Cash Flow

Tips for Managing Your Cash Flow

Tips for Managing Your Cash Flow

For fast-growing businesses, seasonal businesses, and businesses that may be cyclical, cash flow management is a critical skill that business owners need to know

Here are four tips for managing your Cash Flow

  1. Get invoicing right.

Speed up your cash inflows by delivering your invoices quickly so that you receive faster payment from your clients. Consider investing in automated invoicing such as point of sale machines so that you can improve your turnaround times and minimize delays in sending invoices.

  1. Keep your financial records up to date.

Updating your financial records can help you gain a clear insight into your business’s financial health, which will give you a more precise foundation to forecast your future cash flow, make important decisions, and plan for high and low seasons.

  1. Build a cash reserve you can rely on in tough times.

Building a cash reserve is very important, and it can be done once you hit the break-even point. Businesses face highs and lows – having enough cash to fund your working capital needs can be critical for its continued survival during a low season business.

  1. Liquidate cash that may be tied up in outdated assets or overstocked inventory.

Businesses sometimes have unused equipment, outdated assets, or too much inventory, all of which can be put to better use as income. Regardless of whether you sell below initial value, liquidating assets that will not be utilized can contribute to a healthy cash flow.

Consider implementing these strategies to improve cash flow management in your business.


Strategies for Managing Risk as an SME

Strategies for Managing Risk as an SME

Risk management involves making and carrying out decisions to minimize potential adverse effects of risk on a business. Failing to effectively manage risks can be especially damaging for small businesses with fewer resources and expertise.  With that in mind, here are five  strategies SMEs can use to manage risk in their businesses. 

Diversify your products or services. 

Offering a wider selection enhances customer satisfaction, create new income streams, and give you an edge over your competition. For example, if a tech shop selling mobile phones starts providing repair services – this can turn one-time customers into regulars

Educate yourself about the law. 

If you understand the laws surrounding your business, you can avoid potential roadblocks in the future. For example, if, if you enter a contract with another business, it’s important to understand the terms and consequences of violating this contract. Even small violations here can lead closure of your business by governing authorities

Keep clear, transparent records.   

Keeping clear records of important transactions like sales and tax payments reduces the risk of loss of income, conflict with clients, or fraud. Staying organized with paperwork also allows you to monitor your finances. For example, if you’re operating a clothing business, you can determine which products generate more income, enabling you to make decisions on which products to focus on.

When you need financing, acquire business loans from a formal, transparent source.  

Do your research and partner with a financial institution that you can trust. This means making sure that the repayment amounts, interest and fees are transparent. Informal sources like moneylenders usually have hidden costs and high interest, that increase your risk of default.

If possible, invest in insurance. 

By investing in insurance relevant to your business, you can avoid the costs of an unforeseen event. For example, a restaurant business opting for fire insurance. However, as insurance policies have exclusions, consult with an insurance broker to explain what is and what is not covered by your business insurance.

Training opportunity for young women and girls in entrepreneurship skills: Smart Girl Team Leader, Jamila Mayanja, tells us more.

Training opportunity for young women and girls in entrepreneurship skills: Smart Girl Team Leader, Jamila Mayanja, tells us more.


Charity M Namala: Good Morning Jamila, happy to speak to you today. Could you please tell us about yourself and what you do? 

Jamila Mayanja: Thank you. My name is Jamila Mayanja, a social entrepreneur. I am the founder and team leader of Smart Girls Foundation Uganda, a social enterprise that empowers girls and women to lead a healthy and economically sustainable lifestyle. We support the girls to develop and positively give back to their communities. Under our tools program we train young women and girls in carpentry, welding, mechanics, electrical installation, and house painting. We provide mentorship to startups, office space, matchmaking, and market access. Our STEM program offers carrier guidance to girls in school to study well. We also allow a few young boys and men to benefit from our initiatives.


Charity M Namala: Could you please tell us how the young women you work with fared during the pandemic – and some testimonies on how they have been able to survive and thrive? 

