Concept Note - Establishing a Business Incubator in University-By Ojijo Pascal, Founder & Lead,...

University Business Incubation Centre

Concept Note For Establishment Of A Business Incubation Centre At University.

Draft developed by Ojijo, The Founder & Lead at Go Big Hub.

M: +256 776 100059 E: [email protected]

Concept note to Establish a Business Incubator in University-Case Study of Uganda

By Ojijo Pascal, Founder & Lead, GoBigHub

[email protected]. +256776100059. www.gobighub.com

University BUSINESS INCUBATION CENTRE

(University-BIC)

1. EXECUTIVE SUMMARY

This is a concept note for the establishment of a business incubation facility at University, to be named, University

Business Incubation Centre (University-BIC). The centre will provide three type so services, namely, innovation,

financing and mentorship. The centre will utilize a single hall, which will be transformed into an open office plan, as

well as conference centre for events. The centre will be funded by income generating activities, as well as donations.

The total capital costs are projected at UGX. 17,852,500, that is, equipment costs, plus 3 months operating expenses.

The project will earn an annual profit of Ugx.9,050,000 and hence break even in approximately 2 years.

2. BACKGROUND

The Problem

The economies of the world generally, with special reference to emerging regions, with Uganda as an example, are

suffering under increased unemployment due to diminishing opportunities in the labour market, and subsequently,

there is need for enterprise development to create more jobs. This then calls for creativity, especially amongst the

youth, but that creativity faces a deadlock where ideas cannot meet capital, and when they o meet capital, the ideas

lack mentorship to be transformed into full fledge businesses. Consequently, there is need for a solution that not

only encourages creativity, but also capitalizes the created ideas, and mentors the newly capitalised ideas into

business units that can compete and add value to the investors, and customers.

About Incubators

Incubation has been identified as a powerful process of business enterprise development because incubation and

prototyping creates the bridge between innovation and commercialization. It is the process of supporting start-up

businesses in order to build entrepreneurship capability for self sustenance. This involves providing common

facilities such as physical space, shared services, skills training and business legal advise to facilitate the operations

of selected entrepreneurs and assist them until graduation when they have capability on their own.

The Solution-University-BIC

mailto:[email protected]


http://www.gobighub.com/





University-BIC is a proposed entrepreneurship centre at University. It exists to provide young businesses in the

University, as well as enterprising minds in the University, a professional office space at an affordable rate, as well

as creating a base for the various support available to them, and fostering a community of like minds.

The centre is proposed to be located at University. The city location makes entrepreneurs easily accessible to

partners and clients, as well as allowing them to conveniently reach any part of the city.

The institution is to reflect the philosophy of University as an entrepreneurship university, where students are to set

their own path through proactive initiatives, and change the world.

Current Incubators in Uganda

The following listed are the business incubation facilities in Uganda:

Mara Launch Pad/Angels Finance Cooperation-all businesses (supported by Mara Foundation, Mara

Foundation –A Mara Group) http://www.mara-foundation.org/entrepreneurship/mara-launchpad.html

Uganda Industrial Research Institute-all businesses- supported by government of Uganda-

http://www.uiri.org/index.php?option=com_content&view=article&id=95&Itemid=156

Renewable Energy Incubator -renewable energy technologies) (supported by Makerere University in

Kampala, college of engineering) http://www.energyincubator.org/

The Food Technology and Business Incubation Centre’s - food value added products (supported by

Makerere University, http://ftbic.mak.ac.ug/

Outbox-IT and service businesses- i(supported by Google, Deloitte, and Samsung)

http://www.outbox.co.ug/tags/kampala

FinAfrica-all businesses (supported by Davis, an Italian entrepreneur)-http://finafrica.org/home

Makerere University Accelerator, run at the university of Makerere, faculty of computer science, is

supported by donors from Norway, and like-minded European Entrepreneur Millionaires)

Resilient Network Africa, sponsored by USAID, and helping in innovation of ICT applications in medicine and

health sectors.

GoBigHub, run by entrepreneur Ojijo Pascal, as a for profit venture, which seeks to connect capital to

innovation business ideas.

The Challenges faced by Incubators in Uganda

Incubators in Uganda have various challenges as below:

All incubators in Uganda, except GoBigHub, are run based on donations by donors. To this end, they are

limited by grants from donors.

Secondly, incubators in Uganda mentor and train businesses, and even organize for contests and

consequently award presents to the winners. However, they do not have a running institutional program

to fund ideas, which is the main challenge facing the youth in Uganda, and Africa, how to get funding.

GoBigHub addresses this by being the first hub to have regular (every first Saturday), events, where the

entreprenuers get a chance to pitch their ideas to potential investors.


http://www.mara-foundation.org/entrepreneurship/mara-launchpad.html

http://www.energyincubator.org/

http://ftbic.mak.ac.ug/

http://www.outbox.co.ug/tags/kampala

http://finafrica.org/home





Current Incubators in Kenyan Universities

Kenya has a number of incubation centers connecting students, the public entrepreneurs, and funders/donors.

