As talk of a looming second lockdown over rising cases of Covid-19 gains ground, many people are worried about what is going to become of their businesses if President Yoweri Museveni announces on Sunday night that Uganda is under key once again.
Many businesses have suffered significantly due to the lockdown that some have closed downs never to come back.
Whereas experts advise that measures put in place including Standard Operating Procedures (SoPs) should be well enforced instead of total lockdown, there are words of wisdom from a business titan that the business community can hang on.
Mr Sudhir Ruparelia is a Ugandan billionaire, the founder and Chairman of the Ruparelia Group, one of Uganda’s largest business conglomerates with over 28 companies, invested in financial services, real estate, education services, hospitality, agriculture and media. Among other businesses, many of his businesses, including those in the the service sector suffered a lot during the lockdown. However, several of Ruparelia Group projects have remained grounded, and when the window opened, there was need to learn a few lessons from how his empire has survived the turbulent times.
The billionaire said in April 2021 that Uganda and the world would enter into recession period with the exception of India and China.
Dr Ruparelia penned this memo of 20 tips for smart people in business, and policymakers should do to get Uganda back on its feet, after sharing cash. His thoughts and ideas should inform response to Covid-19 threats on businesses and investments of Uganda.
What will change during the slowdown?
1. Spend on luxury will come down drastically
2. Long-term / Capital expenditure such as construction, technology will be almost cut to nil
3. Lifestyle expenditure such as salary, rent, infrastructure, entertainment will be minimized
4. Working capital will be under tremendous pressure. Businesses will go out of business especially those who are riding on borrowed working capital
5. New innovative business models will evolve
What will NOT change during the slow down?
1. People consumption of essentials will continue
2. Rise in Investment in ideas/technology solutions that will improve efficiency
3. Short-term trading businesses with healthy cash flow practices will thrive
4. The rise in investment in spiritual / self-learning practices
5. Value for money products/services will shine
What you should do as an individual?
1. Hold back any luxury / high risk investments where visibility of returns are difficult to predict
2. Minimise expenditure on the routine stuff – keep a watch on your lifestyle spend – ask the question, is it really necessary!
3. Develop yourself on improving competency and developing skills to become sharper and efficient
4. Share the financial situation with your family members and educate them on the family financial position and the plans to improve
5. Invest – yes invest in the right things. History repeats. Take risks based on thorough research. This is not the time to follow tips.
What you should do as an Entrepreneur?
1. Take care of your employees – communicate more than ever. Be reasonable and transparent with them
2. Use the slowdown to improve your processes/people
3. Invest in technology/systems that will accelerate your reach in adding value to your customers
4. Be frugal in working capital decisions and operating expenditure
5. Capital expenditure to be on hold unless it is clear visibility on the associated returns
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