Jamila Mayanja: The pandemic affected many young women, especially the startup up businesses that used up their capital during the lockdown.

We witnessed some businesses closing during this period, but also other innovative businesses were able to survive. We kept in touch with many businesses that we guided to rethink their business models to overcome the pandemic challenges. For example, the ladies in our tailoring class started making cloth face masks when the pandemic hit; this enabled them to survive and also get support from outside their business. These ladies expanded their business and were able to get contracts to do face masks for the US Embassy, National Water, and other clients, thus boosting their incomes. Another business that survived was one that bakes cookies, which started delivering cookies to homes that wanted snacks from outside of their home. We also have a   business that does gift sprays which adjusted their model to do small surprise gift hampers/packages delivered to families during the lockdown for emotional healing. We advised most businesses to use social media for advertising, marketing, and taking orders. For the businesses that closed, we also kept in touch with them, advising on other available options to pick up and start again.


Charity M Namala: Thank you so much, Jamila. How do you recruit the young girls, and what is the duration of the training programs?

Jamila Mayanja: We recruit young girls from schools and those out-of-school in the communities.

For the schools, we inform the school administration about our programs, and they give us access to the students. We reach out to the out-of-school girls through partnerships with the community leaders. In the schools, we teach the girls how to make reusable pads, recycle plastic, make bags, and give them these bags with some educational material. The girls in candidate classes also get solar recycle bags to enable them to read (at night) for the final exams (given the electricity challenges in some areas in the country). These programs give motivation and a reminder to the girls that education is essential.

The training we conduct is under our Girls for tools program, where girls learn skillsets for three months. We recruit 150 girls who learn the different courses such as, tailoring, mechanics, electrical installation, including business and computer skills. After the three months of training, we follow up with the participants for a year and support them to look for startup capital and startup tools. If they successfully set up and employ other young people, we [graduate them from the program to continue independently]. However, if they still want our services to guide them on how to grow their businesses [further], that’s when they join our Business girl magic program at a small cost. The Business girl magic program is the corporate part of the Girls for tools program for young ladies who are already making some revenue in their businesses.


Charity M Namala: As a social entrepreneur, how have you fared during the pandemic, and what lessons can you share with us?

Jamila Mayanja: As an entrepreneur going through the pandemic has not been easy.

But because of my passion and innovation, I devised ways to survive during this period. I started to aggressively sell our products to enable us to invest the sales income in the business. We embarked on fundraising and got funds that helped in running some of the business activities. For the girls, who we trained that managed to make and sell masks, bags, and other items, they gave a percentage of their profit back to our work. We also came up with means of skilling the girls at a low cost to minimize our expenses without compromising quality.


Charity M Namala: What can be done to increase the participation of young people in entrepreneurship? 

Jamila Mayanja: To increase participation of young people in entrepreneurship starts with our education system.

The pandemic has shown that our education system should change to be more practical and hands-on. The government should emphasize vocational training not to be looked at as a last resort when students fail at school. Many young girls in high school who come to the center to train don’t want to go back to school after experiencing our hands-on skills training. But we still advise them to go back to school because they need [high school education] too. We need to create more spaces where young people can be innovative, think, and blossom their creativity. In addition provision of friendly financial facilities that can help [young people’s] enterprises thrive in such dire situations.

Lastly, I cannot end without talking about the internet; it is critical for business growth today. During the recent internet shutdown, many young people struggled to get orders and make sales in their businesses, and we need not take this for granted. My final words to young entrepreneurs, especially the [young] women in business, is never give up, innovate, stay unique and be different at what you do.

Building the entrepreneurship infrastructure in universities to empower young entrepreneurs – Matthias Möbius, Co-founder StartHub Africa, explains.

Building the entrepreneurship infrastructure in universities to empower young entrepreneurs – Matthias Möbius, Co-founder StartHub Africa, explains.

Charity M Namala: Good Morning Matthias, It is a pleasure to have you today. Could you please tell us about yourself and your institution? 

