The entrepreneurs that set up these enterprises lacked business management skills and capital, and as such, many of them faced a number of problems, most of which were of a startup nature. A survey was carried out to establish the causes of small business failures in Uganda using businesses in Embarrass and Bushiness towns as case studies. In-depth interviews and questionnaire methods were mainly used to collect data from 133 small business enterprises. It is concluded that the causes of small businesses failure are multidimensional and diverse.
They include poor management as well as political, economic, social, cultural and environmental factors. In practice, many of these are interrelated. The survey revealed that the startup factors posed a greater threat than those that are encountered once the business has been established. As such, business people who successfully negotiate the initial startup hurdles have greater chances of future success in their businesses. Despite the solutions sought over the years, the business community in Uganda is still hampered by the challenges. The study concludes by making a number of practical suggestions against business failure.
IThe prevarication drive, which started in the early sass, made the Government of Uganda relinquish its position as the number one employer. The Civil and Public Service reforms downsized the public service, reducing staff employed by central government from 320,000 in 1990 to 191 ,324 in March 2001, a reduction of African micro industry case study. Doc By tuning small scale business owners. This led to the mushrooming of small scale business enterprises, most of which employed fewer than five persons and as many as 90% of the non-farm private sector workers.
Since then, the number of small scale businesses in Uganda has grown from 800,000 in 1995 to about 2,000,000 in 2002. These serve about 6,000,000 people at business and household level of the 26. 3 million population. [3] Small scale business is defined as one which is independently owned and operated, and not dominant in its field of operation. [4] It can also be defined in terms of sales volume and by the number of employees in the business. In Uganda, these businesses are very small employing up to a maximum of 50 people, who in most cases are members of the same family.
They have working capital of less than USED 26,882 and revenue value of USED 5,376 – 26,882 throughout each year of operation. [5] In addition, they have an asset base of up to USED The major activities of small scale businesses in Uganda are farming, buying produce, market vending, catering and confectionery, shop keeping, second hand clothing, health/herbal services, secretarial services, telephone services, handicraft, transport, and many others. The majority of these operate in shared premises and are set up before they get licenses.
Ownership and management is on family basis and as such has a small call operation. It is labor intensive and skills are acquired on the Job, often using adapted technology. According to John Chough, more than 50 percent of them fight an uphill battle from the start and fail in the first five years. [7] This is a common scenario for Uganda small businesses, as most of them ‘never celebrate their first anniversary. ‘ The purpose of this survey was to investigate the reasons for small business enterprise failure.
Another reason for the survey was to determine the financial impact of “load shedding” to the businesses that use electricity as a source of energy. Case studies of businesses in two towns in Uganda were made and for the businesses studied, causes of failure and some practical measures suggested are outlined. This knowledge could help in mapping out strategies for solving the number of problems faced by these businesses, thereby contributing to poverty alleviation, one of the Millennium Development Goals (Meds). A version of this survey is to be translated in the local languages in order to be available to a wider audience. Read also marketing plan for cafe Cyrilla
