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Balancing Taxation and Support for Small Traders

by with No Comment Diary of an SME

              Small Traders to Be Spared the Headache of KRA’s eTIMS System

The Kenya Revenue Authority (KRA) has declared that small traders will not have to deal with the intricacies of the electronic Tax Invoice Management System (eTIMS), which is a positive development for small-scale retailers throughout Kenya. The goals of this decision are to facilitate compliance, lessen the tax burden on small firms, and encourage the expansion of Kenya’s unorganized economy.

Knowing How to Use the eTIMS System

The KRA introduced the eTIMS system, which was intended to improve revenue collection and decrease tax evasion by automating the issue, processing, and reporting of tax invoices in real time. Businesses must use this system to issue invoices electronically, which are then sent straight to the KRA for record-keeping and verification.

The switch to eTIMS has been difficult for small merchants, nevertheless, as they frequently lack the resources and technical infrastructure necessary to put such systems in place. For many, the necessity for continuous internet connectivity and the obligation to buy, install, and maintain the required hardware and software have created major operational and financial obstacles.

What Does the Small Trader Exemption Mean?

The KRA has responded to these worries by declaring that small traders will not be obliged to use the eTIMS system. This choice is a component of a larger initiative to assist Kenya’s unorganized sector, which is home to millions of small enterprises and makes a substantial economic contribution to the nation. Traders whose yearly turnover is less than the KRA-established level will be eligible for the exemption.

It is a huge comfort for small traders. Many of these traders, especially those in rural areas, do not have the technology infrastructure necessary to meet the standards of eTIMS. In addition to relieving the financial burden of compliance, exempting them from the system will free them up to concentrate on expanding their companies rather than figuring out intricate tax procedures.

Assistance to the Unorganized Sector

In Kenya, the unorganized sector is essential to economic stability and employment development. A sizable section of the workforce is employed by small traders, which include street hawkers and market sellers, and they support families all throughout the nation. The KRA recognizes the particular difficulties faced by small merchants and encourages them to remain in the formal economy without worrying about fines or complex laws by exempting these companies from the eTIMS burden.

Additionally, the exemption enables these enterprises to carry on with a more straightforward and adaptable structure for tax compliance. Small firms can concentrate on making money and growing their operations rather than investing in expensive technologies.

A Balanced Approach to Tax Compliance in the Future

Although the exception is a positive move, issues still need to be resolved. In addition to the ongoing requirement to increase financial literacy and provide access to more straightforward digital tools, small businesses will require ongoing assistance to ensure they continue to comply with other areas of the tax regime. The KRA needs to find a way to balance increasing the effectiveness of tax collection with preventing bureaucratic obstacles from overwhelming small business owners.

The government may also need to look into other options, such streamlined tax return procedures or mobile-based systems that do not require costly technology, to include unregistered enterprises into the tax system.

In conclusion

Given the importance of the informal sector to Kenya’s economy, the decision to remove small merchants from the eTIMS system is a positive step. Millions of small business owners no longer have to worry about compliance, freeing them up to concentrate on expansion and sustainability. The KRA is assisting Kenya’s small business owners by fostering a more welcoming tax climate, which guarantees their ability to continue making contributions to the country’s economic growth while adhering to the law.

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Empowering Small Businesses

by with No Comment Diary of an SME

          Why Credit Guarantee Schemes Offer Hope to Kenya’s Small Firms

Small and medium-sized businesses (SMEs) in Kenya have long been seen as the foundation of the country’s economy. These companies stimulate innovation, provide jobs, and make a substantial contribution to GDP growth. SMEs in Kenya, however, confront many obstacles in spite of their crucial role, with one of the most urgent being access to financing. Due to exorbitant interest rates, bad credit, or a lack of collateral, many small businesses find it difficult to obtain loans. This is where credit guarantee schemes (CGSs) come into play, giving small businesses much-needed hope by giving lenders a safety net and facilitating SMEs’ access to the funding they require to expand and prosper.

The Economic Burden on Small Businesses

Obtaining finance from conventional financial institutions like banks can be challenging for small enterprises. Lenders are reluctant to give credit to SMEs because of the collateral requirements, the difficulty of loan application procedures, and the perceived risk of lending to unproven companies. The loan procedure is made more difficult in Kenya by the fact that a significant portion of small businesses operate in the unorganized sector. Since many of these companies don’t have official financial records or a credit history, banks view them as dangerous.

