Do not blow money as a young business

It is always good to let your business grow organically in Uganda. Avoid putting your business on steroids.  I now treat business like a baby. I let it take those baby steps but most importantly let it reflect the realities of every stage. 

For Ortega Group I do not even have an office. I decided it is not critical at this stage. That would be an unnecessary recurrent cost. You have to pay rent every month. You would just kill your business because rent will show up every month whether you want or not.  I have also learnt not to run a business in Uganda as though I am running one in Europe or the US. Why? Because it is extremely expensive to raise capital in Uganda. So you must be very cost conscious. 

When it came to employees, I simply contacted a number of people and said; ‘look if some project comes up, I may need your skill in this or that field. Will you be available?” Those are people I can engage with on a work basis. 

Since I am also largely pumping in my own retirement money, I know it is important to extend my runway as long as possible. From how I see it at this stage, the only person we can have on some retainer basis would be a Finance and Admin person. Somebody who will come in to put the books in order every month and maintain that trail. And then file taxes. Why? Because the costs of non-compliance are high here. Every authority is waiting for you not to comply and they slap you with a huge fine. 

The other thing is that we are not doing push marketing. The kind of business category we are in is one that thrives on pull marketing. So it is just important we develop a body of work. That means we have had to take on some projects pro-bono. And when I say we (it is mostly I). Those pro-bono projects become our body of work.

The fact is that business is never straight forward in Uganda, and we have made allowances for possible pivots down the road. And let’s say I run out of money, to raise the next would mean going to friends and family and those may require a stake in the business in exchange for the capital. Again, that is expensive to give away equity. The only other option is for the business to quickly bring in some revenue, acquire an asset then get a loan against those assets. 

But again, it is always best for the business to grow and fund itself. All external sources of capital are always expensive. As you grow slowly, you understand the different nuances to your business. Although I want the business to grow, I am not in a rush for that growth. 

I am very cost conscious. I often read people say things such as ‘if you show up on a boda boda, somebody will not trust you with their business.’ Again, that is if you have not built a body of work. That is when you would have to resort to appearances to try and convince people into giving you business. I personally do not want to get business because of appearance. I want to get business because you trust I will do the job and do it well. 
If you are a young business, be extremely cost conscious, avoid creating an illusion of the business. I know it is always good to tell friends ‘oh yes the business is doing well.’ Do not create those illusions. Spend most of your time working on your business. As much as possible, limit your time with the media (unless necessary). And early on, do a lot of barter trade, find other businesses where you can have synergies and share some costs. And as much as possible, do understand the business you are in. 

For example, in my business category, it is mainly a game of enterprise sales. You do not do enterprise sales the way you do normal sales. Enterprise sales take much longer. In enterprise sales, you do not want to chase, you want to attract. It is harder to attract, it means more work, more patience. 

And finally, I think it is important to avoid distractions. People will always approach you with different kinds of partnerships, quicker ways to breakthrough, but you must be so clear about what is important to your business in the short, mid-term and long-term. Learning to ruthlessly say ‘No’. 

I will try to share more updates as we go along. But that is currently my reality. My only big costs so far were on company registration and brand identity. The other costs- we are extremely careful on how we take them on. Be really careful when it comes to recurrent costs. Do not blow money as a young business in this country.

Ian Ortega is the CEO of a start-up