The ‘Juacali’ Trap

The Trap

‘Juacali’ is a Swahili word denoting informal work & business. It has its source from Kenya with its large number of informal sector players that take form in shoe shiners and road side vendors. Uganda’s economy is not any different & is largely dominated by the informal sector that takes up 80% of the labour force.

With little to no barriers of entry like capital & regulation, it provides a smooth entry for the majority of the unemployed population providing a source of livelihood.

With minor advantages like limited regulatory interference & no taxation commitments, the informal sector provides the perfect comfort zone for a ‘Juacali’ entrepreneur. This manifests into a mediocre mindset that is difficult to overcome with a constant desire to run business & its operations in informal & unprofessional ways.

Bad business habits & conduct emerge in form of inappropriate book keeping measures, poor business conduct, lack of standardisation, personal expenditure from business capital, lack of professional ethics & many more.

It’s Limitations

Enjoying the small comforts of a ‘Juacali’ operation has its limitations. These include;

Limited Access to Capital & Financing

Informal sector businesses carry a high-risk factor for banking institutions and are not favoured for credit & financing. This comes with high interest on credit obtained which greatly limits the growth capacity of the business.

Limited Access to Large & Profitable Markets

Operating on a ‘Juacali’ scale limits the entrepreneur to the low-quality market segments & eliminates any possibility of accessing the large profitable market segments. These have the capacity to significantly grow an entrepreneur’s revenue base with better quality transactions of higher monetary value & security.  

Lack of Business Legitimacy

Operating a ‘Juacali’ operation does not generate any level of integrity & legitimacy for the business from the vantage point of suppliers & the market in general limiting the growth potential of the business.  

Difficulty Hiring High Quality Talent

It near impossible for a ‘Juacali’ operation to attract top human resource. A low technical level ensues that limits the business growth capacity.

Threat of Clamp Down by Regulatory Authorities

A ‘Juacali’ operation runs the risk clamp down from regulatory bodies like the taxman & local authorities. The constant threat limits the growth capacity of the business.

Limited Chances of Business Continuity

A ‘Juacali’ operation lacks appropriate instruments to ensure continuity in the event of absence of its founder.

A Way Forward

The ‘Juacali’ culture must be eliminated at all costs. We urge entrepreneurs to take the following steps to overcome the limiting ‘Juacali’ mindset.

Add the Business to a Formal Company Register

This is the crucial first step that involves either registering a business name or a formal company. This is a crucial stepping stone for a formal business operation.

Develop a Formal Culture

The biggest hurdle lies in the mind. Adopt a formal approach at all levels of the operation starting off with dress code & appearance to customer approach & presentation.

Improve Book Keeping Measures

Seek to have a book keeping culture in documenting business financial & monetary activity. This gives the business a strong base to operate as an individual entity.

Develop & Market a Brand

Seek to develop a brand & give the business a life of its own in the minds of the targeted market. A brand takes form in its unique identity & promise to its market.

Separate yourself from the Business

Personal expenditure should not be drawn from business finances. Mixing the two weakens the financial integrity & position of the business.

Seek Continuous Personal & Operational Improvements

Improvement through bench marking, trainings & research should constantly be pursued by an entrepreneur for process & personal growth.

Thank You for Reading.