Be Your Own Boss
How can you become your own boss?
You can become your own boss by starting your own business, or buying an existing one.
What are some of the possible sources of capital for your business initiative?
- Your own savings
- Micro Finance Institutions
- Angel investors
- Venture capital
What type of business can you start?
To start a business one can either register a sole proprietorship, partnership or a limited liability company. It’s advisable to register the business entity, no matter the size of operation.
Who can start a private company in Uganda?
A private company may be started by any two or more persons who are associated for any lawful purpose. This can be done by subscribing their names to a memorandum of association in order to be registered with the Registrar of Companies. The subscribers may form an incorporated company, with or without limited liability.
What is a company limited by shares?
This refers to a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them. It is advisable to start a limited liability company.
What is a company limited by guarantee?
This is a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
What is an unlimited company?
It means a company not having any limit on the liability of its members.
How can you start a company?
There are various things that you should do in order to start a company and they include the following:
- Decide on the type of company to start, for instance, partnership or limited liability company
- Identify a company name
- Register with the Registrar of Companies and be issued with a certificate of Registration
- Obtain any secondary licenses from the line ministries if necessary, for example, license from Ministry of Health to set up a clinic
- Register with local authorities/councils/ for operating permits e.g. Trading Licence
- Register with NSSF if you employ more than five people
- Register with Uganda Revenue Authority and obtain a Tax Identification Number (TIN), VAT number if your annual turnover exceeds Ushs 50 million. You may register for VAT even if your annual turnover does not exceed Ushs 50 million
- Register with utility providers like UMEME, National Water Sewerage Corporation, and obtain an account number
Which business can you start?
It is advisable to go through the process of generating a business idea. This will help you to identify various business opportunities that exist in your area or elsewhere for you to either start a business or buy an existing one.
How can you generate a business idea?
You can generate your business ideas through a few ways:
- Drawing from your own or other people’s experiences
- Reading the generation and updating of the business ideas report produced by the Uganda Investment Authority, 2010
- Studying your local business area
- Researching your environment/community
- Brainstorming with your friends/family or other groups of people
You may initially generate a number of business ideas. However, you may have to select only one business idea to start with. In this regard, you may need to consider the following questions when selecting the business idea to start with:
- Where will your business be located?
- Which needs of your customers will your business meet?
- What products/services will your business use to meet the needs of customers?
- Who will buy your products/services?
- How will you sell your products/services to the customers?
- How will your business affect the environment?
- Do you have enough initial capital to start the business?
- Do you have any past experience in this kind of business?
- Do you have the required knowledge and skills to run the business?
Why become your own boss?
- It is a good choice for an independent life style
- Your self esteem can be high due to the confidence that you gain
- It gives you great pleasure as an entrepreneur
- You contribute to the economic development of the country
- You set your own work rules, including the time at which you report to work and the number of days that you can work in a week
- You decide on how much you are paid for your effort
- Poverty can become history as you earn more and more profits
- Your ideas may be respected by community members
- You may be able to employ other people
What are some of the challenges that you may face by being your own boss?
- You may run out of money to continue doing business
- You may feel lonely as you may be running the business alone
- Some of your products may be damaged or they may not be sold fast enough
- You may make losses due to a fall in prices
- You may have to work for long hours, especially at the beginning
- People may put you under pressure to give them money from your business
- You may be required to change your business location when you are not prepared to do so.
Do you have what it takes to start a business?
Check yourself whether you are already strong or need some improvements in the following areas:
Personal characteristics and situation
Commitment: You should examine whether you will be in a position to commit to the business. It will require your commitment both in terms of time and money. For instance, you may have to commit to more long hours of work in order to grow your business.
Motivation: Do you have a strong reason for starting your business? If the answer to this question is “no” then you will find it hard to commit both your time and money to the business. By being your own boss you will have to motivate yourself in order to be able to succeed.
Taking risks: It is not automatic that when you start a business, it will succeed. There are risks involved in doing all kinds of businesses, although the level of risk might vary from one business to another. Generally businesses with higher levels of risk also have higher levels of returns. You need to be a risk-taker in order to grow your business. Of course, you shouldn’t take risks without doing your home work well.
Making decisions: You should examine whether you are good at making decisions based on the results of the decisions that you have made in the past. Most of the times you will be required to make decisions for your business, for instance, whether you should buy more stock or not.
Ability to handle stress: It is sometimes stressful to be your own boss as you have to deal with everything by yourself and there may be no one to blame for the failures of the business. You must ensure that you are able to withstand stress.
Problem solving: You should look at your ability to solve problems as you will encounter a number of business challenges on a daily basis. If challenges are not dealt with well right from the start, they may escalate and lead to the closure of the business.
Goal orientation: You need to be focused and have a clear goal which you want to achieve. A business should have a goal which when achieved would lead to profit maximisation.
Social support: Sometimes business is very demanding, so you should ensure that you have a proper social network to support you along the way. For instance, in case you want advice you could talk to a relative who has been doing business for a longer time compared to yourself.
Financial situation: It is good to be your own your boss; however, you have to ensure that you have got the money to start and run the business. You also need to ensure that you understand how to manage your cash flow (money coming in and going out of the business). It is important for you to maintain a positive cash flow on a regular basis.
Technical skills: You may require some technical skills in order to be able to do certain kinds of businesses. For instance, if you want to start a tailoring business which you will operate by yourself then you should ensure that you are capable of doing the tailoring work.
Business management skills: Your ability to manage everyday business activities should be properly assessed otherwise it will be hard for your business to grow from one stage to another. You should examine whether you are capable of managing the business yourself or you need to hire someone to run it for you. You may also take a course in business management in order to enhance your skills.
Knowledge of your line of business: It is usually good to start a business which you have some knowledge about. This helps you to develop the business at a much faster rate as you do not have to start from scratch by learning how to do most of the things. For instance, if you are a teacher and you open up a school it is much easier for you to progress.
Negotiation skills: It is important for you to examine your negotiation skills as you will be involved in negotiating for good prices for your products or services. You may also negotiate for fair prices for the inputs that you use in producing your products.
Communication skills: You should assess whether you are a good communicator in order to be able to do well in business. To attract and retain customers you need not only a good product or service, but also good communication skills.
Your business and the environment: You should be able to assess whether your business is friendly to the environment, otherwise your business may be closed down for not complying with the environmental protection laws in the country.
Commitment to your community: You should consider how your business can help the greater good of your community by developing it. As a community member you have a responsibility to contribute towards the development of your community.
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