ronald is a financial literacy coach, consultant, trainer and business development professional. He has provided business management, financial literacy and financial management training to corporate, government and non-governmental institutions in for the last six years. Ronald has also facilitated several team building sessions specialising in empowering teams to increase productivity and cohesion. Some of Ronald’s clients include DFCU, KCCA, UNRA, NEMA, MTN Uganda, SWICO, Nile Breweries, World Vision, UN Sacco and several other institutions.
Ronald is a certified public accountant (CPA)/FCCA and a lecturer at MAT Uganda. Ronald also holds a Master’s Degree in Development Management (London School of Economics and Political Science - LSE) and a Bachelors of Statistics (Makerere University).
Ronald is the Head of Learning, Innovation and Advocacy at Enterprise Uganda where he has worked for the last 9 years. Ronald is also the team leader of Geuka Africa Limited which focuses on empowering individuals and organisations to optimise their performance. Ronald has also worked as an auditor with PricewaterhouseCoopers Uganda. Ronald is passionate about empowering people to fulfil their potential and often trains young people in financial literacy, business and financial management skills on a volunteer basis.