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Poor finance management will kill your startups - entrepreneurs told
Officials from the Uganda Registration Service Bureau (URSB) pose for a group photo with attendees of an entrepreneurship training in Kampala on September 2, 2024. PHOTO/BUSEIN SAMILU
What you need to know:
- The number of businesses closing due to debts and other management issues have drastically reduced over the years in Uganda.
Business developers and entrepreneurs have been urged to stop mishandling funds meant for businesses, if they are to develop and avoid un-ceremonial closure.
“You must know when to spend and on what because once you misuse the funds meant for business it will fail,” Uganda Registration Services Bureau (URSB) director in-charge of insolvency and receivership Robert Mugabe said on Monday at the opening of the weeklong training on skilling for business Growth and Sustainability in Kampala
He added: “Comply with laws and other requirements set up in Uganda. But also learn how to manage your finances by not confusing business money and other things. Financial access is also key as well as how you market your business.”
However, Mugabe noted that the number of businesses closing due to debts and other management issues have drastically reduced over the years in Uganda.
“We are not enthusiastic about closing businesses, but the numbers are reducing. There was a season between 2006 and 2012 when we had so many entities closing [but] that trend has been reduced. We are now building [and] keeping them alive,” he observed.
He added: “Those closing because of debts and other management issues are now five per year but those that have finished their tasks and closing voluntarily are still high because it is really business accomplished.”
Meanwhile, the ongoing 5-day business rescue and aftercare program training is aimed at ensuring that 150 participants, including company founders and entrepreneurs, are skilled so that they keep their businesses alive.
James Bulinzito, the chief executive officer of Elim Trust Eastern Uganda said that factors like inadequate entrepreneurial and business management skills, financial illiteracy, lack of basic corporate governance structures, unforeseen occurrences such as COVID-19 and the resultant public health measures, contribute a lot to high rate of failure in business thriving.
The 2016 Global Entrepreneurship Monitor (GEM) Report ranked Uganda among the world’s top entrepreneurial countries. It however, also showed that the rate of failure of businesses in Uganda was one of the highest in the world, stating that for every business that was started, another closed.
Mugabe now says URSB is taking steps to raise awareness and the level of appreciation of insolvency law and practice in Uganda.
“This includes equipping entrepreneurs with necessary skills to avoid business insolvency and the dangers associated with poor business management. The official receiver recognizes that in developing an efficient insolvency system, it is crucial to equip all actors to enable them deal decisively with issues that cause financial distress to business as well as individuals while supporting viable businesses to thrive in the economy,” he said.