Some of them are:

1. The Innovation Centre at Strathmore University will have cost the institution Sh10 million. Here, budding entrepreneurs will be given seed capital to kick-start their projects. The state-of-the-art facility will accommodate up to 50 entrepreneurs and comes with a tech hub. Additionally, there are offices for Business Process Outsourcing (BPOs), business mentorship and consultation. Idea Foundation from Norway had committed about Sh13 million ($160, 000) to support four viable projects in four rounds this year. This means at least 16 budding entrepreneurs will get an average Sh800, 000 for their enterprises. The manager in charge is Mr. John Matogo. 2. The University of Nairobi boasts of the AfriLab centre which was set up in 2011 and brings together student innovators with the objective of designing new products. 3. Others that have in the past shown interest in incubation concept are Egerton University and Jomo Kenyatta University of Agriculture and Technology. 4. Kenyatta University, with the support from the Chandaria Foundation has invested more than Sh50 million towards the Chandaria Business Innovation and Incubation Centre. It is expected to be launched early next month and will admit 18 to 25 students for entrepreneurship training for between six months and a year.






3. PROPOSED METHODOLOGY

Activities/Programs

The University-BIC will run activities under three themes of creativity, capital, and mentorship, as below:

1. innovation programs

conferences /seminar trainings

monthly speaking sessions to inspire and inform the incubatees. The speaker programme will bring keynote

professionals to talk to entrepreneurs on technical issues of relevance to them, such as taxation and venture

capital.

2. capital programs

pitching forum (for incubatees to pitch to potential investors)

proposal submission (for mentees to get funding without necessarily pitching)

3. mentorship programs

peer to peer mentorship (connecting incubatees with each other for mentorship). the biggest benefit of all

to the young entrepreneurs, though, is the benefit of working together in a common space. Sharing of ideas

and resources, cross-selling, and professional introductions are an inevitable consequence and of

immeasurable benefit to the leaders of small, growing businesses.

senior mentorship program (connecting incubates to achievers to mentor them)

desk spaces at the venue for incubatees to be in an office set up, and share. this is an open space has an

open-plan layout with modern furniture befitting the professional image required by ambitious young

entrepreneurs. Members are able to make use of a fast wi-fi internet connection, lounge area, conference

room, and the professional touch of having their guests received by a receptionist. This location and

facilities would normally come at a cost well out of reach of a small, growing business, yet they go a long

way towards enabling Uganda’s most promising young entrepreneurs to position their companies as

professional and reliable.

Other Centre Services

Help with business basics

Networking activities

Marketing assistance

High-speed Internet access

Help with accounting/financial management

Help with presentation skills

Links to strategic partners

Access to angel investors or venture capital

Comprehensive business training programs

Advisory boards and mentors

Management team identification

Help with business etiquette






Technology commercialization assistance

Help with regulatory compliance

Intellectual property management

Management

The centre will be managed by an employee, an entrepreneur, and dedicated staff member, who will be the

executive director of the centre, and will work to brand, and represent the centre globally, with the objective of

getting members, getting partners, and getting turn-over of members into full fledged businesses. The management

team will be assisted by receptionist, and clerk (who will also manage the fresh drinks and snacks bar.

Models (In-House or Virtual)

University-BIC will use two models of incubation, namely:

Virtual Incubation is whereby the incubated enterprises are supported at their facilities.

In-house Incubation is whereby the enterprise is supported at the UIRI campus.

Partnerships

Working smart, through win-win-win joint venture agreements, the University=BIC will be able to work with partners

from the following agencies and fields:

Industry Relationship Individual Partners

Government Sponsorship of events Ministry of Finance ; Ministry of

Education;

Competitiveness and Investment

Climate Secretariat (CICS)

Universities Competitions

Conferences

Joint Programs

Makerere University, Kampala

Faculty of Food science and

technology

Makerere university faculty of ICT

Business associations Networking

Capacity building

Connecting entrepreneurs to

capital

Chamber of commerce

Investment clubs association of

Uganda

UIA

Incubator networks






Society Entrepreneurs needing desks, etc.

Corporations Joint enterprises for production of

implements

Microsoft/ IBM/ Facebook/ Google,

and other Silicon Valley tech

companies,

Donations, sponsorships, technical

knowhow , conferences

Income Sources

The centre will generate income from the following sources:

INCOME SOURCE DETAIL

Grants University donation to centre Government donation to centre Foreign embassies and missions donations Corporations donations Donations by entrepreneurs Prize money donations Income generating activities Secretarial bureau Refreshments and snacks bar Commissions on financing deals sourced by centre Rental of desk space by outsiders (dedicated) User fees by members Conference fees/training fees

Performance Measurement

The activities of the centre will be measure based on the 6S Performance Measurement Matrix, taking to account

the ability of the project to deliver results to the entirety of stakeholders, namely:

Staff;

Shareholders;

Society;

State;

Suppliers; and

Shoppers.






