A23.2 Small-scale businesses by ladies from urban vulnerable settlements in Uganda
small business owners in Kamwokya and Kyebando
2019
Outcome challenges with running a business
The challenges associated with running business in our area is the high cost of materials and high cost of renting an office or a venue.
Activites
The programme was set up to provide additional capital funds to small business owners in Kamwokya and Kyebando.
The capital fund is lent to the businesses with a 10% interest in a specified period. Businesses that return all money and interest can request an increase in capital borrowed. This is done until the business is able to self sustain and consistently earn the required income.
Action plan 2021
The RISE Hair Salons
The RISE Hair Salons shall be a chain of beauty shops that offer hairdressing, styling, cosmetology, and bridal services. The chain of saloons will be structured in and around the Kamwokya. The chain is established to give employment opportunities to the alumni of Chusa School of Beauty, Kamwokya. The chain is to be established as one of the activities that will help the Kamwokya adolescent girls programme to reach the intended impact. The saloons themselves will be financially sustainable, unlike the school.
Each salon will be managed by a group of five alumni students, each with a capable leader. The saloons/business will get coaching from the HR&S RISE Centre Uganda Accounting coach about bookkeeping and best practices in business management. In addition, the business will be supported by the Evaluation Planning coach to ensure that programme objectives are followed and the desired outcome is realized in a reasonable time. The Branding and Public relations coach will also support as well as the Survey management coach.
The Saloon staff
Five graduates per saloon, each with a saloon leader. Among the twenty one person has been elected President and one person vice president. These same two individuals will be trained by the HR&S RISE Accounting coach about bookkeeping and financial management. Also, all saloons will benefit from financial management workshops to ensure a smooth running of the business and ensure financial stability of programs.
Investment capital
RISE saloons seek to acquire investment capital funding to set up the pilot four saloons. HR&S always aim for quality standard and shall invest EUR 2,000 per salon. We also invest EUR 4,000 for two year coaching and auditing (Eur 600 per coach and auditor and Eur 1,000 for computer, cell-phone and internet), in total EUR 12,000 . The loan takers will sign a loan takers agreement and agree to repay back the loan after two years with 10% annual interest.
Loan Repayment strategy
A unit price of an average customer will be EUR 10. Assume 10 customers per week, 45 weeks per year. Total income per saloon and year EUR 4,500. Assume 1,200 is extracter per year for two years to pay back the loan with 10 % interest.
In order to ensure the financial success of the programmes, the girls are encouraged to fully utilize the rented space by adding other small businesses like soft drinks, mobile money etc in order to maximize incomes at the rented space.
Reinvestment
The ineterest is used to co-fund that cost of the RISE Centre and the paid-back capital to run more schools and set up more saloons.
Status report
31 Dec 2021
By Murungi Moses
Team-leader
Activities
In 2021, we focused our energies on the CHUSA Chain of Beauty Saloons projects. This was after COVID19 disrupted another program of supporting small-scale businesses in Kamwokya. Our partner Edward (Creative Arts) was running a school of beauty. The school sought support from HR&S, however, there were difficulties making it financially sustainable. The school targeted mainly adolescent girls out of school due to the closure of schools due to the covid19 lockdown. We decided that we would support Chusa School of beauty, but have a hair beauty salon running alongside the school, an enterprise that would guarantee financial sustainability. Once Action10 extended the EUR 2000, we opened up the salon with 5 alumni of the Chusa school of beauty. These 5 were entrusted with the responsibility of running of the saloon, as closely supervised by Edward. Action10 Invest loan took care of 3 months’ rent in anticipation that, by that time, the business would at least cover those expenses. However, this wasn’t possible. Another 3 months was covered, still with no evidence of financial sustenance. Reports from our partner blamed the situation on the inability to attract customers. However, my investigation revealed that our partner had turned the salon into the beauty school, that trained girls during weekdays and struggled to attract customers over the weekends. this was designed as so because I only used to visit the salons at weekends. they, therefore, were reporting falsely about what was being done. As a consequence of this, four of the five girls who were responsible for the salon completely abandoned it, since it wasn’t generating any income for them. It was clear therefore that the reason we were not attracting customers, why couldn’t meet our overheads was the saloon was non existent. Its image was destroyed beyond repair. I therefore decided to close it since we couldn’t approve another 3 month payment and capital boost in those circumstances. In December, I then decided to move the saloon to another place, now with one of the five students who was still remaining. The business was refinanced so that she could continue. Two months later, she was no longer working. All my attempts to establish her challenges were in vain. I later learnt that she got married and her husband was not comfortable letting her manage her own business. I have since collected all the remaining business assets and kept them at my place of residence until a suitable candidate can utilize them to generate an income.
