Showbizuganda

Tag: Business

  • Transcending the Covid-19 turbulence: How Investment Clubs can prepare for the challenge ahead

    Transcending the Covid-19 turbulence: How Investment Clubs can prepare for the challenge ahead

    ‘The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic’ quoting the words of global futurist Jack Uldrich. The pandemic has catapulted the world into a future of deep change thus rendering creativity and action more powerful and versatile than knowledge.  

    Dr. Peter Kimbowa, a strategist and renowned leadership catalyst spoke of the importance of reinvention and creativity in times like this. This was during a webinar organized by dfcu Bank for their investment club business segment.

    “It is now time to rethink, review progress, reassess your potential as an Investment Club and realign your prioritiesbut more importantly, is to reimagine the future. This now creates a generation of clubs who don’t survive mainly because of fear but because of creativity. Not surviving because of fear of risk but because of ingenuity. The capacity to liberate your thinking and not limit yourself to a specific scope in terms of investment. This is the time for us to rethink and build resilience,” Kimbowa advised.

    Startups and growing businesses comprise 98% of the country’s enterprise, employ 80% of the private sector,contribute 30% of the country’s Gross Domestic Product (GDP) and create 30% of jobs annually. There is currently a decline in incomes and an extraordinary rise in terms of costs thereby creating a mismatch between payables and receivables. The challenge of liquidity is going to become key. “We see a situation where only 15% of SMEs have cash reserves that can take them beyond 3 months and up to 80% SMEs have cash reserves of up to 30 days,” Peter revealed.

    This, therefore, raises the issue of sustainability and better investment club strategies. Hybrid investment clubs are the way to go – this means, if a club has 100M, 40% isreserved for internal operations of the club; Members can borrow and return that money. The other 60% is for investments; both long term and short term.

    Most investment clubs are right now more thanfinancially stressed. Some of their members have lost jobs or are no longer earing the same income as before. Clubs need to take into account psychosocial support for their members to help them get through this time. The leaders need to constantly engage their members to provide whatever support necessary. Do you have an emergency fund as a club? This could come in handy during this time.

    “Our job as investors is to make this new normal work. As an investment club, that means becoming open-minded and curious about things. Members of an investment club cannot afford to see a crisis as a crisis, you should see a crisis as an opportunity, as a declaration of a need to change then crisis will produce an opportunity. Start solving the now by exploring the next and imagining the beyond,” says Kimbowa  

    Peter went ahead to advise dfcu Bank investment club members that work is no longer where you go, it is what you do wherever you are thus it’s important to separate the workplace and workforce. Migrate to digital but be aware of cybersecurity.

  • KACITA Asks Gov’t to Declare the 3 Months Lockdown a Loss in regards to Rent Obligations

    KACITA Asks Gov’t to Declare the 3 Months Lockdown a Loss in regards to Rent Obligations

    Traders under their umbrella body, Kampala City Traders Association (KACITA) have asked government to declare the three-month COVID-19 lockdown as a loss to the entire economy.

    This is in order to cushion tenants whose merchandise shops were locked following the lockdown from rent obligations.

    The call has been made today by KACITA Spokesperson, Issa Sekito today while appearing before Parliament’s Committee on the National Economy headed by former Finance Minister Syda Bbumba.

    He also called for a waiver on rental income tax obligations for the three months so that it becomes credit against the forfeited rent.

    “Why we think this is possible is that for every bank to give you money, forget about collateral; the most important thing is cashflow. Therefore, if I can’t have my cashflow (in order), what is it am I going to pay for even if you restructured my loan?” he said

    John Kakungulu, the Executive Director at Federation Of Small And Medium Sized Enterprises called on government to clear all domestic arrears to enable the most hit businesses utilize this money to keep afloat.

    On his part, Charity Kiyemba, the Secretary of Uganda Alcohol Association noted that starting July 2020, manufacturers are expected to start paying for digital tax stamps, a thing she said will negatively affect their businesses.

    Kiyemba said that companies involved in brewing alcohol will be required to pay 15 billion to meet the digital stamps expenditure, noting that once this is done, they will transfer the bills to the consumer.

    She added that the last time taxes were increased on beer, the consumption reduced by 72%.

  • Small and Medium Business Enterprises in the COVID-19 era; to survive or thrive?

    Small and Medium Business Enterprises in the COVID-19 era; to survive or thrive?

    The COVID-19 pandemic has come hard at every business operation, regardless of size, balance sheet or level of preparedness. After months of watching the situation remain the same or in some cases, get grimmer, it’s safe to say that we’ve come to the point of fight or flight.

    At an individual, business and national level, it is important for us to accept the reality we are living in, because acceptance will help us move to the next step – the fight to salvage what we haven’t lost and get back on the road to productivity, profitability and thriving.

    Small and Medium businesses in Uganda have been hit especially hard by the pandemic with most having to shut down as they await Government directives on the next course of action for their specific sectors. There are factors which are out of control for SME owners but more importantly, there are more within your control which fall under learning, adaptation, diversifying and streamlining your operations. Getting these rights will buffer your business and prepare you for a future that is currently uncertain.

    You cannot outrun digitalization

    Whether it’s enabling online purchases and payments for your products, setting up Social Media pages for your business or even upgrading your company website, any step made towards digitalization is a step made in favor of the longevity of your business. The return on investment is bound to be in favor of returns for your company, with the added advantage of the low spend needed to set up most of these solutions. In the words of Charles Darwin, it is the species most adaptable to change that survives.

    Rethink your demand and supply model

    If the mountain cannot go to Muhammad, then he must go to the mountain. With fewer customers able to reach your shop, restaurant, bakery, consider taking the products to where it’s convenient for customers. While it might be difficult to understand and predict current market trends, you can still transform your business from one that is focused exclusively on in-person services and sales to one that approaches those sales from several angles; in person, online and delivery of orders made through calls and messaging.

    Upskill your staff and yourself

    For most SMEs, cutting down the number of people working in their businesses might seem like the most logical thing to do. One way to work around this is to combine the restructuring of benefits with upskilling and realigning staff positions. Turn your sales team into a formidable delivery team and equip your marketing team with customer care and market research skills that are crucial for business continuity at this time. Class central is a resource that will empower your SME with free content on how to harness technology:

    Power in partnerships

    There is no better time to create or rebuild partnerships with individuals and organizations who will be of benefit to your business. dfcu Bank for instance, provides a range of financing instruments to SMEs customized to meet your unique needs. We’re also in the process of restructuring of loans for our SME customers to support them through this time. Contact us today if you require any information, assistance or guidance.

    Renegotiate your Contracts and Terms of Trade:

    Most of the running performance contracts were entered in between parties with minimal anticipation for uncertainties such as delayed production and delivery, challenges in international trade supply chain, worldwide lockdown. Unless there is a deliberate quest to vary the contract terms, many might face a Force Majeure which might be so costly to parties that may have already invested heavily in production. As such Letters of Credit, Guarantees, Undertakings and Contract Agreements have to be renegotiated with Banks and Suppliers with the desire to extend the performance period to avoid damages.

    Stay positive.

    Entrepreneurship comes with its fair share of pitfalls, the ones who turn out successful are those who treat the difficult days as learning opportunities. Approach it like you would any other roadblock. Staying positive keeps you focused on finding solutions as opposed to counting the difficulties – an attitude that will see you thrive amidst the times we are living in.

    Ronald Kasasa, Head Business Banking
    dfcu Bank