Business

The East African Common Market Starts.

We have 5 days off the month of July and four days into the East African Common Market yet the success of this merger is still regarded conspicuously within some circles of society especially the urban elite.  The common market between Uganda, Kenya Tanzania, Burundi and Rwanda ensures the free flow of goods, services and labour. It will also allow for capital transfer and establishment of residences across borders with fewer barriers. Is this the solution to problems in the religion? Will the nationals benefit and will they be able to consolidate their gains? I believe the people’s concerns are genuine.   

Although this system requires “enough” time to effectively fall in place, the onus is on the leaders of these countries who should ensure a free and fair sphere of operation if the common market is to achieve the desired goals. Particularly, the aspects of corruption, freedom of speech and association, political pluralism, the rule of law and the championing of human rights among others. How are these countries fairing in all the mentioned areas?  We are currently experiencing the rise of dictatorship in Uganda and Rwanda with governments in these countries gradually losing their legitimacy. It’s only Tanzania that is displaying commendable democracy.

With the free movement of labour, you will see more Kenyans in Uganda, Rwanda or Burundi than vice versa.  Kenyan nationals have taken over majority senior managerial posts in the Hotel and banking sector of Uganda because, these Kenyans have studied and garnered experience in management and human resource than any other national in the region. Secondly, they are aggressive, ambitious, adventurous, and hardworking. They seek results other than engulfing in petty differences like tribe, religion or political affiliations which are issues considered if you are to get a lucrative job or if you are to be awarded any contract in Uganda.

I wonder whether the perpetrators of this common market considered the aspect of language in the region. Kenyans and Tanzanians are fluent in Swahili, yet Rwandese and Burundi nationals prefer French to English. Ugandans may grasp a few Swahili words but the majorities do not understand French. I am a professional Radio broadcaster and artist. If I were to offer my services in either Rwanda or Burundi, I don’t think my French would ensure food on the table yet these countries may offer immense opportunities in my area of specialization.

With the level of awareness in the region, the common market may be an urban issue with people in the country side having no idea about the benefits of the organization in improving their operations and businesses. However, I believe that the cultural exchange and the business competitiveness will improve the quality with regard to service delivery and the goods available in the market.   

Why Small Businesses Succeed (or Fail)

by Robert A. Normand

The American system of business management has been admired and emulated around the world. This system is characteristic of two traits in the American psyche: (1) enthusiasm for the future and making things better, and (2) an openness and willingness to change in order to achieve that end.

No society in the world is better or more prolific at creating new businesses than the United States capitalistic system but often we are so busy commercializing ideas and starting new ventures that we don’t take the time to learn basic, successful management principles that have been developed by our larger companies.

Many entrepreneurs are technical experts in what they do but start a business without any formal training or experience in management practices and principles or the “back room” activities. As a result, 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. 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.

But what do successful businesses have that troubled businesses don’t?

One: Owners of successful businesses have developed personal characteristics that exhibit themselves in their businesses:

• Invariably they have a positive attitude towards their business and life in general.

• They are committed to their effort.

• They are patient.

• They are persistent.

Two: Owners of successful businesses have developed a business blueprint called a Strategic Business Plan that clearly describes their business concept, their mission and their philosophy of business. In this document, they have set personal and corporate goals and set out specific time lines and strategies to achieve them.

Three. Owners of successful businesses have developed an Organizational Structure that functions as a well-oiled machine. This structure, including all its policies and procedures, encourages all associates to perform to their utmost capabilities. It rewards those who excel in proportion to their contributions. It also disciplines those who deviate from acceptable behavior. Training, job enrichment programs and incentive compensation plans are designed to encourage each associate to excel. Successful owners view their associates as their most valuable asset and resource.

Four: Owners of successful businesses have developed Operational Support Systems. These may be financial or non-financial, manual or automated. The objective of these systems is to support and make efficient all the activities of the organization. Well structured, they also relieve management of many day to day routine activities, giving owners more time to be strategic thinkers. The information provided by these tracking systems provide critical information on sales, cash flow and other financial performance data so that senior management can take timely action as change occurs. Red flags appear early, before problems become unmanageable.

The four legs supporting our profitable business stool model are, again:

  • Positive, Committed, Persistent and Patient senior management.
  • A Defined Business Concept and current Strategic Business Plan.
  • A Structured and Functional Organization.
  • Basic, Automated Tracking Systems to support the organization and make it efficient.

