Survival versus growth
Due to the current uncertain economic situation, the first priority for small business entrepreneurs is the survival of their businesses. Many firms in Uganda fail in the first 3 – 5 years due to economic challenges and bankruptcy. According to BUYINZA (2011), Compares to small and medium firms, large firms have got a higher chance of sevival in the market. However, Buyinza say that small firms keep in businsess operation even when they are not making profites but only survive to keep running due to some expectations of the entrepreneur. Some reasons that may keep the firm even when it does not make profits is because of their future prospects that the firm may be able to do well and earn them profites in the future. Also, the higher costs of starting up a new business may force the own not close the exsiting one though it may not be doing well.
These are individual behaviors or personal qualities that shape effective leaders. Leadership traits may vary from one person to another depending on personal preferences and goals. Leadership is more than just taking control of a situation. It’s also making sure you are in tune with situations, willing to help, guide discussions and be willing to go where others fear to tread. Discovering the importance of embodying leadership traits early in a career is important to help one advance. Developing emotional intelligence and confidence before leading people and processes is part of a leader`s job description signaled to others that are ready for these responsibilities. Leadership behaviour is a big determinant of the firm size and its survival and this will be discussed in details below.
There are many factors that make leaders to be special from one another and these are described in the following paragraphs.
Kremen and Block (1996), believe that resilience are just temporary setback that maybe faced by a leader but which can be solved any time. These leaders usually maintain a good and a positive attitude and a sense of opportunity during challenges. However, in Uganda this aspect of resilience is still lacking among some business owners who getup one day and decide to close their businesses due to challenges they face. Also, resilient leaders do not only care about themselves but also think about others because they are those other people who help in business success.
Business analysis is the discipline of recognizing business needs and findings solutions to various business problems. In simpler words, it is a set of tasks and techniques, which work as a connection between stakeholders (GREGORY, 2018). These help them understand organization’s structure, policies, and operations. They can also recommend solutions to help the business reach its goals especially in Uganda where business climate is not much stable. Business analysis is about understanding how the organization functions to fulfill its purposes.
Some of Uganda small business owners think they do not need a business analyst and this is one of the reasons their businesses have failed (Farhat, 2017). Small businesses are sometimes caught up in trying to survive and overlook a key element in their success. The business analyst can actually come in and determine what the small business owner can do to expand his or her business. If a small business is well analyzed and is followed up well, small business owners can benefit out of them just as large corporations.
According to Gregory (2018), A SWOT as a business analysis can be used for strategic planning tool so as to helps a business owner identify his or her own strengths and weaknesses, as well as any opportunities and threats that may exist in a specific business situation. A SWOT analysis is most commonly used as part of a marketing plan especially among large firms all over Africa, but many small businesses do not use it which have made these businesses collapse in the first five years of their opening (Ministry of Finance, 2008).
When conducted thoroughly, a SWOT analysis can uncover a wealth of information and can be useful in a number of situations. This article will walk you through how to conduct a SWOT analysis and provide some tips that will help you use the tool effectively.
Below is the example of SWOT business analysis from of Uganda`s biomass small business.
Case study: Bukomelo biomass company
At Bukomelo company as a case study for small business, biomass has gained popularity due to its significant role as a key renewable energy in the global energy mix. Extracted or generated from agricultural waste, forestry, and biogenic waste, biomass offer a wide range of fuels. The improving economics of energy production of biomass have radically improved its uptake as a potential fuel amongst several users with in the region and in Uganda at large. However, these find it hard to expand their business due to several factors, which, include owners` responsibility, and the government factors that do not give then a chance to reach out to new areas.
Uganda SWOT Analysis for biomass production
New source of income
New markets (for dig estate)
Increasing heat costs by customers
Substitute mineral fertilizer
Low payback time
Upcoming dependencies (substrate supply)
Lack of labor
Inefficient operation from the side of Hydro Electric Power.
Lack of knowledge from competitors
Finding new markets
Declining costs of producing bio mass
Increasing biomass costs
Power sector reforms may under emphasize
Case study of Nansana milling store.
