Today, Africa does not house the fastest growing economies because of the abundant natural resources that cover the soils we walk on, the hills our fathers cultivate or the oil, golds and other minerals that our lands bear. Africa is growing, rapidly because of the many StartUps that have become a trend, a culture in many of the communities today.
UGANDAN FACT: According to the Global Entrepreneurship Monitor (GEM), 28% of adults own or co-own a new business.
It’s estimated that Uganda, the beloved Pearl of Africa, has often been regarded as the land of entrepreneurs amidst the unfavorable bureaucracy, economic instability in the Forex markets, lack of funds, etc.
The Government can’t be the only reason to as why we go wrong in business, and here is why.
Globally SMEs (Small & Media Enterprises) are defined as non-subsidiary, independent firms which employ less than a given number of employees. This number varies across countries. The most frequent upper limit designating an SME is 250 employees.
The IFRS for SMEs defines Small and medium-sized entities are entities that: (a) do not have public accountability; and (b) publish general purpose financial statements for external users.
Both these definitions are just close to what a small/medium enterprises represents here in Uganda. Sole proprietorships and family run businesses dominate the business airwaves in sub-Saharan Africa.
The faulty is we have always seen SMEs as substance businesses to complement our lifestyles. A good number of us spend almost 80% of business turn over luxuries and forget to inject the money back into the business.
Mind the big picture: Disruptions have become a thing to embrace rather than worry about in business today. Would you consider signing your Taxi up on Uber/Taxify or seat down with your Son, a coding developer to build an app that enables passengers to book seats in a taxi? You have to think outside the box when doing business today! Also, think of a business idea that solves a global problem rather than a small community issue that is already serviced by 10 other businesses. A kiosk is not the only form of business you’re limited to!
The Big Business Mentality: Most of the times, finances (Start Up capital) constrain our abilities to think big. Businesses like Numida Technologies have made it their business to support SMEs by killing the bureaucratic banking order of accessing loans and introducing a “bookkeeping” algorithm that computes a low risk loan using daily records from a user. We need more of such disruptions to the normal inform of venture capitals & “Dragon Dean” investors.
Government has tried to meet entrepreneurs through the youth programmes, NAADs, Operation Wealth Creation but many are yet to access these funds. The government agencies responsible for distribution of these funds need to come up with mechanisms that promote business growth with ideas such as “patient money”
“Patient capital is another name for long term capital. With patient capital, the investor is willing to make a financial investment in a business with no expectation of turning a quick profit. Instead, the investor is willing to forgo an immediate return in anticipation of more substantial returns down the road”
We, Entrepreneurs need to work on our personas if we are to build lasting, self-sustaining businesses. Don’t just mind the bigger picture, be the “big business”, create value for your business by using your interpersonal skills.
Here are 6 things you need to be successful in business;
- Infrastructure that opens your business to markets (Road, Electricity, Internet)
- Funding: Cheap and patient money
- People: Talent that can build and relate to the business
- A culture of delayed gratification
- A strong system of business mentorship
- Build a philosophy.
Lastly, don’t be a survivalist entrepreneur, be a one that is ready to change the way Ugandans do business.
Join the Institute of Certified Public Accountants of Uganda on 9th – 10th November for free business advisory, tax, accounting and audit during the Accountancy Services Week. #AccountancyServicesUg #ProbonoServices #PromotingProfessionalismInAccountancy