Outcome
One of the five girls is now running her own salon upcountry.
Progress marker_Partnership
Score 1
Our partner formally ended his partnership with HR&S after we established that it was partly due to his actions, to dishonour our agreements about running of the salon, by turning it into a school that resulted in the failure of the project. This he did without any communication and he was dishonest in his reporting.
Lesson learned
- It is an unwise to attempt to offer solutions to a person in need. It is better for the solutions to come from the person themselves.
- It is better to support individuals who have business experience, who have started and are trying to make a business grow. These people have an internal motivation to ensure success of their enterprise and therefore appreciate value for money. Such people are more likely to be responsible than those who are not actively engaged in a business. They are also not likely to make business mistakes usually made in startups for example.
- It is better for HR&S to collaborate more with organizations who have no history of working with the Aid industry. We can form a parallel narrative.
Planning ahead for 2022
- We shall try to identify an entrepreneur who is in the business of hair saloons. That’s will be the person we support going forward. However, that entrepreneur must share our values and our vision as HR&S.
- We also hope to increase our RISE members portfolio. At the moment, we only have one underperforming RISE member and this affects our financial sustainability as the support centre.
- We are also looking forward to take advantage of all the webinars scheduled for this year.
RISE Hair Salons
2022
The RISE Hair Salons
RISE Hair Salons is a chain of beauty shops that offer hairdressing, styling, cosmetology, and bridal services. The chain of saloons is structured in and around the Kampala. The chain is established to give employment opportunities to the alumni of Chusa School of Beauty, Kamwokya. The chain is to be established as one of the activities that will help the Kamwokya adolescent girls programme to reach the intended impact. The saloons themselves will be financially sustainable, unlike the school.
Each salon will be managed by a group of five alumni students, each with a capable leader. The saloons/business will get coaching from the HR&S RISE Centre Uganda Accounting coach about bookkeeping and best practices in business management. In addition, the business will be supported by the Evaluation Planning coach to ensure that programme objectives are followed and the desired outcome is realized in a reasonable time. The Branding and Public relations coach will also support as well as the Survey management coach.
Investment capital
Chusa saloons seek to acquire investment capital funding to set up these saloons. The loan takers will sign a loan takers agreement and agree to repay back the loan after two years with 5% interest.
The total initial capital per saloon with five staff members is UGX. 3,647,000 (EUR 826.86). We eventually expect all the 20 girls graduating from the Chusa School to get involved which would then generate 4 saloons, thus UGX. 14,588,000 (EUR 3315.45).
The Salon staff
Names of the saloon staff and presented occupation/studies:
1. Mbabazi Juliet – Bakeries trainer
2. Nakabuye Sumaiyah- Student (S.3)
3. Halima Nakitto – Student (S.4)
4. Nabbosa Ronah – Student (S.2)
5. Kusiima Rose(Nalongo) – Employed
6. Mauda Kwiocwiny – Not in school
7. Kayeny Trinity – Not in school
8. Mungu Jamic Eve – Housewife
9. Nakigozi Sumaiyah – Student (S.4)
10. Aweko Jacqueline – Unemployed single mother
11. Parumu Judith – Housewife
12. Nakigozi Kuluthum – (P.7)
The following were elected by the above team to be the representatives of the whole program
1. Jacqueline Aweko, President
2. Namulinda Sumaiyah, Vice President
These same two individuals will be trained by the HR&S RISE Accounting coach about bookkeeping and financial management.
