How to overcome the 'kaduuka' mentality in the way we do business
For years, we have run buduukas (small shops) as business. Yes they are our way of doing things. They are what we have known for years. Yesterday, I was having an argument with a bunch of fairly old men about shares/stock.
"What's the essence of holding shares in Liverpool FC?" one asked.
"It's useless, you don't get to be given any money Liverpool makes. You are just a registered fan."
The argument started after one of the guys said someone he knew had shares in Liverpool FC, shares they bought about 30 years ago when they had gone for studies in the UK.
These are shares they were now living off comfortably. The argument got so heated but I wasn't surprised by the level of ignorance these old men had about stocks and these were fairly learned and supposedly informed senior citizens of Uganda.
I told them I wasn't surprised by their stance on the subject. In country where kaduuka business is all we know and less than 8% of the citizenry hold stock of any kind in any company, I really wasn't surprised.
I told them part of the reason I stopped trying to onboard Kikuubo clients is because of their mentality and outlook of how things are or should be done.
An outlook I call the kaduuka way of doing things.
What do I mean by kaduuka way of doing things?
The Ugandan way or kaduuka way of doing things is where someone starts a small personal business they must personally be involved in, solely owned by them and they do as they please.
They pick money from the drawer and use it as they please regardless of whether what it's being used for is business related or not. At the end of the day they carry whatever they have made and on their way home, pass by a bar and depending on how much fun is at the ba,r they may go back home with some of the money or not.
They expect daily drawings out of the business regardless of whether they have made profits or not. When they start a business, from they believe every earning is a profit, no records, no structures or formality.
That's a kaduuka business for you and kaduuka mentality and for years that's been our mode of operation.
People don't understand that you can invest in a business and keep earning from it even without being involved in any way in it's operations. I have another friend who bought and accumulate some stock in a business in the UK during his years of studies. He earns about £5,000 from it annually, that's about Shs 25 million.
He doesn't have to sweat for it and it's good money looking at how much he invested 15 or so years ago as a student. He can even sell his stake for way much more of he wished to. So with equity investing depending on whether the company your investing in is a start up or already established, you can make some money over time or within a year.
This money gets to be made when the business makes profits. The more profits it makes, the bigger the take home. This money if there is paid at the end of year so you don't expect to call with requests for money whenever you get stuck.
When you compare the number of Americans that hold stock (68%) to Ugandans (8%), you can agree we have a long way to go and the starting point should be teaching people these things just like teaching them how to use money.
Its an art you need to learn. It has become my personal undertaking with ventures like Campus Doctor and Goka Foods which I have decided to involve people in just to show them how this works. It could take 2 years, 3 years or maybe 5 years but I am sure we shall get there.
Jaluum Herberts Luwizza is a Speaker,Writer and Business Columnist with the Nile Post.He is also a Business Consultant at YOUNG TREP East Africa's No.1 Business Management and Consultancy firm that helps people start and grow profitable businesses.
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