Small businesses are limited in their capacity to grow, develop, or even continue day-to-day operations if they do not have access to funding. Small enterprises struggle to expand as a result, which lowers their economic contribution and restricts the creation of jobs.

Credit Guarantee Plans: What Are They?

Financial tools known as Credit Guarantee Schemes (CGSs) are intended to persuade lenders to extend credit to companies that might otherwise be deemed too risky, especially SMEs. A government or financial institution offers lenders a guarantee in a standard CGS, which covers a portion of the loan in the event that the borrower defaults. By lowering their risk, lenders are more inclined to grant loans to SMEs that they might have otherwise denied.

A number of CGS initiatives have been started in Kenya by the government and development partners to assist small businesses in obtaining the funding they require to grow. One such program that attempts to lower the credit risk that lenders encounter when working with small enterprises is the Credit Guarantee Scheme for SMEs, which is run by the Central Bank of Kenya (CBK).

The Advantages of Credit Guarantee Programs for SMEs

Greater Credit Availability

CGSs’ main advantage is that they facilitate SMEs’ access to credit. CGSs give lenders the assurance they need to grant loans for companies that might have otherwise gone unnoticed by assuming a portion of the default risk. This makes it possible for small enterprises to get the capital they require in order to develop, add staff, make technological investments, and broaden their operations.

Reduced Need for Collateral

The need for collateral is one of the biggest obstacles SMEs encounter when trying to obtain loans. A lot of small business owners just lack the assets that banks need to provide a loan. Because the scheme’s guarantee relieves the lender of part of the risk, CGSs sometimes lessen or do away with the requirement for substantial collateral. Because of this, small firms can now obtain loans with more lenient terms, allowing them to expand without being constrained by the requirement to pledge assets.

Promoting Lending to Riskier Markets

Many SMEs, especially those in the unorganized sector, find it difficult to submit the financial records that banks need in order to approve loans. By providing a safety net to lenders, credit guarantee programs assist reduce the perceived risk of lending to these companies. This promotes financial inclusion by encouraging banks and other financial institutions to lend money to businesses they might otherwise view as too risky.

Facilitating the Growth of Businesses

Small businesses hoping to grow may find that having access to funding through CGSs changes everything. SMEs can increase their market reach, scale up production, recruit more staff, and invest in new equipment with the extra funds. This contributes to general economic growth by increasing the company’s profitability and generating job opportunities.

Encouraging discipline and financial literacy

Numerous credit guarantee programs are made to help SMEs manage their money more effectively by offering them assistance and training. This can involve assistance in creating the required paperwork to obtain credit, loan repayment management, and financial literacy initiatives. Businesses who receive this training are better able to manage their money and build their credit, which can help them get future funding without the need for guarantees.

Credit Guarantee Programs’ Effects in Kenya

The expansion of SMEs in Kenya has benefited from the implementation of CGSs. For example, since its introduction in 2020, the government’s Credit Guarantee Scheme has given SMEs billions of shillings, helping them to withstand the financial hardships caused by COVID-19 and other interruptions. Businesses in industries including manufacturing, agriculture, retail, and services have benefited most from the program since it has made loans more accessible and required less collateral.

Additionally, CGSs can support the financial system’s general stability. Financial institutions can diversify their holdings, lower their risk exposure, and contribute to economic stabilization by promoting more responsible lending practices. Since profitable small firms create jobs and contribute to national GDP, the advantages of loan guarantees can also help the larger economy.

Difficulties and the Future

Credit guarantee programs have drawbacks despite their potential. Making sure that these programs are long-term viable is one of the primary issues. The program may become financially costly and lose its efficacy if the default rate on loans insured by the government or other financial institutions is very high. Furthermore, since many SMEs are still ignorant of the opportunities available, there is a need for increased outreach and awareness regarding the availability of these schemes.

In order for credit guarantee programs to be really successful, efforts must be made to increase financial literacy, expedite the loan application process, and foster confidence between borrowers and lenders. Furthermore, cutting-edge systems that use technology to evaluate SMEs’ creditworthiness may aid in lowering entry barriers even more.

In conclusion

Credit guarantee programs have become an essential instrument for maximizing the potential of small enterprises in Kenya. These programs facilitate SMEs’ access to the funding they require for expansion, innovation, and job creation by lowering the risk to lenders. Initiatives that make financing more accessible give great hope for a more sustainable and inclusive economic future in a nation where SMEs make up the bulk of the private sector. These programs have the ability to empower small enterprises and propel Kenya’s economy to unprecedented heights as they develop further.