 

Strategic Business Plan.

A Strategic Business Plan is written for a minimum of three years or two years beyond the current budget year. The plan describes the company’s mission to serve its customers. It analyzes its corporate and marketing strengths and how they will be exploited. It addresses its weaknesses and how they will be overcome. It identifies its target markets and pricing strategies and it identifies and describes strategic alliances or business partners that may be crucial to success during the planning period. The plan describes positions on any other issues seen as critical to the long term health or viability of the business.

With a current and meaningful business plan the company stands its best chance of continued success and achievement. Without a viable business plan the company runs the risk best described in the old adage: “Failing to Plan is planning to fail”.

Now let’s look a little deeper at what we mean by Organizational Structure.

The basic building blocks of organizational structure for a business are:

  • An Organizational Chart depicting key functions of company operations and reporting relationships between the functions
  • Job Descriptions for managers, supervisors and professionals that detail reporting relationships, physical/mental/special job requirements, skills, duties and responsibilities and standards of performance for each function
  • Task and Duty Lists for plant workers, utility personnel and other laborers that detail reporting relationships, physical/mental/special job requirements, skills, duties and responsibilities and standards of performance
  • An objective Job Performance Evaluation System that measures performance of all employees and encourages continuous improvement
  • Information Guidelines including an Employee Handbook and a Policies & Procedures Manual that communicate acceptable boundaries and the preferred methods by which employees are expected to operate
  • An Incentive Compensation System for all employees that rewards employees for performing above the standard or budget and does so by sharing a portion of the increased profits.

When all of these organizational components are in place and being utilized routinely, the organization will have structure and purpose. Employees will feel they know where the company is going and what their role is in helping it get there. They will know the boundaries of what is expected as acceptable behavior and they will be aware that outstanding performance will be rewarded.

Operating Support Systems.

The simplest type of system is a form, such as employment or credit applications, a product return authorization or a shipping release document. More involved examples of systems include cash forecasting and management, budgeting, variance reporting and incentive distributions. These more involved systems usually include some method of automated assistance such as a Microsoft Excel® worksheet or even more specialized software.

Usually the most involved system for a small business is the Accounting System. This may be a relatively simple system such as QuickBooks® or Peachtree®. These canned systems are particularly good for non-manufacturing businesses that simply buy and resell items. Also, they manage customers, vendors, accounts receivable and accounts payable very well. Finally, they have the capability of generating excellent managerial reports.

No matter what the type of business, some type of accounting software package that can capture daily transactions in a real-time environment and be easily operated by in-house personnel is needed. In today’s fast paced business world, relying on an accountant to provide periodic statements of company performance several weeks or even months after the fact is not an acceptable strategy.

 Marketing Mistakes by Small Business owners.

Small business owners and self-employed professionals can increase marketing success by avoiding these business-sabotaging errors.

Mistake Number 1: Sinking a Fortune Into an Unproven Product

Is your business idea built on market research or a needs assessment? Entrepreneurs often fall in love with their products or services before they determine if there’s a real market, and they throw fistfuls of money into the venture. If you think you’ve got a winning idea, that’s simply not enough qualified input to run to the bank and drain your savings account!

Avoid this mistake by:

  • Conducting your detective work (research).
  • Testing your business idea with the real marketplace.

Mistake Number 2: Believing That “If You Build It, They Will Come”

Do you think you have a product or service that will practically sell itself?

There is a misconception among small business owners that, with the right product or service, your customers will simply “find” you when you open your doors for business. Whether you have a physical store or a graphically pleasing online store, your customers will not find you if you do not market to them. To stay in business you must profit. To profit you must sell. To sell you must market.

Avoid this mistake by:

  • Defining your niche market and USP (Unique Selling Proposition) that differentiates you from your competition.
  • Developing a marketing action plan and strategy to reach your niche market with your USP message.

Mistake Number 3: Trying to Reinvent the Wheel

Marketing is an age-old practice with some very basic principles. Yet, I’m sure you’ve read many marketing information products that stress the importance of being innovative and creative with your marketing efforts. It’s easy to get caught up in the innovation process and forget that the REAL focus should be on results.

Avoid this mistake by:

  • Emulating success instead of trying to create something completely new. Please note that I am not saying, “copy” what others are doing. Look at the basic structure of a tactic, campaign, advertisement, or event and use the same formula as a basis for developing your own tactics.
  • Realizing great marketing ideas are used over and over again with just the right twist to make them fit a specific business. Focus on results, and choose imitation over innovation to create your own twist on a proven, winning technique.

