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How entrepreneurs can propel middle income status

Entrepreneurship plays a crucial role in the social-economic transformation of any country striving towards middle income status. In Uganda, the rate of entrepreneurship is commendable, but unfortunately, only a few startups manage to survive beyond their first few years.

Various social-economic factors contribute to this challenging landscape, but it is essential for entrepreneurs to find ways to navigate through these hurdles and ensure their businesses thrive amidst calamities.

How entrepreneurs can propel middle income status
How entrepreneurs can propel middle income status.

Having been in business for the past seven years, I can personally attest to the difficulties faced by entrepreneurs in Uganda. It is not uncommon to reach a point of desperation when your business is on the verge of bankruptcy, and you struggle to find ways to boost production and meet market demand. While starting a business may seem relatively easy, keeping it afloat and thriving is a different story altogether, regardless of the skills and knowledge possessed to operate it effectively. Each business venture comes with unique challenges that hinder its ability to function optimally, including a lack of financial support.

One of the significant obstacles faced by entrepreneurs in Uganda is the lack of sufficient support from public-private bodies aimed at fostering the growth of small and medium enterprises. These organisations often fall short in providing the necessary assistance and guidance that young entrepreneurs require to sustain their businesses. Consequently, only a fraction of businesses in Uganda manage to continue operating successfully.

Furthermore, most ventures in East African nations, including Uganda, remain small-scale and informal. While some entrepreneurs may intentionally choose to operate informally to avoid taxes and registration costs, for others, it is simply a consequence of not having the necessary resources and means to go through the process of business registration. However, remaining informal limits opportunities for growth and financial security. By operating informally, entrepreneurs miss out on valuable opportunities, such as bidding for government contracts, which could provide a pathway for growth and stability.

To bridge the gap and propel entrepreneurs towards middle income status, it is essential for various stakeholders to come together and implement strategies aimed at addressing these challenges. First and foremost, public-private bodies should enhance their support systems for small and medium enterprises, investing more resources and expertise in nurturing and guiding these businesses towards success. This includes providing financial support, mentorship programs, and access to relevant networks and markets.

How entrepreneurs can propel middle income status.
How entrepreneurs can propel middle income status.

Additionally, the government needs to simplify the process of business registration, reducing unnecessary bureaucratic hurdles and associated costs. By streamlining the registration process, more entrepreneurs will be encouraged to formalise their businesses, making them eligible for a wider range of opportunities and contracts. Creating an enabling environment for entrepreneurial growth also involves offering tax incentives and implementing policies that favour local businesses over foreign competition, providing a level playing field for entrepreneurs to thrive.

Entrepreneurs in the agricultural sector, with which I am very familiar, often have low growth expectations due to the perceived risk. Financial institutions frequently discourage them from expanding their businesses, leading many to create additional or alternative ventures instead. This lack of persistence is fueled by difficulties in obtaining loans and high interest rates that exceed 20% at banks and are even higher with other lenders.

Borrowing money during the execution stage is seen as too risky for most people. Agricultural entrepreneurs face challenges in accessing funds without providing visible security. Throughout Africa, entrepreneurs consistently identify access to capital as the biggest obstacle to growth. However, it is important to note that money alone cannot guarantee success without passion and financial discipline. Some businesses have thrived despite entrepreneurial adversity by implementing good record-keeping practices and maintaining a clear separation between business and personal finances.

To foster a conducive environment for young entrepreneurs, the country should establish robust structures and frameworks for business support. While entrepreneurship training programs primarily focus on business start-ups, they often overlook the essential components of sustaining growth and daily operations necessary for continuous improvement. It is through an entrepreneur’s network of connections that they can find immense potential for future success.

How entrepreneurs can propel middle income status
How entrepreneurs can propel middle income status.

Encouraging individuals to take ownership of their responsibilities, instead of waiting for ideal conditions, and implementing supportive systems that allocate resources and expertise to young entrepreneurs can significantly enhance productivity and longevity across all sectors of the economy.

Alongside the efforts of public-private bodies and the government, individual entrepreneurs themselves must actively seek out resources and support that can help their businesses prosper. This may involve attending business training programs, networking events, and seeking mentorship from successful entrepreneurs who have navigated similar challenges. Additionally, entrepreneurs should explore alternative funding options, such as angel investors, venture capitalists, or crowdfunding platforms, to secure the necessary financial support to sustain and grow their businesses.

In conclusion, achieving middle income status requires a concerted effort from both entrepreneurs and various stakeholders. Uganda’s high entrepreneurship rate is a promising foundation, but there is a pressing need to address the challenges faced by entrepreneurs to ensure their businesses survive and thrive. By enhancing support systems, simplifying registration processes, and creating an enabling environment for growth, entrepreneurs in Uganda can overcome social-economic obstacles and play a pivotal role in propelling the country towards middle income status.

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