SME

A Catalyst for Kenya’s Economic Growth

by with No Comment Diary of an SME

Smart Funding for Small Firms

Small and medium-sized businesses (SMEs) are frequently praised in Kenya as the backbone of the economy because of their substantial contributions to the creation of jobs and the country’s economic growth. For many of these enterprises, access to financing is still a significant obstacle, though. In addition to easing this difficulty, astute finance techniques catered to the particular requirements of small businesses can promote innovation and long-term, sustainable growth in the nation.

SMEs’ Significance in Kenya

In Kenya, small and medium-sized enterprises (SMEs) comprise around 90% of all firms and make up approximately 30% of the GDP of the nation. They are vital to lowering poverty and improving livelihoods since they employ a sizable percentage of the labor force. Nevertheless, despite their significance, a lot of SMEs have trouble obtaining the capital required to grow their business, make technology investments, and access new markets.

Difficulties Obtaining Financing

SMEs face many obstacles that prevent them from utilizing conventional financial sources.

Lack of Collateral: A lot of small businesses don’t have the assets necessary to get bank and financial institution loans. This detracts from their appeal to lenders, who frequently place a higher priority on risk management than possible expansion.

High Interest Rates: SMEs may be discouraged from borrowing even in the presence of available funding due to the possibility that the cost of repayment would outweigh their ability to make money.

Limited Financial Literacy: Many business owners are ill-equipped to understand funding possibilities and make wise finance selections because they lack the requisite financial understanding.

Unreliable Cash Flow: Small businesses frequently face erratic revenue fluctuations, which make it challenging to adhere to repayment plans and discourage banks from extending credit.

Astute Finance Options
Funding options that are creative and specifically designed for SMEs are necessary to overcome these issues. The following are a few tactics that clever funding can use to boost growth:

Access to Peer-to-Peer Lending and Microfinance: Peer-to-peer lending platforms and microfinance institutions are able to offer more flexible terms and lower loans. For companies who find it difficult to meet conventional bank criteria, these choices can help bridge the gap.

Government Grants and Incentives: By providing grants, subsidies, and tax breaks, the Kenyan government can improve its assistance to SMEs. Small businesses can invest in expansion without the stress of large repayment expenses by lowering the financial load.

Venture Capital and Equity Financing: By attracting venture capitalists, SMEs can obtain the funds they require for growth without the immediate burden of repaying their investments. While providing essential capital, equity financing enables investors to partake in the success of the organization.

Crowdsourcing: With the help of digital platforms, entrepreneurs can raise modest sums of money from a big number of people through crowdsourcing. Through community backing, this not only gives financing but also aids in validating company concepts.

Financial Literacy Programs: Small business owners can be better equipped to handle their finances and make better financing decisions if training programs are put in place to increase their financial literacy.

Technology and Digital Solutions: SMEs can streamline operations by utilising technology for financial management. Better cash flow management solutions can be found on digital platforms, which can help firms show prospective lenders that they are financially stable.

Smart Funding’s Economic Impact

Kenya stands to gain significantly economically from the implementation of smart funding solutions for SMEs.

Job Creation: As SMEs thrive and flourish, they generate new employment possibilities, which lowers unemployment and advances the growth of the country.

Innovation and Competitiveness: Small businesses that have access to capital can invest in R&D, which fosters innovation and increases their ability to compete in both domestic and international markets.

Economy diversification: By assisting a wide range of SMEs, reliance on certain industries can be lessened, making the economy more adaptable to shocks from the outside world.

Higher Tax Revenue: As SMEs expand, their share of the tax base rises and the government has more money to spend on infrastructure and public services.

In summary

To fully realize Kenya’s economic potential, smart financing for small businesses is crucial. The nation can promote a vibrant entrepreneurial ecosystem that stimulates growth, innovation, and job creation by addressing the financial obstacles that SMEs encounter and offering customized funding options.

Kenya can lead the way towards a more successful and inclusive economic future if stakeholders—including the government, financial institutions, and entrepreneurs—cooperate to put these strategies into practice. Investing in small firms today will return enormous dividends for the nation tomorrow.

 

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Is Your Company Thriving or Surviving?

by with No Comment Diary of an SME

                                                        Key Indicators to Consider

Long-term success in the fast-paced, constantly-evolving business world of today depends on knowing if your firm is thriving or just surviving. Although overcoming obstacles is a part of both stages, thriving requires a different perspective and set of skills than just getting by. These are some essential metrics to assist you in evaluating the state of your business and making future decisions.

