A while back, a lowly educated young man looking for what to do chanced upon the idea of selling fish. With a measly investment, he set up a table next to the Jinja Road Highway at Kigunga Trading centre armed with a panga, knife, weighing scale and a charcoal stove. He bought his first Nile Perch fish and displayed it for sale. By the end of the day, he had sold half of it and conveniently decided to deep fry what was left selling it off as a snack to the residents of the nearby shops and homes. Today, he comfortably sells not less than two fish of which each is likely to weigh at least 20 Kgs. As a result he’s been able to cater for his livelihood needs as well as engage in some investments outside this business.
In Uganda, we have three categories of entrepreneurs according to my observation. They are;
Necessity Entrepreneurs; These are people who have no choice and become entrepreneurs as a survival strategy. They are largely uneducated and can’t easily get jobs in the formal sector while the options in the informal sector cant allow them to effectively survive. They are the ones you find engaging in what is considered ‘petty’ work like hawking, shop keeping, slashing compounds e.t.c. They are the largest by number. The young man mentioned above lies in this category.
Innovative Entrepreneurs; This is the smallest subsection and usually is characterised by educated people who either have traveled widely (internationally) or are widely read. Others are also educated and tend to have some level of comfort zone financially that allows then to dream without being pre-occupied by the need to survive. They look at the society’s challenges and come up with possible solutions. Some fail from the word go while others hit with a big bang. You’re likely to find these in the mushrooming innovation hubs of Kampala and lately Universities.
Security Entrepreneurs; If you anonymously interviewed working professionals in Uganda, you’ll find many of them confessing that they don’t trust their employers enough to stake their lifeline on the job. This has led to working people trying to have a side business. It is known and now even acceptable to see an Engineer of a Telecom Company by day turning into a Chicken farmer and Egg vendor over the weekend. This has been borne out of our weak labour laws and history of insecurity in all spheres that made us adapt to these individual survival instincts.
I have been led to share this simple story because of a tendency I see among the educated elite. While many nurse entrepreneurship ambitions, are able to identify business opportunities, have the relevant knowledge or access to resources to carry out studies on the investment, can attract significant funding especially through the readily available salary loans, they hardly get started.
In most cases they get entangled in what I refer to as Paralysis of Analysis. They have a tendency to over analyse the opportunity at hand thereby getting stuck in calculating figures and trying to conform to economic theories. All this in the name of Calculating Risk. The eventual result is getting stranded like a dazed sheep on the road struck by headlights of an oncoming car in the middle of the night.
Others having read all these investment and entrepreneurship books usually authored with the Developed economies in mind tend to have a preference for wastefully spending money before even generating that first income.
I had this client that wanted to set up a spice packaging business and on probing him further, I realised that he had made up his mind to fly to China to identify the kind of machine he needs to package the spices. The cost of this discovery trip alone was estimated at close to US$ 5000. When asked if he had already come up with the product and sampled it through relatives and friends to establish his chances, he responded in the negative. He had already employed the services of a Financial Advisor/Consultant who had laid out an investment plan for him of close to US$ 30,000 complete with how he can borrow the money. I shed a tear for him because I could clearly see the roadblocks that were being put before him prior to realising his dream. As someone who has set up small businesses over time, I fully understood where he was coming from and what he wanted to do but the path he was taking was likely to lead him into a ditch. He hadn’t even considered issues like Distribution which are key to the success of such home consumables.
Eventually, I gave him my honest analysis of his situation and showed him how he could start off that business with less than US$ 100 and grow organically. Unfortunately, he’s never returned and last I heard he’s still planning to start the business (Our interaction was eight months ago).
While I appreciate the need to mitigate risk when embarking on a business investment, we shoudn’t be overwhelmed by the analysis around these factors. Its important to apply a leap of faith and start. Often times starting in a lean manner is the best way as it allows you to take a calculated risk. Just like the example of my client, losing US$ 100 would be less impactful on him than losing US$ 35,000. Besides, sometimes starting small allows you to grow into the business and master the loopholes. This is one of the reasons that explains why for a long time the leading business people in Uganda were mainly uneducated people. Having started off as Entrepreneurs by necessity, they had no choice but to DO. While they may have burnt their fingers (an experience each entrepreneur must face) on a number of occasions, they eventually pulled through.
So, are you educated? Holding on to a job? Toying with entrepreneurship? Spend less time eulogising and romancing with your idea. Strike a middle ground between Detailed Analysis and Just Doing. START NOW !!!