Chapter 2 Businesses in Uganda

Introduction

In this chapter, you are going to explore the different types of businesses in Uganda. This will enable you to participate in business operations in Uganda. Different people in your communities deal in different business activities through which they earn a living.

What kind of business activity does your family do? How does that activity benefit the community in which you live? Entrepreneurs, through creativity and innovation, establish many businesses in order to solve community problems and for their own benefit.

However, any established business can succeed or fail. In this chapter, therefore, you will explore why businesses succeed or fail.

2.1: Types of Businesses

Keywords

• business
• community
• resource
• product
• agri-business
• manufacturing
• service
• trade

At the end of this chapter, you should be able to:

(a) understand the various types of business in Uganda.

(b) appreciate the importance of businesses to the community.

(c) determine the factors leading to success in business and causes of failure in businesses.

Meaning of Business

You have witnessed people participating in different activities from which they produce goods and services for exchange. Such activities are regarded as businesses.

A business therefore, is an activity through which one earns a living or makes money, by producing or buying and selling products (such as goods and services).

Examples of businesses include; growing and selling vegetables like tomatoes, providing medical services, running a supermarket, baking cakes and many others. The four types of business are illustrated in the flow chart below;

Activity 2.1.1

Understanding innovation

In pairs, study the pictures in the case study below to answer the questions that follow;

Case study

In Nansana town, people carry out different businesses as shown in the figures A, B, C, and D above.

Task:

1. Identify the types of business taking place in figures A to D.

2. Define each type of business identified.

3. What type of business would you wish to start? Support your answer.

4. Use ICT or library research and find out the characteristics of each type of business.

You have learnt that there are different types of businesses carried out in Uganda. Businesses can either be on large scale or small-scale. Some of them are managed by one person, others by a group of people.

Importance of Business

What would happen if there were no businesses? Without businesses to secure our needs and wants, we would live in a constant state of want.

Activity 2.1.2

Discovering the importance of doing business

In groups, read the case study below to answer the questions that follow; Mary is a married woman with children. She operates a bakery which is doing well in Kasese, Uganda. She buys wheat flour, milk and other essentials from a nearby shop for baking. She later boards a taxi to supply to different people in the district.

Identify the benefits of her business to:

1. The owner (Mary).

2. The local government.

3. The people of Kasese and other parts of the country.

Businesses are created by entrepreneurs in communities to solve the most pressing problems by taking them on as opportunities, and in turn earn profits.

2.2:Success in Business

Keywords

success market profit recognition

By the end of this sub topic, you should be able to:

(a) know what makes a business successful

(b) evaluate what causes a business to fail

(c) understand ways of reviving a falling business

Success is much more than riches, power or fame. It is simply the feeling of satisfaction and happiness one gets from leading a particular way of life or carrying out a particular activity. Can that be termed as a success?

What do you call success in your daily life? For example, if you get good grades, a well-paying job and a good partner in future, do you consider yourself to be successful? In business though, success can be measured by high profits, increased amount of output or even big sales. However, many times businesses fail within their first year of operation as will be discussed in this chapter.

Success in Business

A successful business is one that provides all shareholders with benefits or value in one form or another, and has a clear vision.

Activity 2.2.1

Exploring the meaning of “success” in business As an individual,

1. Write a short story about a successful business you know in your community.

2. Share your story with the rest of the class.

3. Identify factors that brought about success to the businesses in the different stories.

4. Agree on the meaning of success.

One becomes successful each time he/she takes a step towards achieving a goal, objective or target. Similarly, a business can be said to be successful if it is expanding its market share and increasing its profits hence achieving its goals.

Activity 2.2.2

Identifying indicators of a successful business

In groups, read the story below and do the task that follows;

The Inspiring Story of Annette, the Supermum Entrepreneur from Uganda Annette is a parent of two children, and versatile entrepreneur, who has defied the odds to achieve amazing success in businesses that are traditionally associated with men.

Annette wakes up every day at 2am to start her first business of the day. She sells well-packaged spiced tea at major spots in Kampala, the Ugandan capital. In the afternoon and early evening, she switches over to her other business; cleaning shoes for office workers and corporate clients.

Through these businesses, she has bought four vehicles to serve her expanding customer base. Amazing! For her hard work, Annette banks 400,000 Ugandan Shillings (about $115) in profits every day. Yes, every day! Sometimes, it’s amazing what you can achieve, and how big you can grow by starting small.

Annette started her entrepreneurial journey with only 30,000 Ugandan Shillings ($9), and her sacrifices are really paying off. If this parent of two can defy stereotypes and achieve success despite the odds, what excuse do you really have? Don’t forget, the secret is to dream big, but start small. There is always joy and fulfillment in humble beginnings. By John-Paul Lwuoha/ November 11th, 2015

Source: https://www.smallstarter.com/

Task:

1. Identify the indicators of success for her business.

2. Describe the factors that could have made the business successful.

3. Present your work to the rest of class. To succeed in business today, you need to be flexible and have good planning and organisational skills.

Business Failure

Due to the high level of uncertainty regarding the outcome of entrepreneurial activities, business failure is a common outcome of the entrepreneurial process.

The positive side of business failure is that failed entrepreneurs can use their previous When entrepreneurs fail, they experience both the positive and negative consequences. experience to build a foundation for future success. new knowledge and skills and motivate failed entrepreneurs to look for other solutions

For example, a business failure can be a learning opportunity for acquiring that can be applied to revive their businesses.

Activity 2.2.3

Finding out why businesses fail

In groups read the case study below and review the task that follows;

Nyakato is a businesswoman in Nakawa. She started a supermarket because her twin sister Nyangoma was doing the same business. She lacked commitment. On several occasions, Nyakato would just pick items from the supermarket to visit her relatives. After a year, shelves in the supermarket were empty and she was unable to stock. She consulted the sister for financial assistance who told her the mistakes she did and Nyakato promised to improve.

Activity 2.2.4

Understanding the causes of failure in business

In groups,

1. Visit the nearby trading centre and find out some of the unsuccessful businesses.

2. With examples, explain why you consider those businesses unsuccessful.

3. Explain the causes of failure in these businesses.

4. Discuss these measures that can be taken to revive a failing business.

5. Share your findings in class.

Businesses do not fail in one day. Instead, in many cases, there is a gradual decline. Business owners may not detect failure early enough especially when monitoring of operations is not enough.

How to Revive a Falling Business

People start businesses with high expectations for success, but after doing some things wrong, they end up collapsing. Here are some measures that can be taken to save your collapsing business and also help it thrive;

Ensure good customer care

Be creative and innovative

Follow the laws in business

Expand your market Don’t Lose Your Passion.

Use modern technology

To sustain a forest, don’t cut more trees than what you plant. A tree is healthy when the roots are strong and big enough to provide water for all the branches. Likewise, your business will be healthy when the income is big enough to support your expenses.

To sustain your business, don’t take out more money than what it has to regenerate. If nobody needs what you try to sell, you are in trouble. The right quality and price is also important.

Chapter Summary

In this chapter, you have learnt about the various types of business include manufacturing, agri-business, service and trading business of doing businesses in the community, factors leading to success indicators of success in business and ways to revive a failing business