Mistake Number 4: Over-Preparing and Doing Nothing

The fear of failure can be powerful. So powerful that we do everything we can think of to prevent it. Yet, there is a point at which we are so busy preparing, organizing, and researching to prevent failure that we never get around to the actual marketing of the business. Here are two things to remember:

  1. Activity is not productivity.
  2. In order to sell a million of something, you have to sell the first ONE.

Avoid this mistake by:

  • Doing something! If you believe in your business and have done your detective work, it’s time to dive into the marketing pool. Start small, track results and build from there.
  • Not being afraid to make a mistake. Mistakes are the entry to success. At the very least, a failed promotion means you have SUCCESSFULLY determined what promotion does not work. And, to learn what does NOT work is a valuable tool in getting you closer to discovering what will work. So, go ahead. Fail a little. It will make your eventual successes even sweeter.

Mistake Number 5: Boredom

When I was working for an ad agency many years ago, I had one client that was running an extremely successful ad campaign. After about six months, I received a phone call from the client. He wanted to develop an entirely new campaign. When I asked, “why?” he simply said, “I’m bored with the one we have.” What? That client may have had the money to spend on a new campaign due to “boredom” but you and I usually don’t. Yet, I’ve often seen my small business clients switch promotions for the same reason. This is detrimental to your business!

“Losing money” is a reason. “Boredom” is not.

Avoid this mistake by:

  • Remembering that, what is old to you, is new to an untapped target market. If you have a promotion that is consistently getting you results, stick with it until results show you its time for change.
  • Testing new promotions without abandoning the current one. Then track results. Never swap a current promotion with a new one that hasn’t been tested.

Mistake Number 6: Doing What Your Competitors Do

It’s important to be aware of what your competitors are offering, but do not let it dictate the strategy you use for your own business.

If your competitor wants to be the low price leader, let him. Don’t try to become the “lower price” leader. Chances are this will lead you to financial problems because it will thrust you into an ugly price war. If your competitor wants to tout low prices, then you focus on value. Bargain hunters don’t necessarily want the lowest price. They want the best VALUE. Make what you have to offer something of value.

Mistake Number 7: Not Targeting a Specific Market

If you believe your market is “everybody,” you will struggle to attract people who will buy from you. The value of target (niche) marketing is one of the toughest sells I make to my clients. They understand the logic of it, but the “fear of losing a potential customer” gets the best of them.

National Budget 2010, Today

FINANCE minister Syda Bbumba will present her second budget amid the challenges of lower than budgeted revenue collections and a reduction on donor dependency.  Uganda’s spending will moderate to sh7.024 trillion in fiscal year 2010/2011, with about 27% of budget funding coming from donors, indicates provisional budget framework paper (BFP). Uganda’s growth is expected to slow to 6.4%, from 6.6% during the next fiscal year. This is compared with the 5.4% growth projected for 2009/2010.

 Analysts say that donor spending is expected to shrink ahead of the election period mainly due to concerns over governance and transparency. The Government’s budget framework paper shows that a greater share of financing for the budget (73%) will come from locally generated revenue, with tax revenues comprising sh5.02 trillion and non-tax revenues of sh63.4b.

This year’s budget will be presented a few weeks before the implementation of the East African Community’s common Market Protocol in July. The Common Market has implications on the country’s economy in cross-border trade, taxation, location of industries and investments, competitiveness of the various sectors, fiscal and monetary policies and attraction of both local and foreign investors.

Emisingi  Gy’obugagga

Pastor Mayambala has added another book “ Emisingi Gy’obugagga” to his cradle of business and self empowerment books including “ Ebyama bya bagagga”  .  Pastor Evans Mayambala, is an economic development and financial intelligence motivator, a business man, distinguished author and motivational speaker. This flamboyant pastor has transformed several people with “no money” into successful property owners and investors. Emisingi gy’bugagga highlights the values that the successful people have adopted which include your appearance, buying shares and investing share capital, identifying your niche and consolidating it plus the aspect of adding value.  He stresses that the moment one ventures into a business and it collapses, he or she loses not only money, but also the time, energy and most times, hope. Mayambala says a business failure is a financial setback which in most cases leads to disaster. A prospective businessman has to examine all the facts and information pertaining to the business before rushing into it, he adds.

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