Matthias Möbius: My name is Mathias Möbius. I studied Physics in Germany but was very active in the social entrepreneurship space. Later, when a few friends and I got an opportunity to further the entrepreneurship interest, we founded StartHub Africa in 2017 to build entrepreneurship infrastructure across universities in East Africa. The hub idea is to bridge the gap of non-systematic quality of entrepreneurship and innovation education within Ugandan universities. To achieve this, we partnered with several universities such as; Makerere University, Kampala International University, Kyambogo University, Islamic University of Uganda, Gulu University, Muni University, and Mbarara University of Science and Technology. At these institutions, we do a range of activities that enable students to develop innovative ideas for viable ventures.


Charity M Namala: What programs does your organization undertake to support the young entrepreneurs? 

Matthias Möbius: The organization undertakes two core programs to support young entrepreneurs.

The first program is Startup Academy that focuses on inspiration and exposure. This semester-long program conducted at our partner universities introduces the young people to a guided and practical way to start a venture and channels through the student clubs as an infrastructure for entrepreneurship. Weekly three hour training sessions also provide online content to students and through invitations, guest speakers come to inspire young people. The practical learnings we use include ideations, idea courses, and problem discovery programs where young people go to the field and understand community challenges. Afterward, we give participants training to take the following steps to implement the idea that they have on their minds. We specifically adopted a Five Thousand Ugandan Shilling challenge where teams are formed and start a business within a week with Five Thousand Shillings; UGX 5,000/=. This mindset activity pushes young people to the marketplace. At the end of the week, some returned with Twenty Thousand Shillings; UGX 20,000/= while others returned with One Hundred Fifty Thousand Shillings; UGX 150,000/=. With guidance, the participants come up with prototypes and finally participate in a university pitching competition. This approach builds a scalable pipeline of entrepreneurship support across the universities. Once or twice a year, a prominent national pitch event brings together the best teams and ideas from all the participating universities with a chance to win a prize money award.

The second program is Startup catalyzer which is a blend of incubation and investment. Here we identify startups with excellent ideas and solutions to significant problems but lack further guidance and practical experience. The program supports them on knowledge acquisition, prioritization, and business modeling to grow. Usually, mentors are available to advise these early-stage startups weekly for a year. At the end of the year, we then invest in them Four Million Uganda Shillings; UGX 4,000,000/= and currently, we have ten enterprises in this program. StartHub Africa continues to welcome innovative ideas from various sectors. We are now building up an online learning platform with tailored content and standardizing the processes to guide the startups better.


Charity M Namala: How have the startup enterprises you work with fared during the pandemic? Do you have testimonies of enterprises that have survived or thrived? What lessons can be adapted?  

Matthias Möbius: The testimonies and lessons on how startups have fared during the pandemic depend a lot on the sectors and business models. Overall, it has been extremely challenging for them.

Some young entrepreneurs had to innovate or change business models, while others just had to stop and wait for the pandemic to pass. For example, one enterprise providing health and wellness services using health and fitness facilities had to cease operations because the fitness facilities were closed during the lockdown. Similarly, for another startup in the educational space working with secondary schools, it closed when the schools closed. However, they later reconfigured and came up with a new product line called a whole learning science kit which was introduced to parents for children to use at home to build electronics devices such as torches and small robots.

Another startup is in the sports sector. Before the pandemic, they were building a sports movement by recruiting sports clubs in rural areas. They would get revenue from organizing sports tournaments, membership fees from the sports clubs, and through tournament sponsorships. These revenue streams were affected when sports activities stopped. However, after the lockdown ended, the sports activities resumed, and now they are planning for tournaments, with the first scheduled this February. They have also already signed up 120 members paying a membership fee of Twenty Thousand Shillings; UGX 20,000/= a fee payable thrice a year.


Charity M Namala: How can we increase the level of participation of young people in entrepreneurship?  

Matthias Möbius: There are a few viable ways to increase young people’s participation in entrepreneurship. However, we see some hindrances to involvement.