4. FINANCIALS

Capital Investment

Item Unit Qty Unit Cost Total

Computers 3 750,000 2,250,000

Scanners 1 200,000 200,000

Photocopy 1 1,500,000 1,500,000

Conference Laptop & Projector 1 2,500,000 2,500,000

Conference Table & Chairs 1 1,200,000 1,200,000

Binding Machine 1 50,000 50,000

Laminating 1 100,000 100,000

Air conditioners 1 100,000 100,000

Fridge 1 1,200,000 1,200,000

Tables (4-in-1)) 10 10,000 100,000

Chairs 40 15,000 600,000

Total cost 9,800,000

Variable Costs

Variable Costs

Item Unit cost/day Unit Cost/month Prod. Cost/year

Staples and punching machine 1,000 30,000 360,000

Paper 15,000 450,000 5,400,000

Sub-total 480,000 5,760,000

Fixed Costs

Fixed Costs

Utilities (garbage, phone, power & water) - -






Sales & Marketing 500,000 6,000,000

Salaries 1,500,000 18,000,000

Renting - -

Depreciation (Assets write off) Expenses 204,167 2,450,000

Sub-total 2,204,167 26,450,000

TOTAL OPERATING COSTS 2,684,167 32,210,000

Pricing Schedule

Revenue Unit Selling price Qty/day Qt/Month

Rental (outside incubatees) 200,000 10 2,000,000 Refreshments & Snacks 20,000 1 520,000 Membership 10,000 10 100,000 Binding 2,000 5 260,000 Printing 50 12,500 325,000 Photocopying 50 12,500 325,000






Profitability Analysis

Revenue per month per year

Rental (outside incubatees) 2,000,000 24,000,000

Binding 260,000 3,120,000

Refreshments & Snacks 520,000 6,240,000

Printing 325,000 3,900,000

Membership 100,000 100,000

Photocopying 325,000 3,900,000

Operating Costs (2,684,167) (32,210,000)

Profit 845,833 9,050,000

Assumptions

The project is based on the below assumptions:

Working days are 26 days per month, 32 per year;

A projection of 10 outside member incubates, paying 200,000 ugx per month for use of services, and 10,000 member fee per year to attend all functions at no cost..

Rent is freely offered by the university;

Depreciation (fixed assets write off) assumes 4 years life of assets written off at 25% per year for all assets.

Direct costs include materials, supplies and other costs that directly go into production of the product.

……………………………………………

Author Profile/ Ojijo Pascal

Ojijo has worked extensively with collective investment schemes generally (namely, investment clubs and cooperatives), as a consultant on financial literacy, legal advisory, strategic planning, and leadership dynamics. In this area, he has also authored two leading texts on collective investment schemes, with one on Cooperatives, Successful Cooperatives - Managers' Guide to Acquire, Retain and Grow Membership, Savings and Assets and one on investment clubs, Making Money Together - Ojijo's Investments Club Manual. He sits in bank of Uganda Financial Literacy Advisory Group/ Financial






Literacy Sharing Group (FLISG), and is a co-founder of Uganda Ministry of Finance sponsored committee of Champions promoting Investment clubs, Investment Clubs Association Of Uganda-ICAU. He has helped in the training and or setting up of various cooperatives, including ministry of foreign affairs cooperative; finance ministry cooperative; NEMA; NARO; Gender Ministry cooperative, and Nsamizi Institute cooperative (Mpigi), to name but a few.

Ojijo is also a lawyer and guest lecturer in Financial Services Law, ICT Law, Legal Rhetoric and Law Firm Management; and a communications expert specializing in strategic planning, public speaking, and writing skills. He has worked with various clients including ministry of finance (Uganda); Bank of Uganda; Ministry of Gender; Technoserve; AIESEC; AYDL; UMYDF; CCEDU; PEDN; Foundation for Human Rights; several universities, companies, and individuals on personal branding, financial literacy, business coaching, and entrepreneurship.

Ojijo is an author of 51 books; Inua Kijana Fellow; Performance Poet’ Armature Pianist; and entrepreneur owner of luopedia.com, lawpronto.com, naniwapi.com, gobighub.com, allpublicspeakers.com, bankitgroup.com, and achibela.com.


http://www.luopedia.com/

http://www.allpublicspeakers.com/

http://www.bankitgroup.com,/

http://www.achibela.com/

Concept Note - Establishing a Business Incubator in University-By Ojijo Pascal, Founder & Lead,...

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