How much does it cost to start a small business?

One significant effect of last year’s lockdown was the entrepreneurial spirit that many people developed. Almost everyone, for various reasons, had taken the initiative to start a business or engage in some activity. Despite the challenges posed by the pandemic, a number of startups have thrived and are well on their way to becoming established businesses.

Also read: COVID-19: How the Government can help startups remain stable

Starting a business is never easy especially for a tech startup. Challenges in the tech sector are quite unique and cannot be addressed in a regular manner. From the low digital penetration in the country to low internet coverage and connectivity to the high costs that are associated with any startup.

A deep dive into the costs required to start a business according to shows that in Uganda one needs $162.08 (UGX 574,000) to start a business. This could however vary depending on the business one intends to start as the costs could be lower or even higher than stated.

The costs for a tech startup or online business tend to be higher with expenses going into different things required for the business to function and stay afloat. One of the highest costs that come with a startup is app development according to Jerry, at Tusk Safaris.

“You’ll be lucky as a startup to find developers willing to work with you basically for free otherwise app development is very expensive. Where will a start-up get 10,000 dollars to invest in a fully-fledged app?”

These costs also vary with businesses within the tech space as Jerry explains.

“It also depends on the nature of the business but for a tech start-up, I think the registration process is quite affordable, between UGX 300,000 to UGX 600,000 and that’s done, things like a TIN and bank account can be acquired quite easily. Websites are also quite affordable nowadays, ranging from UGX 300,000 to maybe 2m depending on the nature of the task. The challenge then comes with the initial investment in the application. The costs for a startup will mostly go in the development space unless you partner with developers willing to do it at a free cost in exchange for shares.”

When it comes to starting a tech business, some areas that could take up a considerable chunk of the costs like socials, ads, registration, data, are usually given little attention. If these areas are not properly planned for, one could struggle with the costs at a later stage which will not allow the business to make it past the beginning stage. The costs for a startup will mostly go in the development space unless you partner with developers willing to do it at a free cost in exchange for shares.

Starting a tech business in Uganda can be quite costly. However, one can overcome these costs by seeking different funding opportunities that have proven to be quite beneficial. Not only does one receive funding, but this also comes along with mentorship and guidance to elevate people’s ideas.

Read also: The key to Uganda’s booming ecosystem is funding opportunities for startups in Uganda

Another way to tackle the costs is through partnerships with different innovators in the same field. Through partnerships, every business handles its area of expertise that lessens the costs associated with making wrong decisions thus wastage.

Cost to start a small business in other countries

According to, the cheapest country to start a business in Africa is Rwanda where it is completely free for two years. The second cheapest country in Africa is Sudan ($8.49), South Africa ($12.66), followed by Egypt ($12.73), then Mauritania ($13.80) fifth position.

Lessons to take from Rwanda is that registration of both local and foreign companies is done at no charge. This is a major factor that usually contributes to the early costs required to start a business.

Read more: A phenomenal force in tech law in Uganda, Alice Namuli discusses the field and how startups can deal with legal issues

Read more: Bank of Uganda launches regulatory sandbox to improve the startup ecosystem in Uganda

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