ORGANISE YOUR SMALL BUSINESS YESTERDAY

A fortnight ago an organisation called the Inclusive Business Accelerator (IBA), which in a nutshell helps small businesses formalise their operations and make them more understandable and attractive to investors and potential partners.

IBA inaddition to make small businesses investor friendly link the up with potential investors.

The organisation, backed some traditional charitable organisations, highlighted a growing trend by aid agencies who in trying to have their monies have a broader impact on society are looking directly at the bottom of the pyramid.

Its a natural progression from offering a hungry man a fish to showing him how to fish, which is more sustainable and can be profitable for all involved.

"Uganda's status as the most entrepreneurial country in the world was recently reaffirmed by UK study. Unfortunately while we are good at starting up companies we are poor at growing them and ensure they endure over years.
The reason that this happens range from the strategic -- we have no long term plan for our businesses beyond providing subsistence for ourselves, to the tactical -- that our businesses are not organised enough to take advantage of opportunities available. The second is derived from the first...

Arguably since we have businesses sprouting up at every corner we have solved a critical part of the equation of how to build sustainable businesses. Our businesses then need handholders to help them transition from their small, informal beginnings to more viable entities.

And this does not apply only to the rolex guy around the corner or the small market stall owner. 

During a recent press event with Uganda Revenue Authority boss Doris Akol she said that the informal sector include law, accounting and consultancy services. This was a revelation because one would think these knowledgeable specialists would better appreciate the benefits of getting organised.

Of course one of the reasons of this reluctance is the high price of transitioning to formality -- the hustle of registration, new dues and regulations that come into play.

The difference between a company with organised accounts and one that doesn't is like night and day. The same can be said for one that is tax compliant compared to one that is not.

One of the challenges of making the transition is the unrealistic expectations people place on their business. Talk to any new business owner and they expect to have broken even within months and buying a VX within the year. Registering, paying taxes and meeting other regulations do not play into these expectations.

This an important discussion if only because it will give our small business not only a chance of survival but to grow into big companies. All big companies started as small companies.

It is also important because even in more developed economies it is small businesses that create the most jobs.
While organisations like IBA and similar outfits, may have it as one of their aims to make small businesses investor ready the long term benefit to businesses to getting organised is immeasurable. The ability to qualify for credit, the quality of tenders one can bid for  and the calibre of partners that will give one a second look are but a few of the benefits and make all the "pain" of formalising.

"But even for those who want to become immensely rich, they soon find out that informal practices only take you so far before they begin to sabotage the business. If you are racking in millions even billions on an informal structure know you can be making multiples more with a formal structure. And the longer you remain informal the costlier it will be when you are finally compelled to...

As Uganda has formalised over the last few years we have seen any number of businesses from supermarkets to manufacturers and even banks because their continued informal practices caught up with them.

The new movement of business incubators and  accelerators, which should eventually evolve into our own venture capital industry is one to watch and encourage.

Thankfully the early adopters are already coming through. Last week the start up online logistics company, Intership Uganda beat off eleven other local companies for a chance to pitch to foreign investors in Switzerland next year.

They won, i think, on the strength of their business model, providing logistics services via the web, but also because their model was better organised and they had realistic projections given their current operations.
So do you have a side hustle you are running-- you bake cookies or you have a chicken  project or even doing mushrooms in your garage, at the bare minimum have organised books of accounts. At the bare minimum you will be able to objectively determine what you are doing right and you do more of it or what you are doing wrong and not do it again.

LEARNINGS FROM EU IMMIGRATION WOES

In recent weeks thousands of immigrants have been streaming into the European Union. The recent upsurge has accentuated ongoing waves of Africans and east Europeans.

A civil war in Syria that has razed the middle eastern country to the ground is the trigger for the current explosion in immigrant numbers. That and the fact that many of it's richer neighbours are unwilling to take in even a single fleeing Arab.

Its impossible to detach the politics of it from the economics and speaks volumes to the issues of the blow back from colonialism and neocolonialism, governments' role in translating economic growth into development and the future reality of a centralised global government.

"No one wants to leave home. We are compelled to do so because we are insecure where we live for political or economic reasons.
Immigrants are a failure in the management of our society, more specifically the management of our economics....

The relentless flow of immigrants to Europe since the independence of many African states has as an underlying factor the global economic inequalities that have continued, even widened in the last half century.

The west by plundering Africa during colonialism and maintaining those exploitative systems after colonialism have grown rich on the continent's back.

The UN estimates that up to $1.4 trillion has flowed out of Africa illegally between 1980 and 2009. A lot of this money can be attributed by organised crime -- smuggling, drug and human trafficking but more than half of it, some estimate about 60 percent of it is due to multinationals through tax evasion and avoidance among other dodges. A system the west has cordoned but only now moving to minimise as it threatens their economies and politics.

The net effect of this is that the rich have grown richer and the poor have grown poorer. To the point that it is doubtful whether the word has the resources to sustain us all at the standard of living the west has grown accustomed to.

So its a simple equation there will always be motion from high pressure to low pressure areas, in this case from high economic stress areas to lower economic stress areas. The movement will be stopped when balance is attained. There are no shortcuts.

For this obviously two things have to happen.

One, the prodigious economic growth figures that many in the third world have been posting should be translated into meaningful improvements in general welfare. Secondly, that the developed nations severely cut back on their consumption to allow the third world catch up.

The first cannot happen without the second, which explains why poverty maybe here with us to stay.

That being said what needs to be done to ensure meaningful development for the third world?

To begin with there has to be a near universal appreciation among ourselves that we have all the resources -- human, natural resources and even capital to dig ourselves out of our predicament.

Across the border from us in the DRC the extent of their mineral wealth is estimated at $12trillion, at par with the US economy. And we haven't even started factoring the economic potential of its 70 million people.

The same can be said for Uganda where recent surveys have showed if we were to fully exploit our mineral wealth we would have to relocate everyone out of the country.

The trick to unlocking these embarrassing riches at our feet is to improve the quality of our human resource, through quality education and health care and to create a conducive environment for the private sector to thrive. 

And that doesn't mean living capitalism to run around unfettered, because the market is the most effective wealth creator we know its the worst distributor of wealth.

It is important that we tap into our well documented entrepreneurial abilities to harness the market for our benefit. All the aid in the world cannot do that for us.

"In fact aid has stalled rather than helped our progress. Getting aid is easier than building durable, transformative companies. In the last half century, billions of dollars have been pumped into Uganda but during the same period we have only a handful of companies with a national presence, nor do we have billion dollar companies....

A country is only as viable as its private sector. That is the more durable measure of development, with a string private sector your poverty issues will be sorted out, as will be your governance issues and therefore your service delivery issues.

The "crisis" the EU is facing has the same qualities as the rural-urban migration.

Its not an insurmountable challenge but a restructuring of the world economy -one way or another, will have to come first before things change.

There is a more apocalyptical vision but we will keep that for another day.