How to Identify a Profitable Business Idea in Uganda
Many people in Uganda, especially the youth, are ever searching the internet looking for a profitable business idea. The post I wrote on low-cost home business in Uganda, in which I listed 50 business ideas, receives so many visits every day. Most of the people who read this blog post are Ugandan youth. It’s an indication that these youth are hungry for great ideas to start their businesses.
Some of these youth have expressed their appreciation for the information I provided by way of comments, which comments appear in the comments section of that blog post. Others have even personally come to me for support. I feel I should support, and indeed I will provide to our blog readers with the little knowledge I have had over the years through doing many different things, business inclusive.
Some of the people who come to me also ask me questions like this: “I have 500,000 Ugandan Shillings, which business can I start?” For sure, many times, I find myself stuck to provide an answer to that question. Do you know why? It’s because I cannot generate a profitable business idea for everyone. It’s so hard. What I can do is to provide you with information and knowledge, which you can use to generate by yourself a profitable business idea.
What I have therefore discovered, is that generating a profitable business idea is not as easy as it may sound. And if it’s one of the hindrances deterring you from starting a business, then this article is an excellent gift for you.
But first, let me reflect on some of the mistakes most people make that stop them from generating a viable business idea.
Which mistakes will stop you from generating a profitable business idea?
#1 – Thinking money first
The first mistake is to consider money first before you get a business idea. This way, you are doing things in the opposite direction. Think business idea first then money second. What I mean is that never start by looking for the money first, to start a business you don’t know yet because what will happen is that you will begin asking others to tell you which business to start. That’s completely wrong and not a proven way of venturing into business.
The truth is that nobody knows the business you can start. Of course one can tell you that you can do business A or B with the money you have. But has that person evaluated the profitability of that business vis-à-vis your potential to do it successfully? Even if he knows, has he established whether the amount of money you have is all that you will need to start it? All those are areas of reflection.
From experience, I have discovered that most people make this great mistake. For instance, many people retire from public service or formal employment with significant sums of money in the form of terminal benefits or accumulated NSSF savings. All that they do is to think out of stomach feeling that they can run a particular business because they have the money (capital). In no time, their hard-saved cash has disappeared, and they become helpless.
My advice on this is that start by having an idea of the kind of business you want to do. Don’t mind about the money as long as your business idea is viable. People with no money or little money have started and built businesses worth billions. They wouldn’t if they began by thinking about money first.
#2 – Starting a business without a plan
However, viable your business idea is, it may turn out to be unsuccessful if you work without a business plan. Most Ugandans start businesses without a business plan. As a result, they venture into business blindly through trial and error. That’s a huge mistake.
Here is the right order, please
… Have your profitable business idea first.
… Then develop a business plan for it. Important!
… Look for the resources (money, skills, knowledge, etc…) to make your business idea a reality.
Many times, after coming up with a business plan, you will realise that you need more money than you had anticipated. That shouldn’t scare you because building a business is like building a house. If you consider implementing your business idea step by step, it will become much easier for you. And that’s one of the benefits of working with a business plan.
Secondly, the plan enables you to focus your entire mind on making your business idea successful. It enhances your enthusiasm and ability to visualise for your business to succeed. Read further on how to build a successful business.
#3 – Starting big and not small
If you have never done business before, it’s good to start small and then grow big. Most Ugandans make a mistake of trying to jump to “big” too soon, expecting to make quick returns. That’s a big mistake.
What I have noticed is that great things always start small. When you start your business, it’s good to execute on a smaller scale consistently. When I look into my own life, I see that some of the most significant achievements I’ve made started as small projects, i.e. acquiring education, building a house, starting a business, etc.
Starting small enables you to go through the learning experience without wasting your valuable resources. For instance, we conceived the idea of venturing into a laser engraving business way back in 2008. We did our research and developed a business plan immediately. Step by step, we worked on implementing our strategy, first by acquiring the skills and resources we needed to run the engraving business.
How do you then identify a profitable business idea?
Let us now get to the essence of this article, having thrown more light on some of the mistakes you should avoid in starting a business.
Our concern today is how to get a profitable business idea or opportunity.
Okay, let us get started.
#1 – Find a solution to a problem
You generate a profitable business idea from finding a solution to a problem. Note the two words I have underlined: problem and solution. If you look around you and see the things others complain about, pay attention to them. Don’t stop there, right? Dig deep and, if possible, research on them to find out about the solutions you can have to those problems.
What does it mean? If you come up with an idea or someone presents a plan for you, the first thing you should ask yourself is that: what problem does it solve?
Let me illustrate this by way of an example. And let me use an example every Ugandan living in Kampala may know well, and this is the Safe Boda business. In my observation, I think the people behind this business concept developed it after identifying some of the problems Ugandans face by using boda-boda (motorcycle) means of transport.
Reckless riding, not following traffic regulations and criminals hiding in this transport sector are some of the problems people face. Because of that, most passengers have lost their lives while others are languishing in hospitals with broken limbs.
The introduction of Safe Boda, Taxify and several others are some of the solutions to those problems. Because people saw Safe Boda as a solution to the challenges, they resorted to using this kind of organised means of transport. And I think this is a profitable business idea and an excellent example of how to develop a viable business idea.
So to develop a profitable business idea, focus first on identifying the problems in your environment and list them down.
#2 – People’s willingness to pay to solve the problem
The second step is to research and find out whether people are willing to pay to solve that problem. You can find a solution to a problem, but if people aren’t willing to pay to solve the problem, then that business idea won’t be profitable for you.
How do you find out on people’s willingness to pay to solve the problem?
It’s quite simple. Just find out if there is any competition. Is there a business or businesses offering products or services related to what you intend to provide?
Using the Safe Boda business, you can see that there are so many Boda Boda cyclists and most people in Uganda prefer utilising this means of transport because it’s faster. So the Safe Boda business is a profitable business idea because there is already a sign that people are already paying for it.
#3 – The market size
After establishing people’s willingness to pay for your product or service, you now look at the market size. A business idea whose market size is small isn’t a profitable business idea because your business survives on the size of your target market.
Generating a profitable business idea is a process. You don’t jump into a business before analysing it. But most people in Uganda, because they have money, jump into any business blindly and end up with disappointment. The best practice is to weigh the profitability and viability of your business idea by going through the steps I have hinted on above. If you think this blog information has been helpful, let me hear what is on your mind through the comment section below.
Hello! My name is Charles Kiyimba, a creative engraver, a professional teacher, a passionate blogger, a confident graphic/web designer and the founder of Goleza Designers Ltd, an engraving business that turns images into real products. Through my hands-on experience, I share with you free helpful information on our products and services, business, marketing and personal development. Always dive in for more!