Differentiating Between Surviving and Thriving

A flourishing business exhibits expansion, creativity, and adaptability. It actively looks for new opportunities and adjusts to shifting market conditions, promoting a continuous improvement culture. Signs of a successful business include:

Consistent Revenue Growth: Consistent gains in profitability and sales are indicative of sound company practices and a dominant market position.

Employee Engagement: A positive workplace culture is indicated by high levels of employee satisfaction and retention. Businesses that are doing well provide opportunities for professional growth and acknowledge employee accomplishments.

Customer Loyalty: A foundation of devoted customers who support your brand is an indication of a well-fitting product for the market and efficient customer service.

Innovation: To keep ahead of the competition, thriving businesses place a high priority on innovation and are constantly creating new goods, services, or procedures.

Getting By

Conversely, a thriving business frequently faces stagnation or downsizing. It might respond to problems as they arise rather than proactively solving them. Indices of a business that is barely scraping by include:

Flat or Declining Revenues: Sales stagnation may be the result of oversaturation of the market, poor marketing tactics, or a failure to adjust to changing consumer demands.

High Employee Turnover: A high turnover rate can indicate low morale or insufficient support for staff members, which can result in a loss of productivity and institutional knowledge.

Reactive Approach: Organizations that respond to problems without having a well-defined plan frequently get caught up in a never-ending crisis management loop, which impedes long-term expansion.

Limited Innovation: A company may be exposed if it does not invest in research and development, as seen by the absence of innovative goods, services, or procedures.

Evaluation of Your Business’s Health

If you want to know if your business is surviving or prospering, think about doing these steps:

Examine financial data

Look at the trends in your cash flow, profit margins, and revenue in your financial statements. Do your data show a steady increase or do they show any fluctuations or declines? Good financial standing is a sign of a successful business.

Assess Worker Satisfaction

To find out about staff morale and engagement, organize meetings or administer surveys. A flourishing work environment is frequently correlated with high levels of dedication and satisfaction.

Examine Client Input

Examine consumer evaluations, comments, and retention rates. Are clients coming back and endorsing your goods or services? A prosperous business is evidently shown by strong client loyalty.

Analyze Innovation Initiatives

Analyze the time and money your business devotes to innovation. Do you consistently offer fresh concepts and enhancements? Businesses that are successful are always pushing the envelope.

Techniques to Help You Go from Surviving to Thriving

If your business is just getting by, you might want to think about putting these tactics into practice to encourage expansion and creativity:

Establish Specific Objectives: Set SMART (specific, measurable, attainable, relevant, and time-bound) objectives that correspond with your future vision.

Invest in Talent: Give special attention to selecting, developing, and keeping staff members who share the culture and values of your business. Growth requires a motivated staff.

Accept Change: Foster an environment that values innovation and change. To spur growth, promote experimentation and the ability to learn from mistakes.

Strengthen Customer Relationships: Create enduring bonds with clients by providing them with individualized attention, clear communication, and prompt assistance.

Leverage Data: Make use of data analytics to find new growth prospects, spot patterns, and guide decision-making.

In summary

Setting the course for your business’s future requires knowing if it is surviving or thriving. Through the evaluation of critical metrics and the application of development plans, you can make the shift from simply existing in the current competitive environment to actually flourishing. Recall that prosperous businesses actively shape change rather than just reacting to it, benefiting their staff, clients, and communities in the process.

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Getting Around the Start-up Scene

by with No Comment Diary of an SME

                         Actions Kenyan Entrepreneurs Can Take to Increase Success

Kenya’s start up scene is experiencing rapid growth due to a strong sense of entrepreneurship, a rising support network, and innovation. But succeeding in the start-up world takes more than simply a brilliant idea it also takes careful planning, flexibility, and a thorough grasp of the industry. These crucial actions are important for Kenyan entrepreneurs who want to increase their chances of success to think about:

Recognize the needs of the market

Do Extensive Market Research: It’s Critical to Know Who Your Target Market Is. Perform in-depth market research to pinpoint opportunities, client demands, and new trends. To obtain insightful information, make use of industry publications, interviews, and surveys. In Kenya, this could entail determining the main rivals, comprehending the unique requirements of various areas, and analyzing regional customer behavior.