Inadequate funding is a hindrance, and as the saying goes, entrepreneurs are over-trained and under-funded – as seen across the board. There is an issue of low-quality entrepreneurship training that leaves no mark on the entrepreneurs which focuses on good marketing for products and services that are not ready for the marketplace. All these problems cause entrepreneurs to lose faith in entrepreneurship as a viable option.

As a result, participation can increase if the young entrepreneurs are shown the importance and relevance of entrepreneurship by helping them start something off and access early-stage investment finance. If taught clear and viable pathways, young entrepreneurs can build sustainable businesses instead of focusing on short-term growth and revenue. Finally, exposing young people to customers helps them understand their client’s needs. By understanding these needs, they can develop products and services that meet customer value.

Financial Training

How financial literacy training helped ATACO Country Resort thrive during covid.

he Covid-19 Business Info Hub spoke with Richard Twesige, the managing director of ATACO Country Resort, to learn how the Stanbic Business Incubator helped his business overcome the challenges caused by the pandemic.

Ernest Wasake: Describe your business and tell us a bit about yourself.

Richard Twesige: My name is Richard Twesige. I’m the managing director of ATACO Country Resort, which is a hospitality industry business that is located near the Tooro Kingdom Palace. We offer services like accommodation, and conference services.  Next year, we will have been in business for 20 years.

Ernest Wasake:  Why did you decide to participate in the training from the Stanbic business incubator?

Richard Twesige: I decided to participate with in the business incubator training because I believed the quality training that would help us at ATACO Country Resort transform itself from a purely family business to a more professional, structured hospitality business in the region. The class offerings were very precise and that’s exactly what we wanted.

Ernest Wasake: What were the main learnings from the Stanbic Bank Incubator Training that you have integrated into your business?

Richard Twesige: The entrepreneurial attitude training at the Stanbic Business Incubator helped us start planning and implementing more innovative ideas at work. We were able to look at our business with another set of eyes and implement dynamic skills that made us more fluid in comparison to our previous rigid business models.

Ernest Wasake: Are there any specific learnings from the training that the business incubator offered you that have helped you cope during COVID?

Richard Twesige: The financial literacy training helped us become dynamic with our finances in terms of how we spend, how we invest as well, and keep the business afloat.  So without those learnings, it would have been difficult for us to try and think outside the box.

Ernest Wasake: How has your business been affected and how have you coped during COVID?

Richard Twesige:  Some of the changes and decisions we had to make as a business were to cut as many costs as possible to maximize the income, that little income that we could get. For example, as a hotel, we could still deliver packed lunches. However, you still can’t have full occupancy. We have to leave a few rooms unoccupied because just in case you have a COVID patient or someone that we suspect has COVID, the guidelines require us to have some rooms vacant.

Because of these challenges, we really needed to cut as many expenses as we could. It was a good thing that we had done these trainings with the business incubator. We looked at different ways of leveraging what little we had and investing it into implementing sustainable strategies and technologies to help reduce on our utilities.

Unfortunately, we also had to let some of the staff go and keep others on a temporary basis. As we recovered and implemented more changes, we are slowly able to bring people back. However, right now, the changes are still in effect and we’re hoping to get back on track.

Ernest Wasake: What do you think the future of the tourism sector looks like in terms of what needs to be done to help the sector revive?

Richard Twesige: When all the borders were locked down, we still had our local tourists now to serve. We need to improve the road networks so that at least the local people can get to the natural places. Payments are also changing to entirely cashless. I believe the industry will revive faster because we have had digital payments for some time.

Implementation by some of the big telecom networks is really good. And also some of the workings of the financial institutions is really great. But there is another level to go because sometimes actually what is going to happen is that when industries like us start to adopt to these other situations like covid, you have to do cashless payments, there are other places that are really thinking about. As ATACO we could use a token system – such that as a guest, as you check-in and spend you, end up accumulating these kind of tokens that could be transferred into monetary value. So we’re looking into things like this now. And that is where I feel that the industry would go and the industry will revive faster because we have had digital payments in Uganda for some time.