This article was also published by the people at the Competitiveness & Enterprise Development Programme here:
UGANDA being the world’s most entrepreneurial country is NOT a myth; the most recent research cited for this is the B2B Marketplace Approved Index, which looked at 73 countries and the proportion of adults there who have started a business.
We (Uganda) scored 28% of adults who had done so or co-owned a business – almost twice as many as those in the country that came second (Thailand with 16.7%).
To be honest, we all know that if our SMEs (Small and Medium sized Enterprises) were more organised we would rank even higher in such studies, but more importantly we would be doing much, much better economically.
In private I frequently raise this fantasy in my mind of every single Rolex Stand on the side of every road in Uganda registering as a business entity, with a Board of Directors, Share Capital, a Management Team and a bank account of sorts (even Mobile Money).
Just imagine how far that fantasy could go: perhaps one day a group of our better-healed Ugandans could get into an investment arrangement that would buy into or buy up all these SMEs and create a national equivalent of KFC or McDonald’s, but of Rolexes – like ‘RolexUG’.
Today, a venture like the RolexUG food chain could easily find itself cornering the Rolex market in many amazing ways, and possibly open up branches in the United States and Japan and Russia, selling shares on the stock market and creating a worldwide revolution even bigger than Russia’s blini (which is now street food in London…)
Sadly, our SMEs mostly prefer to operate as ‘the informal sector’, mostly because of a traditional fear of regulation and the costs that come with it. Most of us are afraid that registration means paying more taxes and other statutory obligations, or facing more scrutiny from authorities.
For instance, those Rolex stands would find themselves having to file more paperwork – which would mean many changes to their current business structure that would be a little discomfiting, since we rarely see them with reams of paper or computers and other such paraphernalia normally associated with ‘office’.
Plus, they would find themselves having to report more to offices dealing with things like public health, environment, and so on and so forth. Their employees would now start talking about NSSF and Pay As You Earn…the complications are daunting.
But if we teach our entrepreneurs that the benefits outweigh those complications, and develop an environment that makes it easier (not easy – nothing good ever comes from things being easy), then perhaps we will reap more from this officialdom.
That officialdom is much less daunting these days, with the Uganda Registration Services Bureau (URSB) on hand.
In the past, we struggled to get companies registered and off the ground, and many times found the idea of the companies registry daunting; whereas now we work with the Services Bureau as just that – a Services Bureau.
Registered businesses, for instance, will attract funding easier than loose, informal arrangements do. Even that Rolex stand would make for a good investment, but only if the investor – be it a massive global bank or just the uncle of Sula the Rolex Guy – would be more comfortable if Sula had an official business under which agreements would be signed and guarantees placed.
Entrepreneurship support funding also goes easier to organised business, than to informal, mobile stands. Registration, for instance, gives you a presence that is reliable and easy to find – which is essential when anyone’s giving you money; so essential that some people aren’t comfortable buying newspapers at traffic lights in case they turn green and your newspaper guy goes in the opposite direction before giving you back your change…
Add more benefits to capital injection – sales, for instance, will increase organically to a point that makes sense of business registration and the officialdom that comes with it.
Ideally (key word) an SME that enters the formal sector (business registration being the entry point) opens the doors to such benefits as research and development and scientific marketing.
Sticking to the Rolex stands, if we had clear visibility as a nation of how many Rolex stands exist and are operational, perhaps we would do research into and develop a certain type of healthy and resource-saving cooking oil or frying pan to support this business. Or maybe we would come up with a better design for the Rolex stand, like the guys at Musana Carts have done. The opportunities are limitless.
And those opportunities stretch to marketing as well – we have an entire sector of marketing researchers and creatives out there who are focussed on the ‘Big Guys’ simply because that’s who they can find out there, engage with, and create concepts for that they can get paid to execute.
I can see, in my fantasy, a few marketing professionals applying themselves to concepts for the Rolex stand when they realise exactly how many of them are potential clients who can apply for external funding support to pay for these concepts with an eye on the global market as customers.
Speaking of that global market, sympathise with our Export Promotion Board and how hard their work is right now simply because too many SMEs are not registered as businesses. If they had this well-built directory of all SMEs then they would, perhaps, find or develop foreign markets easier for us.
These registered businesses would also find it easier to engage both the government and their other stakeholder groups, because they would exist officially as entities with identities, locations and strength of presence.
And it is that engagement that advises and develops government policy such that it supports the SME – creating that very environment that makes business registration make sense for an SME.
It’s a fantasy, but dreams could come true.