Verify Your Concept: Consult potential clients to validate your start up idea before committing entirely. Pilot testing, focus groups, or the introduction of a minimum viable product (MVP) are some examples of this. Real customer feedback guarantees that there is a true market for your good or service and helps you enhance your concept.

Create a Robust Business Plan

Make a Comprehensive Business Plan: Your vision, goal, market analysis, financial predictions, and growth strategy are all outlined in a strong business plan. It is essential for drawing in investors and acts as a plan for your firm. A well-organized company strategy can also assist you in navigating Kenyan funding opportunities and regulatory constraints.

Define Your Objectives and Milestones: For your start-up, set SMART (specific, measurable, achievable, relevant, and time-bound) goals. Divide these into attainable benchmarks so that you can monitor your progress and maintain concentration. Review and modify your goals frequently in light of performance and market developments.

Assemble a Robust Group

Put Together a Skilled Team: Encircle yourself with knowledgeable and driven individuals. Seek for people who can provide a variety of skills and abilities to the table. Having a solid team is crucial to growing your start-up and conquering obstacles.

Encourage a Positive Work Environment: Establish a cooperative and encouraging work atmosphere. Promote candid communication, offer chances for career advancement, and acknowledge accomplishments. Productivity and retention are increased by a positive corporate culture.

Obtain Sufficient Funding

Examine Your Funding Options: For entrepreneurs, finding funding can be a significant obstacle. Investigate a range of funding options, such as crowdsourcing websites, government grants, angel investors, and venture capital. Start-ups in Kenya might receive financial support from entities such as the Youth Enterprise Development Fund and the Kenya Industrial Estates (KIE).

Create an Eye-Catching Pitch: Create an engaging pitch that emphasizes your financial projections, market opportunity, and value proposition. Adjust your pitch for various audiences and practise delivering it with assurance. You can get the money you need by attracting investors with an effective pitch.

Make Use of Innovation and Technology

Accept Technology: Make use of technology to improve productivity, expand your customer base, and streamline operations. Invest in digital platforms and technologies that suit your company’s requirements, such as e-commerce, data analytics, and customer relationship management (CRM) systems.

Encourage Originality: Promote an innovative culture at your start-up. Keep up of market developments and technology breakthroughs to spot new business prospects and outperform the competition. In a congested market, innovation can spur growth and set your firm apart.

Pay Attention to Customer Experience

Provide Outstanding Customer Service: Establishing a devoted clientele requires offering top-notch customer service. Put the needs of your customers first by responding to their comments, taking quick action to fix problems, and going above and above. Positive client interactions encourage referrals and repeat business.

Establish Robust Connections: Use a variety of platforms to interact with your clients, including social media, email newsletters, and neighborhood gatherings. Developing trusting connections increases brand loyalty and improves your understanding of customer needs.

Handle Legal and Regulatory Obligations

Recognize Local Laws: Become familiar with Kenya’s legal and regulatory needs. This covers labour legislation, tax compliance, business registration, and industry-specific rules. Maintaining compliance reduces the risk of legal problems and increases trustworthiness with clients and investors.

Safeguard Your Intellectual Property: Protect your intellectual property (IP) by obtaining the necessary patents, copyrights, and trademark registrations. By preventing unauthorized use of your discoveries, intellectual property protection helps you keep a competitive edge.

Establish a Robust Network

Talk to Others in the Start-up Community: Through workshops, business incubators, and networking events, make connections with mentors, industry experts, and other entrepreneurs. Establishing a robust network offers beneficial assistance, guidance, and joint venture prospects.

Seek Guidance: Seek out knowledgeable mentors who can guide you, offer insights, and assist you in overcoming obstacles. Mentorship can play a key role in improving your start-up’s growth and business strategy.

Keep an eye on and modify performance metrics

Track key performance indicators (KPIs) frequently to evaluate the success of your start-up. To find areas for improvement, examine financial data, customer reviews, and operational effectiveness.

Be Adaptable and Flexible: The start-up environment is ever-changing. Be ready to modify your plans in response to shifting consumer demands, market trends, and new possibilities. Resilience and flexibility are essential for sustained success.

In summary, it takes a combination of market knowledge, strategic planning, team building, and agility to maximize success as a start-up entrepreneur in Kenya. Kenyan business owners may successfully negotiate the difficulties of the start-up environment and seize chances for expansion and innovation by following these guidelines. Start-ups can prosper and have a big impact on Kenya’s changing business environment if they have the correct strategy, perseverance, and value delivery as their main priorities.