Also, all saloons will have financial management workshops to ensure a smooth running of the business and ensure financial stability of programs.
Loan Repayment strategy
A unit price of an average customer will cost UGX 15,000 (EUR 32).
Progress marker level 1: A saloon can attract at least one customer per day during normal days. That is UGX. 15,000 per day on average. This translates into UGX 450,000 per month. That’s assuming that there’s always one customer per day, which may not be the case in the 1 st 3 months or so. This translates into 8 months of the possible repayment period. Taking real situations into account, we can multiply this by 3 to make it 24 months. The team agreed to a 24 month repayment period with a UGX 168,000 monthly repayment to make the total repayment amount including (5+5) % interest UGX 4,011,700. In order to ensure the success of the programs, the girls are encouraged to fully utilize the rented space by adding other small businesses like soft drinks, mobile money etc in order to maximize incomes at the rented space. As Progress marker level 2: With the support by the HR&S Branding and public relations coach each staff has one customer per day, thus five customers in the saloon per day.
Investment capital per saloon
item | Unit Price | Unit | Amount | EUR |
| Rent | UGX 200 000 | 6 | UGX 1 200 000 | € 272,73 |
| Drier | UGX 500 000 | 1 | UGX 500 000 | € 113,64 |
| Braids & Cosmetics | UGX 300 000 | 1 | UGX 300 000 | € 68,18 |
| Electricity | UGX 50 000 | 6 | UGX 300 000 | € 68,18 |
| Carpentry | UGX 200 000 | 1 | UGX 200 000 | € 45,45 |
| Mirrors | UGX 100 000 | 2 | UGX 200 000 | € 45,45 |
| Trimming machines | UGX 100 000 | 2 | UGX 200 000 | € 45,45 |
| KCCA trading licence | UGX 150 000 | 1 | UGX 150 000 | € 34,09 |
| Sink | UGX 150 000 | 1 | UGX 150 000 | € 34,09 |
| Plastic chairs | UGX 20 000 | 5 | UGX 100 000 | € 22,73 |
| Rollers | UGX 15 000 | 4 | UGX 60 000 | € 13,64 |
| Carpet | UGX 50 000 | 1 | UGX 50 000 | € 11,36 |
| Towels | UGX 5 000 | 7 | UGX 35 000 | € 7,95 |
| Door curtain | UGX 30 000 | 1 | UGX 30 000 | € 6,82 |
| Banner | UGX 30 000 | 1 | UGX 30 000 | € 6,82 |
| Gloves | UGX 25 000 | 1 | UGX 25 000 | € 5,68 |
| Aprons | UGX 5 000 | 5 | UGX 25 000 | € 5,68 |
| Combs | UGX 20 000 | 1 | UGX 20 000 | € 4,55 |
| Basins | UGX 10 000 | 2 | UGX 20 000 | € 4,55 |
| Jerrycan | UGX 10 000 | 2 | UGX 20 000 | € 4,55 |
| Head bands | UGX 3 000 | 4 | UGX 12 000 | € 2,73 |
| Bucket | UGX 5 000 | 2 | UGX 10 000 | € 2,27 |
| Scissors | UGX 5 000 | 2 | UGX 10 000 | € 2,27 |
| Total | UGX 3 647 000 | € 828,86 | ||
| Total loan repayment amount | UGX 4 011 700 | € 911,75 |
Report on Chusa salons
RISE SALOONS
REPORT FOR THE YEAR ENDED DECEMBER 2021
The project was started in conjunction with CREATIVE ARTS 256 with the Director Mr. Edward Butimba.
The plan was that the students who are studying at the CHUSA School of beauty be availed with skills training both during and after their study. These skills would include both hair dressing hands-on skills as well as business financial management of the saloon business.
The saloon was to be primarily to be run as a profit oriented enterprise and independent of the school of beauty.
The startup costs for the saloon were all covered for the six months starting July to December 2021 in the hope that by sixth month, the business would be self-reliant.
