Many people in Uganda, especially the youth, are constantly searching the internet for profitable business ideas. The post I wrote on low-cost home businesses in Uganda with 50 business ideas receives many visits every day. Most of the people who read this blog post are Ugandan youth. It is an indication that these young people 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 our blog readers with some knowledge I have gained over the years through doing many different activities, business inclusive.
Some 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 providing 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. I can only provide you with information and knowledge that you can use to come up with a prosperous business idea.
I have, therefore, discovered 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.
But first, let me reflect on some of the mistakes most people make that stop them from generating a viable business idea.
What Will Stop You from Generating a Profitable Business Idea?
#1 – Thinking Money First
Profitable Business Idea
The first mistake is to consider money first before coming up with a business idea. This way, you are doing things in the opposite direction. Think of business ideas first, then money second. What I mean is that you should 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, a person can tell you to do business A or B. 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 or terminal benefits or accumulated NSSF savings. They think that since they have funds (capital), they can run a particular business. In no time, their hard-earned money disappears, leaving them helpless.
My advice on this is that start by having an idea of the kind of business you want to do. My advice is to start with a vision of the kind of business you want to do. Don’t worry about the money as long as your business idea is viable. People with no 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 may be, it may become 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 correct 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.
After coming up with a business plan, you will realise that you need more money than anticipated. That shouldn’t scare you because building a business is like building a house. It will become much easier if you consider implementing your business idea step by step. And that’s one of the benefits of working with a business plan.
Secondly, the plan allows 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
Start Small
If you have never done business before, it’s good to start small and grow big. Most Ugandans try to jump too “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 an 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. We worked on implementing our strategy slowly 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 by 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 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: 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.
Overloading Boda Boda
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 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 their Problems
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 people’s willingness to pay to solve the problem?
It’s simple. Just find out if there is any competition. Is there a business offering products or services related to what you intend to provide?
Overloading Boda Boda
Using the Safe Boda business, you can see so many Boda Boda cyclists, and most people in Uganda prefer 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.
Conclusion
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 disappointed. The best practice is to weigh the profitability and viability of your business idea by going through the steps I have hinted at above. If you think this blog information has been helpful, let me hear what is on your mind through the comment section below.
Thank you so much, Mr Kiyimba Charles, for such an awesome and interesting article. All that are you are talking about is 100% correct because I have realized that I am among the victims, the reason is that before I had an idea of starting up an Internet Cafe and I accounted all necessities of that particular business though I didn’t have start-up capital at that moment. But after getting money, I realized that an Internet cafe might not be profitable due to stiff competition and low daily income. From there I came up with an idea of starting a cleaning service where you have found me struggling to make a business plan for that because I have all the required skills for that venture.
Thank you so much. I’ll be glad to hear from you May God bless you
Thank you, Julius, for your comment. I will be happy to hear from you, too, about your progress.
Thanks Mr Charles I have my business idea but my problem I don’t know to speak English and am not good at writing it so can I be helped
Doing business is not for people who speak English. As long as you have an idea, you can start slowly irrespective of whether you know English or not