Like many other Ugandan enterprises, Nansana milling store is missing out on the opportunities in larger markets because their packaging doesn’t meet international standards. In order for Ugandan processed floor or other products to be competitive nationally, regionally and globally, the packaging has got to be of a good quality.
Currently, there are about seven companies involved in producing packaging materials among which is Riley Packaging in Mukono, Afroplast Enterprises Ltd in Luzira, General Molding in Industrial Area, Rwenzori Bottling company. However, most of them deal in general plastics using the blowing technology. Packaging at Nansana milling store is more important though business owners do not take it as a priority. It is this package that will attract many customers, and it will help to keep the products for a long period of time. For example, Many of the floor that they pack in the local sacks can not be kept for a long time because when put in a cool place, the floor will soon get spoilt.
Business owners need to always to analyze their business performances so as to identify where to improve and where need a change. Instead of selling maize floor only year per year, these could thing of adding more value onto the floor to produce other commodities out of it, which may lead to expansion of their business.
PRACTICAL ACTION AGAINST BUSINESS FAILURE
There are many questions that Ugandans in small business sector ask themselves some of which include weather business failure be prevented. Some people think achieving business success is purely good luck. Its true there is an element of luck or blessings but a lot of success comes to putting in place measures and controls to prevent failure in the first place and then one can go ahead to achieve strategies that help to succeed. Below, I will discuss what factors have successful businesses have that troubled businesses don’t.
The way businesses in some parts of Africa with their well organization has been admired by Uganda`s small business. These need to change in two ways; enthusiasm for the future and making things better, and an openness and willingness to change in order to achieve that end.
For a sustainable business to prevail, a number of factors must be considered and put into action to avoid setbacks and government hold of the business due to luck of some certain documents that allow its operation.
Many entrepreneurs are technical experts in what they do but start a business without any formal training or experience in management practices and principles. By “management” here we mean the business of successfully managing the non-technical side of the business, the “back room” activities. As a result of inadequate management, many small businesses fail in the early years. They fail not because of a weakness in the product or service concept they have, but because the business was not properly managed in the back office.
Once a business has emerged or grown to a certain level, management techniques must change or the business will run into trouble. For many small businesses this level is $1-3 million in annual sales or 5-15 employees. Sometimes the critical point is smaller and sometimes it is larger, however, when it occurs, the owner or manager of a small business must evolve, morph or otherwise change from a manager of things to a manager of people and from a technical expert to a strategic thinker.
This is often a difficult task because of ingrained habits developed over time but failure to grow as a manager is a major, perhaps the major reason why a business will falter, stagnate or even collapse under its own weight.
But what do successful businesses have that troubled businesses don’t?
WAYS TO ENABLE A SUSTAINABLE AND SUCCESSFUL BUSINESS
Uganda small firms have not created enough jobs to absorb more citizens into its workforce, and the government has not endeavored to address this issue trough creation of enough employment opportunities. Small businesses are many in number but due to their small sixe, they can’t take in more workers (Sebikari, 2014). Also, due to their low organization, since many of them end up closing in the first few years opening, this leave more people unemployed, low government tax base, and their owners with no backup.
Many scholars in Uganda have suggested that costs of accessing initial capital remains and entrepreneurial capacity are still very low in the country. Creating small businesses could be one of the options that maybe opted for in order to increase on the employment levels fir the citizens. However, if their ways of operation and sustainability are not considered right before their opening, these could sink in their own boat.
The question of how to increase entrepreneurial performance among small business enterprises in Uganda should to be investigated so as to increase on their sustainability.
Organizational structure before starting up a small business
Access to market
• Return on investment
• Market share
• Sales growth
Government policy Information & experience Business structure Core competency
The figure above show how starting businesses should be organized so as to avoid their setback or any cause of their collapse. Firstly, entrepreneurs should set enough capital aside before start and this will determine their size ie, the more the amount of capital, the bigger the business. Businesses especially small ones should located close to their marked so as to enable their customers access them easily. If the business if way from its markets, it instead increases its production rates since it will have to incur some costs of transport.