Teaching Buisness Skills

Joanna Teaching at Kikaaya Vocational School, September, originally uploaded by amanda.milholland.

By Joanna Williamson

On arrival Sam took me around a number of the businesses here in Kikaaya and Bulenga. Conversing with the women running the businesses I found that few, if any, made any attempt to keep books on expenses or sales. Many businesses were selling their products at minimal profit. Few had any idea what their total expenses amounted to. For some of the women, when their business was short of cash flow, their husbands (if they had one) would give them extra cash to cover business expenses. This makes it very difficult to see which businesses are even potentially profitable, let alone which businesses are profitable. For all the women I spoke to there was no differentiation between business and personal expenses and income. When there is no cash, women often take out a loan at a high interest rate putting there businesses and homes at risk. Paying back theses loans puts further strain and increases the running cost of the business. Sometimes these loans are not for business expenses but for personal expenses such as school fees. Production methods are not improved, the low profit margins remain and, with it, poverty.

One example of the above is a woman who is making baskets. When she came to class we looked at the cost of all the materials required to make the baskets. Then we looked at the price she sells the baskets and the number of baskets she is able to produce and sell each week. At maximum production capacity she is making a weekly profit of 850 shillings (just under $.50). This will cover the cost of one meal.

Another example is a woman with chickens who is selling eggs. When looking at all the expenses, the number of eggs produced and sold, the price and, therefore, average monthly income, we found that the woman should be making a profit of 70,000 shillings per month (this is after personal expenses). Yet this same woman is not able to save any money. Either she is being unrealistic about her actual personal and business expenses and/or income… or the lack of budget management is leading to over-expenditure. This same woman has just had to take out a large loan to cover school fees for her children.

Other than basic budgeting, a key area I chose to work on was to try and teach people “how to think”. We take it for granted in our western schools that we learn analytical and creative thinking skills. We are brought up culturally (rightly or wrongly) to question everything. Our minds are trained from a young age to analyze situations and look for better solutions. Here in Uganda the school system appears to still focus on learning through repetition and memorizing “facts.” I apologize for my accusation if this is not the case. I have only been here for one month and can only talk from my impressions during this short time. My impression is that memorizing what the teacher tells you is the most common learning method. In western schools, on the other hand, we will read passages by 2 or more different authors of the same event and are than asked to analyze and form our own opinions giving justification for why we have come to our conclusions. It cannot be underestimated how this affects the students’ ability to set-up and run successful and profitable businesses.

Firstly, finding an idea for a good business requires questioning our surroundings: What is available? What could be? Is there a potential market for a product? Would the potential customers be able to afford and be prepared to pay a price which would give the product a good profit margin? How much competition is there? What would be the product’s unique selling point? There are many more questions an entrepreneur needs to think about even at this early “idea stage.” My early impression here is that most people tend not to attempt to come up with new ideas or even to improve current businesses ideas. People tend to copy the “successful businesses” they see. If someone is doing well selling charcoal, everybody wants to sell charcoal, and to the point that competition eliminates/minimizes the profit margin.

Even if someone does have a great idea, where do they get the money from to make it happen? There is a severe lack of capital. To make matters worst money lenders take advantage, only offering loans at crippling interest rates that make it very difficult to get a new business up and running.

Low self-esteem also affects a person’s ability and willingness to take risk and come up with new and exciting ideas. From my short time here my impression is that we need to help teach and encourage creative and analytical thinking to facilitate the ability of people to come up with business ideas, to research the idea’s potential and to ultimately improve the ability to run successful businesses. It is not only a matter of learning how to budget, but demonstrating the advantages of budgeting, the advantages of forward planning, showing people how marketing, improving selling skills, customer service, analyzing production methods etc… can improve profitability. Low self-esteem appeared to hinder my students as they constantly looked to me for all the answers and don’t seem to trust their own opinions and their own ability to analyze their business/idea.

Donations toward teaching materials, books with ideas and exercises to help teach/encourage critical thinking, new business ideas, budgeting, book-keeping, selling skills and marketing would all be a great help to KACCAD. In the future it would be great to have a pool of money that KACCAD could have to give small micro-loans at affordable interest rates to students who have good, well planned business ideas. Essentially this would also require a full-time, long term volunteer/employee to teach business/entrepreneurship and administer the business loans/donations giving continued support to recipients.