Do Local Supermarkets play a significant role in Uganda Economy

Do Local Supermarkets play a significant role in Uganda’s Economy?

by with No Comment Business ideaDiary of an SMERetailThe business of SME

Toward the end of June 2023, the Uganda Manufacturers Association organized a dialogue aiming to bridge market information gaps between the producers and distributors and forge ways of promoting the uptake of locally manufactured goods by the local market.

The dialogue was attended mainly by manufacturers, supermarket owners, UMA staff, representatives from the UNBS-Quality Standards Bureau, Uganda Revenue Authority, and the Chief Guest from the Minister of State for Industry.



According to Mr. Tindiwensi, who is both a trader and chairman of the Uganda Supermarkets Owners Association (USOA), Supermarkets entered Uganda’s economy in the late 80s and early 90s these included supermarkets such as Metros Cash and Carry, others from South Africa. Over the years, Uganda started to register more and more supermarkets such as Uchumi, Nakumatt, and Turskys originating from Uganda’s neighboring countries. Most of these have since left the Ugandan market. The most recent and only operating one is Carrefour.

During the same period of their operation, several Uganda businesses also set up supermarkets. 

The rebirth of supermarkets in the late 80s and 90s resulted from the favorable investment climate at the time coupled with the growth of supermarket demand factors such as rising urbanization, increasing middle class, and the growing population of employed women. Why? Because the women population forms the reservoir for consumers that come to supermarkets found in the urbanized community and middle-class and emancipated women.

Whereas the foreign supermarkets have since closed shop or exited the Ugandan market, the Ugandan-owned ones are still around. They may struggle to stay afloat but cannot flee because this is home.

These local supermarkets form the USOA, an association that brings together about 60 supermarkets with over 100 store outlets spread across the country, with a noted number of its members in the Kampala metropolitan area.

USOA was founded and formerly registered with URSB in 2020 and is embarking on recruitment of as many and more local supermarkets that meet the requirements.

Uganda Supermarkets Owners Association’s mission is to set good quality standards to promote a good and positive image of supermarkets in Uganda, generally protect consumers, and look out for the overall business interest of its members.



Who are the local supermarket customers?

Most of Uganda’s supermarket customers are mainly younger and more educated consumers who earn medium to high incomes. They own assets such as refrigerators, cars, and big houses that facilitate the purchase in large quantities from supermarkets because they can store especially food items. 

This profile of consumers in Uganda is not different from any other economy like in Uganda. Supermarket consumers rank product quality, fresh food quality, safety, variety transparency, and customer service higher than other retail outlets such as shops time and gain called dukes and open roadside markets. 

According to Mr. Tindiwensi, he firmly believes that this is what will drive BuBu, which was a central point of discussion during the dialogue. The focus is that every consumer good manufactured in Uganda should aim at having a space on the supermarket shelf and having it stay there. USOA comes into the picture to drive toward attaining the BUBU objective.

Thus, as USOA, the objective is to provide forums for engagement, a united voice of advocacy, and promote good business relations and interaction and exchange with other business associations.

USOA will also help collect information, process, and extend it. They will also manage relations with the government to promote quality service, professional business practices, and capacity building for the members.

Supermarkets fall under the services sector of Uganda’s economy. According to the financial report for the Year 2022/2023, Supermarkets in Uganda have heavily contributed to the growth recovery of Uganda’s economy. Out of the 4.5% achieved, supermarkets contributed 2.5% of it.

Supermarkets are major off-takers of agricultural products. They are also big off-takers of industrial products. 

Supermarkets are accredited with the acceleration of Uganda’s industrial development because they link the manufacturers with the consumers. The linkage is very fundamental. Everywhere you go in our society, every producer or manufacturer aims to access supermarket shelves. 

It is assumed that if a Manufacturer’s product cannot stay on the shelf of a local supermarket in Uganda, chances are likely that it will not survive on the shelves elsewhere.

As a result, they endeavor to support micro, small, and medium enterprises by getting their products to a broad and more affluent market, by skills sharing, helping them have their products certified and most importantly, formalizing their businesses.

Despite all the efforts made by all the local supermarkets, the manufacturers also had some issues to raise against the supermarkets whom they rely on for business. 

