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The cost of not knowing how to cost

How the ILO contributes to women’s empowerment, job creation and economic growth in Uganda through business management skills.

Feature | 25 February 2014
Pamela Tumwikirize, woman entrepreneur
KABALE, Uganda (ILO News) – For five years Pamela Tumwikirize struggled to keep her business afloat.

She had taught herself knitting and tailoring, which she initially believed was all she needed to know to make school uniforms and sell them at a market stall in the western Ugandan town of Kabale.

But she had no notion of the business management skills needed to run a viable business. “I used to just make a pair of shorts, put it in the shop and wait for customers. I didn’t bother about the customers’ needs.”

That changed after the Uganda Scale Industries Association selected her to participate in Improve Your Business training, which is supported by the ILO Women Entrepreneurship Development and Economic Empowerment (ILO-WED-EE) project.

“During the training, we learnt about costing and pricing. I had just been setting my prices without calculating my costs – direct and indirect,” she says. “When I calculated my costs, I realized that I had been making losses.” After the training, she increased her prices. For example, she now has raised the price of a pair of boys’ shorts from the equivalent of US$2 to US$3.

The story of Pamela, women entrepreneur in Uganda

  >> More Ugandan women entrepreneurs tell their stories
Tumwikirize also learnt about marketing and customer care. With her new skills in marketing, she made good samples and went out to schools to promote her products. In addition, she diversified her product line and started making shirts, dresses, sweaters and socks to provide a complete school uniform. “A customer now comes to my shop and goes away with all that is required for the child to go to school the next day,” she explained.

One of Pamela Tumwikirize's employees
Her new business strategy has worked well. She now employs three other women to meet the growing demand. She has also trained three young women to knit and outsources products from them when she has major orders to fill.

The 40-year-old mother of five borrowed 1.5 million Ugandan shillings (UGX) – US$ 584 – from her husband to buy an additional knitting machine. “It was hard to convince my husband that I would make the money to pay him back.” But she quickly made good on the loan. “I am now happy that he has confidence in my business again,” she says, beaming with pride.

She hopes she’ll be able to continue to grow her business, while maintaining the quality of her products.

Like Tumwikirize, about 700 women entrepreneurs in Uganda have benefitted, in a period of about one year, from business development services provided by the WED-EE project.

By providing practical business management skills, as well as networking opportunities and a platform for sharing ideas, the project contributes to women's economic empowerment, job creation and economic growth in Uganda.