Can Social Enterprises Be Profitable?

By Daniel Mpala

Twenty-one-year old Joan Nalugeba’s dreams of a world without malaria — and the Ugandan entrepreneur believes her company’s mosquito repellent soap will do just that, while proving that social enterprises can be both profitable and make an impact.

But for Nalugeba (pictured above) the public does not always understand her dream. Because of this, it often feels like she’s “swimming against the stream” she says.

Nalugeba should know. While growing up in an orphanage, she often caught malaria.

“I became a victim of bullying and I always wondered why I kept on getting the disease, yet I slept in a mosquito net every single day,” she says.

Upon finishing her high school, she joined the Social Innovation Academy (Sina) — a Kampala-based academy that educates former orphans, street children, refugees and other disadvantaged youth to become job creators and social entrepreneurs. It is here that she got the idea for her business.

Following this, in 2016, she founded Uganics together with co-founder Kaganda Shafic.

The social enterprise produces a mosquito repellent soap which can be used for bathing and washing. She says the soap — which has been medically certified by the Ugandan government and scientifically tested by the University of Mannheim in Germany — is produced from organic oils sourced locally from women farmers.

Nalugeba, who says she retails the soap at the same price as that of ordinary soap, believes she’s helping increase awareness about malaria when she markets the product to mothers in local hospitals.

‘Grown so much’

Uganics biggest customers, she points out, are resorts. “At the moment we sell up to 50kg of soap with (monthly) revenue of between $7000 and $8000,” she says. The firm employs 25 people, the oldest of whom is 38.

She says her business has grown substantially in the past year, particularly in the past eight months. “We added 17 more workers in these months and our sales increased from $500 to $7000 a month,” she says.

So far she’s sourced much of the funding she needed to start her business, from various business competitions and regional support programmes.

The first batch of funding came from Sina through a pitching competition she took part in, in 2016 and 2017 which saw her win mentorship and a grant worth $1000. In 2017 she received $5000 from the Tony Elumelu Entrepreneurship Programme. And in the same year her business won a €2000 prize in 2017 from Initiative Teilen.

Then last year Nalugeba was placed as the second-runner up in the 2018 Anzisha Prize, walking away with $12 500 in funding. Half of the prize money went to help her buy equipment, which has helped her to increase the business’s production capacity from 200kg to 1000kg a month.

This, she says has helped increase her sales and “doubled the impact” she expected Uganics to make.

Her business, she claims has already made an impact.

Since starting out, her firm, she says, has been able to reach 2000 families in central and eastern Uganda through campaigns which she claims have contributed to the reduction of malaria by 20% in “specific communities”.

“We have empowered 23 women in oil extraction that have become economically stable with their families and are able take care of their daily needs and are able to cross-finance for the other people in the community,” she explains.

Aiming on securing regional distributors

She now plans to sign on 32 hotels and distributors across Uganda and employ 20 more people. “We hope to decrease malaria cases by four percent in Uganda through our products and the awareness campaigns,” she says, without citing a target date for the reduction of malaria cases.

Regionally, Nalugeba says her firm aims to get distributors in Kenya, Tanzania and Rwanda. “We are currently getting interested distributors in Europe and US which is also great,” she adds.

Age-related challenges

However, the young social entrepreneur admits that running Uganics hasn’t been without its challenges. She says given her young age, she’s often had to battle to get customers and health facilities to trust her.

“I missed out a lot of opportunities to talk to possible partners especially old men, because some receptionists thought I was going to seduce their bosses. My idea sounded impossible to most people in the beginning,” she explains.

But Nalugeba says she’s found that dressing well and holding a positive attitude has helped her to get stakeholders to take her seriously.

“For example, when I enter into a big person’s office, I make sure I am smart, I present myself with what I do, I involve them so they can ask questions and I let them know me as a person.

“In this case they get to know my leadership capabilities which inspires most people including my employees. I let them take control of their responsibilities,” she adds.

‘Mentors contributed so much’

Nalugeba says she’s also got by with a lot of help from mentors.

“They are the people that will believe in the success of your startup even if you have lost hope and they will be with you to make sure you understand and overcome the challenges you face in all directions,” she explains.

She cites Sina founder Etienne Salborn, Philipp Maentelle from Germany, Nigerian marketing executive and entrepreneur Jewel Okwechime and Ugandan social entrepreneur Omoding Geoffrey as her “greatest” mentors.

‘First steps the hardest’

In the end Nalugeba believes that it’s important for entrepreneurs not to make money the most primary motivation for starting a business.

Says Nalugeba: “Money will always come if aim at making a difference when you mean it. Start now and do not ignore anyone that you get to talk to, be selfless and use what you can access now to start. There is no need for big amounts of money now. First build a community.”