They called these the 9 Pain Points;

  1. Long credit sales settlement: The bigger the supermarket, the longer the waiting period

  2. Advanced payment of products: No supermarket pays upfront; you need to wait until total sales.

  3. Unreliability and credibility of supermarkets: Some supermarkets tend to close within six months of working with them and are left to suffer losses.

  4. Foreign-owned supermarkets never want to buy local products.

  5. Consumer perception about locally manufactured products: Consumers tend to think that locally manufactured products are inferior.

  6. The exploitation of local manufacturers by the local retailers: in most cases, they want high profits and squeeze the selling price up to a level that manufacturers are left with cents.

  7. Some Supermarket procurement teams solicit bribes from suppliers.

  8. Delay of products on shelves: Manufacturers are greatly affected by having to make replacements. This may not be the case with suppliers from Kenya who might not face the same consequences. The losses are a little massive on the part of the local suppliers. Devise ways of how to support each other. For instance, if there is a local product and an imported one, sell the local product first so that the local manufacturer is not much affected.

  9. The complex application procedure in supplying big supermarkets: It is verifiable that there are situations that some manufacturers have to undergo with multinational supermarkets. Before you can get your products on the market, the manufacturer undergoes a tedious approval process.

Since we are in the same room, we agree on the basic requirements expected of the local supplier, keeping in mind that they both operate in the same environment and are aware of the different challenges in particular power and transportation costs before delivery.

With USOA in place and the frequency of dialogues like this, the nine challenges mentioned above would be addressed.

Business owners and supermarket Owners were encouraged to interact and strengthen their business relations and participate fully to enrich the efforts towards the realization of the BUBU agenda.

shoe maker image

THE SHOE SALESMAN 

by with No Comment Diary of an SMEThe business of SMEThink about it

I just read this story and loved how ATTITUDE can change the lives of people and companies. Maybe this story will give you some stimulus too. 
At the beginning of the 20th century, an English shoe manufacturer was concerned about the drop in sales in England and decided to try to open new markets abroad. Its director called two of its salesmen and proposed they travel to Africa to promote trade and increase their sales.
Both salesmen left by boat for Africa with instructions to survey the market. Each of them would go to a different country to have two opinions about the potential of the African market.
Within days of arriving, the first salesman called the factory owner, informing him that after several days of visiting cities, he had concluded that the African potential for shoe sales was null. “Boss,” he said, “here they all go barefoot. No one wears shoes. We are not going to be able to sell a single pair of shoes.”
The next day the second salesman called. He was excited and eager to speak to his boss. “Boss,” he said. “It’s fantastic. No one here wears shoes. No one sells shoes. We are going to sell thousands of pairs…”
The boss became delighted, making him collect more stock. Now the business started, it attracted a lot of customers to buy shoes. They faced difficulties and problems in selling their products as a company communication breakdown, leading to price differences and left customers dissatisfied because of miscommunication portraying them as corn salesmen. Two, business losses led by poor organization and differences in shoe prices.

GS1 standards can provide a framework and solutions to improve these issues through improved communication, streamlined processes, and enhanced supply chain visibility
Communication breakdowns and miscommunication:
With GS1-compliant identification and communication methods, companies can accurately exchange product information with trading partners, reducing the likelihood of miscommunication or errors in pricing and product descriptions.
Price differences and customer dissatisfaction:
GS1 standards help establish a common language for product identification, allowing retailers and suppliers to accurately track and manage inventory. This reduces the chances of discrepancies in product pricing and ensures that the right products are available at the right prices in different sales channels. As a result, customers are less likely to encounter price differences or receive incorrect information, leading to increased satisfaction.
Business losses and poor organization:
GS1 standards promote efficient and standardized business processes, such as using Global Location Numbers (GLNs) to identify business locations and Global Data Synchronization Network (GDSN) to synchronize product data. By implementing these standards, companies can improve their supply chain visibility, optimize inventory management, and reduce operational inefficiencies. As a result, businesses are better organized, reducing the risk of losses due to inventory mismanagement and other operational issues.
Differences in shoe prices:
GS1 standards for product identification, such as GTINs, allow for unique product identification across the supply chain. This helps prevent confusion between similar products and ensures consistent pricing for specific shoe models, regardless of the sales channel. Retailers and manufacturers can use GTINs to accurately identify and price their products, avoiding discrepancies in shoe prices.
GS1 standards provide a comprehensive framework for product identification, data sharing, and supply chain management. By adopting GS1 standards, companies can enhance communication, reduce miscommunication, improve supply chain efficiency, and provide a better customer experience, ultimately leading to increased profitability and success.

