10 mistakes to avoid when starting up a business in Uganda.
Are you an entrepreneur planning to start up a business, here are some pitfalls that you must avoid when starting up a business.
Mistake 1. Doing What You Love
“Do what you love” is a piece of business advice that’s been given for centuries. But for many people, this is a big business mistake.
The reality is that you may not be skilled in what you love and there are a whole lot of people out there who love things they’re not good at.
The person who thinks she’s a great cook so she should start up a hotel is at a big risk.
The advice I would like to give is to do what you are good at and what people will pay the money for not what you love.
I am not saying that you should not love what you do, but put your skills and abilities before your emotions of love.
Customers like quality services, not emotional services. If you love something and you are skilled as well, go ahead and start the business.
Mistake 2. Starting a business with little capital
Capital is the blood that flows in the business body. Inadequate capital can prematurely end a startup business.
Most businesses in their startup phases require adequate capital to operate efficiently.
This should have been number one of the 10 mistakes to avoid when starting up a business in Uganda.
Before starting up your business, look in your business plan for the amount of money allocated to successfully startup your business.
Raise that capital first and then startup your business.
Don’t make the mistake of starting up your business with little capital. You will choke it to death when your capital runs out midway.
Instead, collect all the required funds prior to starting your business.
Remember lack of money is among the top two causes of business failure. Get money before starting your business. [Read Related Article; How to raise startup capital for your business in Uganda]
Mistake 3. Expecting no failure in your business
It is not bad to expect success in your business. But you have to accept the reality that a business is not a bed of roses.
Up and downs will always exist in your business. Even if you are too optimistic, you have to accept that things go wrong sometimes.
As a business owner, it is advisable and good that you become flexible and open-minded in your business.
You will sometimes have to make tough decisions for the sake of your business and you have to be perfectly okay with it.
For example, it will sometimes take months and even years before you make real sales in your business.
If you are faint-hearted like many other startup entrepreneurs, you may end up closing down your business, but if you are open-minded and patient, your business will surely grow from these low sales periods and start making substantial profits.
Mistake 4. Doing it all yourself
As the saying goes that “No man is an island”, it is true even for business. One of the most common mistakes all new business owners in Uganda make is to run their businesses solely.
Now get me right on this, there are so many businesses that require only a single person to operate.
If you are starting up this type of business, it is perfectly okay to run your business yourself, however, if your business supports more than 3 people to work in it and yet you are working in it singly, you are putting your business in danger.
We are all skilled in different fields, I may be a good manager but not a salesman, and I may be good at marketing but not good at product delivery.
So for the efficiency of your business, it is advisable to place the right people in their required positions and your business will thrive efficiently.
You too as a business owner, will get time to think about other ways how you can improve your business further.
Mistake 5. Recruiting the wrong people in your business
A business is not a family get-together. As a business owner, you need to be very strict and ruthless in the recruitment of the staff that will work in your business.
Most business owners in Uganda have recruited their brothers and sisters and wives and children to work in their businesses irrespective of their professionalism.
This surely is one of the 10 mistakes to avoid when starting up a business in Uganda.
Now how do you expect the success of your business from the unqualified staff you hired? Remember one thing, your business is as only as successful as your employees.
If your business is still struggling many years after it started, you may need to start looking into your staff, that’s where the problem is emerging mostly.
Mistake 6. Misuse of business money
Business money is not personal money. Many Ugandan business owners struggle with the one challenge of mixing business money with their own personal money.
Even if you are the owner of the business if you truly want your business to grow rapidly, start separating the business money from your own personal money. [Read Related Article: What do the rich know that you don’t]
Mixing business money with your own personal money may prompt you to spend it since you may take it to be personal money.
Reckless giving away money to friends, and family or even buying goods for personal use from business money is a very big mistake.
Most businesses continue to succumb to failure due to poor management of their money. So start today to separate your personal money from business money.
Spend business money only on business work, not anything else.
If you feel tempted to spend the business money, remember this; A single coin taken out of your business is equal to a million lost since your business has the potential to turn that coin into a million.
So would you lose a million now when it is still a coin or wait until it becomes a million?
Mistake 7. Patterning with the wrong people
A business partnership according to Investopedia is a formal arrangement by two or more parties to manage and operate a business and share its profits.
Business partnerships are good when starting up a business especially if you have less startup capital to start the business alone, or you have little skills to start the business alone.
A business partner can make or break the business. If you are with the wrong partner, he or she may start wasting the business funds on his own plans since he has equal rights in the business as you do.
Having this type of partner can bring more harm to your business.
So before starting up your business, first make study the person you want to partner with and see their qualities and if he is the right person to partner with.
If you are the wrong partner, please adjust for the wellness of your business.
Mistake 8. Not Doing Any Market Research
Most business owners here in Uganda don’t bother to make research on the business they want to start prior to starting them.
This is so fatal because 80% of such businesses that have been started in such a way have collapsed with all the money and time invested in them by the business owners.
Don’t be one of them too. Before you start any business, carry out research for the market of your products.
The first lookout is to see if there is enough market for what you want to start up before investing large sums of money starting up that business.
If you don’t, you have no idea if people are even going to want to buy them. You may think you are the best hairstylist in Uganda. But does anyone else?
Mistake 9. Not looking at your personal strength and weakness
No man is an island. We all have strengths and weaknesses and they follow us all the way to our businesses.
Most business owners, unfortunately, are ignorant of their strengths and weaknesses and start up businesses without giving a thought about their own power.
For example, if you are the type of person who likes moving from place to place in a single day and you do not like settling in one place for more than two hours, a retail business may not be for you since it requires people who will be in one place for a long time.
This, however, doesn’t mean that you can’t start up a retail business, rather you need to hire a worker who will sit in your retail business while you travel or you can start up a business that suits your personality for example in accordance with our above example, you can become a tourist guide or you can invest in the transportation sector of business.
Mistake 10. Failure to pivot
Most successful people in Uganda today have done more than one job and business.
It is not to their liking that they keep changing businesses, but rather it is the environment in which they live that forces them to change businesses.
Most business owners in Uganda here, however, are madly in love with their business ideas that they are not willing to take a critical look at their ideas and the rate of their success and the market demand for those products.
As you are running businesses, there will come a time when the business that was once profitable isn’t anymore.
At this time you need to pivot and change to another business that is profitable at that time.
This is not easy and it takes a lot of courage and belief to do this but is so necessary because businesses evolve with the desires of the people.
Don’t rigidly stay in one business simply because you love it No, as entrepreneurs we look for money, not love.
If your customers adjust to new products, you will lag behind your competitors.
Your Turn…
Here we come to the end of the 10 mistakes to avoid when starting up a business in Uganda.
What point has touched you most? put it down in the comments below.
Capital management
Time for business
Business money