However along the way, our partner didn’t honor our earlier agreed position of letting the saloon operate independently of the school. He instead shifted the school premises into the salon premises. This greatly affected customer confidence in the saloon and completely eroded the business and professional standards as well as goodwill from the public’s perception.
This meant that the enterprise was not sufficient, or showing any signs of self-sustainability even after 6 months. The salon was not receiving any customers
When we pointed out this issue to him, he couldn’t see combining a school with the saloon business was the cause of business collapse. He therefore asked to terminate his partnership with HR&S citing that HR&S wanted to use him and take credit for his work.
The saloon was therefore closed and all remaining assets kept in store with HR&S RISE _ Uganda team leader.
The CHUSA-HR&S partnership was therefore dissolved and a search for a more business oriented manager for the CHUSA saloon project started. Our partner also requested that the name CHUSA be withdrawn from HR&S work and hence it was decided that the saloon chain be named RISE Saloons
The next manager would have to be a business oriented person who is already in the same business and knows how the business works. The suitable manager is the one who is in need of support from HR&S and shares the same philosophy as that of HR&S.
The manager would decide whether or not to avail training opportunities for the CHUSA School of beauty students and graduates if that would serve the interests of the business favorably.
The previous year, the applicant for RISE saloons was able to pitch her business proposal and her vision to Action10 and she was tasked to finalize with her business formalization. This has been achieved and her business is now formally registered with the authorities, a good step in the correct both for HR&S and the business towards accountability and sustainability.
We now look forward to resuming the collaboration and the manager RISE will soon be able to sign the loan agreements as per HR&S Action10 Invest policy so as to access the much needed support to drive the project ahead
Annual report 2022
HR&S RISE UGANDA
REPORT FOR THE YEAR 2022
Majority of our endeavors for the year 2022 were about identifying the right partners for HR&S RISE Uganda, whose interests, commitment and vision align with that for HR&S
We were able to end the collaboration with Creative Arts 256 because of lack of accountability especially regarding the Chusa Saloon project. The details about this are shared in the CHUSA Saloon report.
We also realized Bernard Umony proposal for crafts and pieces. We had several meetings with Bernard about what we could do to have his artwork taken to market. Our proposals for him were not taken in action, meaning he didn’t keep his side of deal. We later decided to stop the effort as it seemed as if we were the only ones to make change.
In this year, we also received 11 applications from potential partners however three were able to pitch their ideas to Action10 successfully. These were Afroqyn Saloon, Daste Events and Bukoto Holdings Limited. Afroqyn accepted to take on our RISE saloons project, with a niche in afro hair saloon services, provided we met her financial support request. Daste Events requested for support in procuring the décor items to be used in his decorations and events management business. Lastly, Bukoto Holdings was requesting for a loan to add in her SACCO so as to provide small businesses with loans in the areas of Kamwokya and Kyebando, a proposal similar to one of our earlier projects with Creative Arts 256.
HR&S Uganda tasked the applicants to have their businesses registered as a measure to ensure that the business owners were interested in making a long-term and sustainable commitment to the survival of the entity, there by guaranteeing accountability and hard work to ensure success of the enterprise and therefore guaranteed loan performance for ActionInvest loans
Two of the three applicants were able to fully incorporate their businesses under Ugandan business law and are currently full registered. The next step will be to sign loan agreements as per ActionInvest loan requirements before disbursement of loans. These are Daste Events and Afroqyn Saloon. Bukoto Holding on the other hand failed to resolve internal financial management issues and failed to formalize their business as requested. As a result, they have been withdrawn from our potential partners.
We are grateful for the support rendered to us in the pursuit of economic sustainability for business in Uganda. We continue to assure our partners of a brighter future and a more fruitful collaboration. We therefore ask for continued support in our endeavors. We are working hard to ensure aid dependency is challenged with examples from our own future successes.
The last year has taught us a number of lessons and we shall apply them going forward and continue to learn as well with the aim of ensuring sustainable enterprising in Uganda.
MURUNGI MOSES
TEAM LEAD,
HR&S RISE SUPPORT CENTRE -UGANDA