juakali

Keeping the Jua Kali sector in the digital space

by with One Comment Diary of an SME

SME BIO: Catherine Gichunge is a technical analyst and consultant for mobile payments and supports end to end implementation of deployment of mobile money platforms. She is a member of the MPESA pioneering team.
Catherine is the founder of Red Ant International and Bella Organics

Rent Ant International

There are 44 million people in Kenya, and this number is growing at 2% per annum. 40% of Kenyans are unemployed, while 70% of Kenyans are below 30 years of age. 72% of the population is rural-based.
Many Kenyans have excellent skills having undergone training in the numerous universities and polytechnics across Kenya. Employers mainly focus on academic qualifications and not necessarily skills. These corporates employ qualified Degree or MBA holders.

The Red Ant Directory is a service for all Kenyans in the Informal Sector and covers Kenyans of lower academic qualifications but are highly skilled in the Jua Kali Sector. It makes it easy for Kenyans with special skills to access employers by advertising their skills on our website through a simple registration process.
We aim to enable ordinary Kenyans to reach potential employers easily without having to travel long distances to get to the city, and thereby revolutionize the way Kenyans at the bottom of the pyramid sell off their skills and items finally bringing together employees and employers and cutting the percentage of unemployment drastically to achieve better social-economic status.

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Bella Organics

The founder tripped and fell and hurt her arm. A Nigerian colleague rubbed the arm in some funny strong smelling oil. She was stunned when her arm was okay in a few days, what could have taken longer. She enquired about it and was told about the wonders of Shea. She asked for more of it and used it on her skin. She used it on her daughter.

“The Shea was organic so I was not worried about allergies.” Her daughter’s eczema cleared. Catherine was sold, hook line sinker. She ordered 10 kilogrammes and brought it to Kenya. And thus Bella Organics was born.
“Kenyans don’t know much about the benefits of shear butter because we don’t have the tree that produces the nut that makes shea butter. We know more about the coconut.” The Nigerian Shea has healing properties and incidentally is not as commercialised as other butters.

Bella Organics procudes and packages the raw organic product for skin and hair care. They also specialise in other complimentary natural beauty products such as Black soap powder (Dudu) Camwood (Ossun), Dudu Ossun – a combi of all plus black soap bar – Cocoa Butter, Bentonite Clay, and Chebe powder.
“These products heal the common skin conditions such as acne, eczema and also act as a sun protector.” Catherine says and adds, Kenyans generally do not bleach and most have natural skins. The only hitch is sun burn because we also do not use sunscreen and so you find many people with dark patches especially on forehead because of sun burn.” In this regards, Catherine demonstrates the healing power of Bella Organics.
“Bella Organic’s Shea butter in its raw form has PSF 10, a natural sun screen. We use a combination of Black Soap powder and Shea to achieve both the healing of sun burn and the protection against the same.”
The entrepreneur has a demo centre, a store in Westlands where she offers her customers a free facial and consultation.
“We call our products a Magic Pack because; nature has simply provided everything under these natural nuts and seeds.
Pure Shea butter has a distinct scent, which disappears within minutes of applying once exposed to air. However, for her customers who would prefer other scents, Bella Organics comes in a variety of them, including vanilla, eucalyptus and peppermint.

“We usually advise those customers with skin conditions to start with the raw Shea butter for healing first before using the one with added scents.”
Extensive research on the components and benefits of shea butter is yet to be done but, Catherine, with her training in food sciences uses her background to formulate products with the right ingredients.
“Nature has provided for everything. Some of our customers have reported added benefits that we did not know about such as stronger nails.”
The entrepreneur says that the profit margins are not as great as they would be if they were to use additives for mass production.

“We are keen on introducing our customers to natural products that heal without harm. This means that we can only offer our products in their purest form.” They deliver countrywide and through word of mouth, they have orders in other countries, including Europe.

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How does GS1 support a business like Bella Organics?

  • Traceability, assurance of genuine product, to beat counterfeit.
  • Provision of identity through barcoding and for resell in supermarkets and cosmetic retails chains.
  • Offer training and support about traceability.
  • Print and digital publication that offers members advertising space at an affordable rate as well as exposure.
  • Free updates, and information on the GS1 standards and developments both locally and internationally.

To experience Bella Organics, visit New Westlands County Market, Woodvale Groove, Westlands, store no. C43 on 2nd floor or contact them through their online pages.