Helping small businesses to survive, thrive in new markets

 “Small and medium enterprises (SMEs) have for long suffered from the high taxes imposed on them. This discourages many from starting because we have to pay for each product Shs500,000 hence discouraging many from starting up hence affecting the economy,” Nanette says.

 “If we could have a waiver not to be taxed probably for one year. I have had friends who have been discouraged by the taxing system of Uganda which they say is unfriendly and therefore end up moving into other countries such as Sudan to start up their businesses because of their friendlier taxation system and policy which highly impacts on sales and profitability,” she notes.  

 Citing an example where Uganda National Bureau of Standards (UNBS) tells SMEs to change a name. It is usually a challenge asking us not to use the word wine but rather call it alcoholic fermented beverage.

Rise of e-trade

 In this modern day and era, technology is easing trading through e- trade.

 The effect of Covid-19 and the subsequent lockdown as a measure to curb the spread of the pandemic opened people’s eyes on the benefit of trading online.

Digital platforms such as the “Virtual Factory Network (VFN)” created by MOTIV is meant to link cottage industries to resources needed to scale up SMEs.

 MOTIV uses its digital marketing space as a platform created to support these SMEs and provide them with the platform to enjoy vast trade opportunities, grow their businesses and acquire new skills.

 It provides a platform for SMEs to enjoy vast trade opportunities, grow their businesses and acquire new skills that enable them to increase their income and profitability. 

Virtual Factory Network

 Nicholas Spencer, the marketplace lead at MoTIV, says while Uganda cottage industry continues to make incredible socio-economic transformation as far as generating income for business, revenue for the government and creating employment opportunities to the youth, the sector continues to struggle with high operational costs, access to affordable credit facilities, cheap raw materials, and market to sell their products and services. 

 He notes that it is through Virtual Factory Network (VFN) that link entrepreneurs and cottage industries to resources needed to scale their businesses and diverse trade opportunities.

 These linkages range from suppliers of raw materials, financial institutions, market access and skills training in product development, branding and packaging. 

 “The VFN creates a circular system among various cottage industries to establish connectivity among them for easy access of trade opportunities, ventures building services, market platforms and business portfolios,” Spencer says.  

 In partnership with the Uganda Small Scale Industries Association (USSIA), the Virtual Factory Network (VFN) enables entrepreneurs to network with key sector players, acquire new skills to grow their businesses, and expand their markets beyond their locality.  

Creatives and entrepreneurs are trained within the Cottage Industries of textile, metal and woodwork, food and nutrition to support them. We believe that with the right support these creatives can build a vibrant cottage sector with the potential to absorb a large proportion of unemployed youth surplus labor, become catalysts for industrialisation and drastically transform the country’s economy,” he adds.   

 Furthermore, it will help creative entrepreneurs refine and scale their business to meet the demand for local and international markets through fostering collaboration by providing machinery, training, a marketplace, and a tribe of like-minded creatives to work towards socio-economic sustainability. 

Expanding your business

While sharing business growth and scaling tips, Denis Dokoria, head of marketing and communication, Uganda Industrial Research Institute (UIRI) said entrepreneurs need to connect with people to grow their businesses and expand networks.

 “When you come out to showcase your products, you are helped. Most of the ideas have been kept in silos. Building networks helps bridge the gaps. This helps SMEs come out from where they have been and tap into the international market that will drive the enterprise to a different level,” Dokoria added.

In addition, the government is working with various institutions to support SMEs through incubation to enable them access markets and validate the quality of products to meet international standards.

 He also cautioned SMEs about having a poor business mindset of copy & paste that makes most businesses collapse before celebrating their first birthdays.