HOIMA incubation centre

1. Introduction
The model combines several services:
- a business centre,
- business development services supporting the transition to the formal economy,
- actions to encourage and stimulate collaboration and cooperation between entrepreneurs.

The combination of all these products, which influence and enhance each other, makes the model quite unique. Legally, the investment will be made via a Ugandan daughter company of De Punt and the management of the business centre will be conducted in close collaboration with HEDA, whose team will be enlarged.

2. Managing the Business Centre
In addition to spaces for rent in the business centre, starting entrepreneurs are offered a variety of services including reception, post distribution, etc. and the use of the infrastructure, such as meeting rooms, sanitary facilities and a cafeteria.

With an investment of € 250,000 (UGX 525,000,000), the centre can finance a building for the centre’s own staff and for 25 tenants. With an average rent of UGX 175,000 per office and an occupation of 80% after 3 years, the annual income is estimated at UGX 42,000,000 (€ 20,000).

The annual operating cost is estimated at UGX 34,335,000 (€ 16,350):
- depreciation of investments over 20 years: UGX 26,250,000 (€ 12,500),
- the cost of 2 office employees: UGX 4,410,000 (€ 2,100),
- the cost of 1 half-time coordinator: UGX 3,675,000 (€ 1,750).

3. Business Development Services to Support the Transition to the Formal Economy
These services will be offered to all entrepreneurs in Hoima district. They will comprise basic training courses, specialist training courses and individual advice on entrepreneurial skills.

These services will be financed through:
- continued funding from the NGO TRIAS,
- contributions from the users of the services.
The profit made by the business centre will be invested in expanding these services.

4. Mentoring
Collaboration between entrepreneurs will be supported and stimulated. In particular, this collaboration will take the form of joint purchasing of raw materials and equipment, starting a micro-insurance scheme, setting up a joint sales office, etc. These services will be provided at cost price or as a percentage of the profit realised.

1. Start of the Activities
The incubation centre can only be started when two conditions are met:
- the investment capital must be available
- partnerships must be developed.

De Punt will assume a leading role in the venture and provide 75% of the funds. The remaining funds will come from additional investments by shareholders and from the Belgian government via BIO (the Belgian Investment Company for Developing Countries). This means the project will also involve a public-private partnership.

As regards the development of partnerships, the project will collaborate closely with HEDA, a members’ organisation for entrepreneurs in Hoima district in Uganda, and with TRIAS, a Flemish NGO that is already active locally. The cooperation with local organisations (e.g. HODFA, the Hoima District Farmers’ Association) and with the local authorities (e.g. NAADS, the National Agriculture Advisory Development Services) will be further extended.

2. Marketing
The various services of the incubation centre will supply the new needs that will arise as a result of economic developments in Hoima district. Uganda currently has a stable political climate under President Museveni, who was recently re-elected. Moreover, it has a stable and high economic growth of more than 6% a year. Hoima district lies in the west of the country and is free of ethnic and other troubles. Agriculture represents 80% of the economic activity, and several sectors (rice, tobacco, honey, poultry and others) have developed beyond the subsistence-economy stage. This development is accompanied by a growing retail trade and supplier trade, as well as export initiatives.

These growth sectors have new needs for support and services, which the incubation centre can provide in a flexible way. The location in the commercial centre of Hoima and the quality of the services will be crucial. The proposed prices are close to the prices of services currently offered, but where it concerns new services, there is not really any good basis for comparison.

Publicity and promotion will be done by the local partners and by other organisations aimed at the same target group, such as micro-financing organisations.

The model combines several services:
- a business centre,
- business development services supporting the transition to the formal economy,
- actions to encourage and stimulate collaboration and cooperation between entrepreneurs.

The combination of all these products, which influence and enhance each other, makes the model quite unique.

I am since the start-up in 2000, the general director of De Punt, a breeding ground for entrepreneurs who care for the people and the environment.
De Punt started 7 years ago on a project basis, has since moved to new buildings on the site of a former steel factory, and employs 15 people.
I hold a master degree in law and working with the banking group Fortis, I have a long time experience in giving support and advice to small and medium sized companies.
I am a board member of several social economy initiatives and as a consultant I give support for businesses that implement the principles of social economy in their organisations.
I find most satisfaction in the combination of getting people enthousiastic on realising their economic projects.

The incubation centre will impact development through its influence on local trade and industry. This will take place at three levels: the incubation centre itself, the direct clients, and the general climate of enterprise.

1. The Incubation Centre in Hoima District
The investment in building the incubation centre will create extra jobs and income. The aim is to use local products and rely on local contractors as much as possible. As soon as the centre is operational, two office employees will be hired. The expansion of the advisory services will also entail the hiring of two employees. In the medium term, new services will be added, such as insurance, ICT, translations, international contacts, etc. In the long term, this should give rise to the creation of ten spin-off companies.

2. The Direct Clients
The business centre will house twenty-five companies. The aim is for these companies eventually to find a location of their own after their start-up period, which can range between two and five years. This means that an average of eight entrepreneurs are expected to leave every year. After ten years, the outflow should therefore add up to fifty companies.

Every year, the advisory services are expected to reach about 200 companies who are in the process of making the transition from the informal economy to the formal economy. With the mentoring services, the aim is to have about ten groups of about ten participants each after three years. This should lead to the establishment of approximately five buying and sales cooperatives, which will in turn create extra employment.

3. The General Climate of Enterprise
The presence of an incubation centre will have a positive influence on the spirit of enterprise in Hoima district. It will stimulate an enterprising environment, e.g. by involving partners and the local authorities in its own operation. This increased activity will also have a positive effect on other companies that act as suppliers, subcontractors, customers, etc. In short, the incubation centre will make a contribution to the ‘bottom-of-the-pyramid’ economy.