2020 and 2021 were rough years for most Ugandan businesses due economic downturns brought on by the COVID-19 pandemic. Manufacturing companies made little to nothing in profits. Several multinational companies collapsed. Ecommerce companies remained unprofitable. Profit margins of retail stores dwindled.
Several factors contributed to the backdrop in profitability, from the unexpected outbreak of Coronavirus to the troubling devaluation of the Uganda currency against the dollar.
But even with all these events around us, Ugandan business owners have remained optimistic for 2023, when the economy will be fully opened after two years of restrictions to prevent the spread of the deadly COVID-19.
Some businesses that are optimistic for 2023 have started folding up, but as the religious nation Uganda is, many businessmen are looking towards “hope” and “grace” for a miraculous turnaround.
Also read; How to sell online in Uganda.
Why Ugandan businesses will fail in 2024 and what you can do to save yours
A wise man once said, “hope is not a strategy,” and for that matter, here are ten tips that will help your business survive in this collapsed economy in 2024.
1). Look for ways to cut costs aggressively
If you are not careful enough, expenses will ruin your business in 2024. It is time you do away with every unnecessary profit-eating agent in your business. Is it an unneeded service? Unnecessary staff or strange miscellaneous expenses? Also, consider moving from your fancy office to a more functionally modest one. Most businesses with fancy offices don’t generate as much revenue as those operating in modest work environments. If you don’t adjust your overhead costs, your business might collapse as soon as 2024 takes off.
2). Focus on cash flow
Do everything possible to see that cash is coming in faster. For example, you can offer reasonable discounts to make customers pay more quickly and sell more rapidly. Deliver better customer service. Please do all you can to entice your customers and ensure that cash keeps coming in because it will get tougher since customers want to spend less at these times.
3). Focus on staying afloat, not growth
This is not the time to focus on growth. Acquiring many new customers means spending a lot on creating more awareness. This will painfully backfire because your cost of acquiring new customers is already high considering the abnormal Uganda Shilling to Dollar exchange rate. This would put you in a horrible loss index. Instead, focus on identifying your strength now. Understand what keeps your customers coming back. What generates for you the most income? What is your business known for? Staying afloat now is all you need, and it will determine which business will remain standing in 2024.
4). Be on good terms with your creditors
Falling behind on periodic repayments creates a terrible image in the face of your creditors. When you start delaying your payments, you begin looking unreliable. If you are not careful, long after the economy has recovered, no one might trust you enough to loan you money or give you products or services on credit. It would be best to let your creditors know your status and tell them how it affects your business, so they can see how they can help you realign your payment schedule. This way, they would trust you better in the long run.
5). Outsource a lot of work
To many, this may seem an expensive approach, but outsourcing one project at a time can save you costs you would spend on paying permanent staff in a year. Instead of hiring an individual and paying them a lot of money monthly, streamlining job roles and outsourcing the service for a slightly higher sum but lesser project counts is far better. This would save you both the emotional stress and cost of managing and maintaining staff in your company.
6). Renegotiate with your suppliers
Explain what is happening in your business and economy to your suppliers, especially if they are based abroad, so that they (those who value customer relationships) can help you a little better by slightly reducing the cost you spend in acquiring their items. Appealing to the emotions of suppliers might work, but don’t try this under normal circumstances. People mostly want only financial pay-offs.
7). Offer a new service
If your business has grown considerably, create a new branch. Preferably something that is not capital-intensive. Always think outside the box when coming up with a new business idea. For example, suppose the service you offered was a premium one. In that case, you can introduce a regular service for people who have already reduced their expenses and are not willing to spend extravagantly until the economy returns to normal.
8). Cut costs for your customers
Offer your customers creative ways to help them cut costs when they patronize your business. This way, they would feel better appreciated and keep patronizing you, knowing that you care about them and their pockets.
9). Retrain all your staff
Train your staff to carry on more responsibilities. Enlighten them on the economic situation in the country and how cross-working in the company can ensure that their jobs are saved for the future. This approach will not only keep your staff motivated but will also cut new staff costs and ensure the majority of their jobs will be secure until long after the economy has recovered.
10). Embrace social media
This is where you can get some free leads and sales. Build your social media presence and connections. Show your social media followers what you can do and drive potential sales while you are at it.
Also, read; 21 ways to save money on grocery shopping in Uganda.
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