GOVERNMENT AND DEVELOPMENT ORGANIZATIONS (G & DOS)

Governments and Development Organizations around the world are preaching the gospel of entrepreneurship, particularly among the young generation, but the lack of capital is always a bugbear in the world. There are a few companies that can launch without seed capital, such as traders and consultants, but the majority can’t. The raising of capital is the talk of the world and we won’t stop until we find a solution. The main sources of funding for entrepreneurs are the piggy bank; debt financing from commercial banks; equity financing through venture capitalists and angel investors: or community financing like that pioneered by the Grameen Bank of Bangladesh. Each has its price. Venture capitalists and angel investors usually look for high returns as short–term investors. Across the world, the economic development blueprints say small businesses can rescue the world from poverty and unemployment. Udzungwa Mountains College Students Club of Entrepreneurship (UMCSCE) is advising and encouraging young people entrepreneurs of the United Republic of Tanzania and the world at large to start with what they have. You have a brilliant mind; use it and the bank will catch up later.

Count the number of school leavers at the end of every year, then count the number of jobs creation and available, and you will come to find and see that there are a lot of people who want jobs. It is said that Tanzania produces, at least 1,000,000 jobless school leavers each year. For many people in Tanzania, setting up their own small businesses or working from home is simply a question of economic survival. But being self–employed can be a very positive experience. It allows you to be independent and in charge of your own life. What form will your business take?
The two most common forms of home business are sole proprietorship and partnership. In sole proprietorship, you are the only owner of the business. All the profits are yours. And so are the debts. This form of business has informal registration formalities. A partnership has also no complicated registration formalities. There are at least two partners and both must contribute something like money, skills or experience. No Matter how friendly you are, have a partnership agreement drawn up. This partnership agreement will describe your business relationship. What each one brings to the partnership and most especially what will happen if a partner dies or the partnership breaks up. Other forms of business in Tanzania are Public Limited Companies (PLC) and Private Companies. Both of these must be registered with the Business Registration and Licensing Authority (BRELA) under the Companies Act 2002. Since the two last forms above (Public Limited Companies (PLC) and Private Limited) have complicated taxation requirements, see an accountant and a lawyer who can assist you to settle this. Value Added Tax (VAT) is payable on the sale of goods or services where the turnover exceeds Tshs 20,000,000/= a year. Visit your local tax office for advice.
Before you start your own business investigate the following afresh: make a list or who you think your customers will be. This will be your target market. Find out about your target market. Where do they live or work? How old are they? Are they rich or poor, male or female? This is called a market profile. Secondly, decide for yourself, where and how you will sell to your market: door-to-door and outdoor markets, to shops, through newspapers and adverts. Test your target market by asking some of the people on your list if they will buy from you. If they say no ask them why not. Thirdly, find out who your competitors are and decide how to improve the services or products they are providing. What part of the market are they neglecting so that you can sell to those people? Study social trends in your area to find opportunities for home business such as families where both husbands and wives work and need childcare services. You can open a center for this. Grocery buying services too may be needed. Companies often use consultants to build small businesses in cleaning, equipment maintenance, public relations, or debt collecting. Think of other things like bookkeeping, secretarial services, and advertising.
There are four (4) ways of picking the right job business. First, what did you do at your last job that could become a business? Secondly, what is your hobby? Thirdly, what are your talents, and lastly what do you want to do? The starting point of any small business is, however, the idea. What products or services can you see? Look around to see what people need and make your idea different so that they will want to pay for it. Remember it is no good the same as everyone else because there will be too much competition to make money. Before you begin business set your goals. What are you starting it for? To pay debts, put your child to school or college or save the deposit on a house? Write down your goals and how much money you will need to achieve this. Almost all small businesses need some finance to get up and running. Some sources of finance are banks and personal savings. Banks make it difficult to borrow. The best option will be an overdraft if you have a bank account.
Approach successful family members and other people in the community for a loan or invite them to buy shares in your business if it is registered under the Companies Act 2002. Anyone you borrow money from will want to know how and when you will pay back. Paying back borrowed money depends on how the business is being run. What is to be charged on goods or services is often the most difficult part. If you are making to sell you need to cover the cost of making it. On top of that, add profit without making it too expensive or more expensive than your competitors. Review your prices once a year. If your competitors put their prices up perhaps you should do the same. If you are not making enough profit perhaps the prices are too low. Open a bank account as some of your customers would wish to pay by cheque. To keep customers coming back you have to constantly remind them of your business. Getting your business well–known is called marketing. Some ways of doing this are Business cards, word of mouth, pamphlets, advertising, telephone, fax: websites, and email.
Many home businesses don’t need equipment: just raw materials are enough. This can be as simple as bread, cheese, and butter. You will buy the raw materials as you need them to avoid their being spoilt. Equipment for the business can be very costly. So try to find alternatives especially when you are starting out. If you need equipment to make your product find out about hiring or buying a second hand. Check out the adverts in local newspapers. Use telecoms call Answer – services to take telephone messages to save you the cost of buying and maintaining an answering machine. Photocopying and Faxing can be done at one of the many shops around. Use a computer and E–mail of a neighbor and pay for services. Insurance is something we don’t think about until we need it because it seems so expensive. Once your business is doing well you should take out short–term insurance to cover the loss of your stock, equipment, and cash. Think too about opening a policy covering your life, death, and disability.
Once your family becomes dependent on your income you need insurance if any of these things happen to you. It is worthwhile complying with business has grown. Get yourself registered with the tax departments. Get in contact with the local authority health department if you are selling food. Contact the Liquor Licensing Authority if you are selling alcohol. More businesses fail because of financial mismanagement than because the ideas were not any good. If you spend everything you earn you will soon have no business at all. Don’t spend on anything that is not going to help you make money. Watch every cent that comes into or goes out of the business.