Business lessons


Business lessons from seasoned entrepreneurs


You have a new business, or are thinking of starting one. Or maybe the one you have is not doing as well as you had envisioned. Before you cut your losses and run, you had better read and learn from these four entrepreneurs. They have lost money and watched their business ventures crumble to the ground, but have not allowed failure to keep them from trying again.

Davis Agoi, 29

The amazing closet

Davis Agoi, 29, The amazing closet. PHOTO|

Davis Agoi, 29, The amazing closet. PHOTO| KANYIRI WAHITO

“Don’t start a second business if the operational one 
cannot run without your constant presence.”

“In 2015, a friend who sold a group of us second-hand clothes from Gikomba Market informed us that he was quitting the business. Coincidentally, I had just resigned from my job to help my uncle manage his business, and it occurred to me that this would be a profitable business since this friend always had clients. I had two problems though; I didn’t know much about Gikomba Market and I only had Sh 5,000 in savings, an amount I felt was too little to start any business.

After mulling over the issue for some time, I decided to jump right in, although still anxious of losing the only money I had. I went to Gikomba and bought 10 shirts, which I resold, making a huge profit.

Within three months, I had made enough money to buy more than 20 shirts. A friend offered me space in his office, and by mid 2015, I was making enough to rent my own space. With savings from the business, I decided to open a butchery in February last year in Ruaka. It cost me around Sh 100,000 to start off, money that went towards buying the weighing scale, freezer and items such as knives.

The business started picking up within the second month of operation, and although I wasn’t making any profit, what I made could pay for the premises and the butcher I had employed. In April 2016, I decided to withdraw Sh65, 000 from my mitumba business and set up another butchery. This was the beginning of my misfortunes. I found out soon enough that it was difficult to manage three businesses. To begin with, the employee at the first butchery quit without a notice, a factor that immediately brought the business to a standstill.

With time, the two butcheries started pulling my clothing business down because there were days I couldn’t manage to go to Gikomba. One day, it dawned on me that I risked losing the three businesses, and therefore had to make a hard decision. I closed down the butcheries. The two businesses had really affected my main one, and for two weeks after the closure of the butcheries, I stayed indoors, demoralised. I, however, decided to fight on, and I am glad that the business is doing well once again. In a good month, I make between Sh30,000 and Sh50,000.

I have since registered for Centonomy Entrepreneurship classes to learn more about how best to run the business.

Why the butchery business failed:

I thought that since I had identified a need, the business would succeed, however, I didn’t have a good understanding of the meat business, leave alone how to manage a butchery. Having staff who didn’t share my vision also contributed to the failure.

How I got back on my feet:

I made lots of sacrifices, including opening the business earlier and closing later than I did before. I also had to cut on comforts such as sleeping in on weekends, eating lunch, buying movies and books.

Lessons learnt:

  • Before you start a second business, you need to be certain that the operational one is stable enough to sustain itself and run without your active presence.
  • Be very diligent when recruiting employees.
  • Do not let the money you make after every sale fool you that you are doing well, and constantly review your progress and keep accounts.

Eunice Maina, 38

Founder & Director Bismart Insurance

Eunice Maina, 38 Founder & Director Bismart

Eunice Maina, 38 Founder & Director Bismart Insurance. PHOTO| CHRIS OMOLLO

“A business partnership is akin to marriage, take time to get to know your partner.”

In 2007, Eunice relocated from Nairobi to Mombasa after her husband got a job transfer. While there, she reconnected with two former workmates and they decided to start a business together. With a little survey of the area, they were convinced that a cyber café would do well. They managed to raise Sh700, 000, which they used to buy 10 computers, computer accessories and also meet expenses such as rent and designing the premises. Prior to opening the business, they did not discuss how it would operate; all they were focused on was making money. They did not even agree on the steps they would take should the business not perform as expected.

“We opened in February 2007, and during the first few months, the business was doing well because we could afford to meet expenses such as rent, Internet bills and electricity. However, after the elections in 2007, due to the unstable state of the country, the business started going down. We didn’t have money to renew the municipal licenses or pay rent, which was about Sh35,000 a month. Convinced that the business had failed, in April 2008, we donated some of the computers to a needy school in Nyali and relocated to a cheaper premise which cost Sh7,000.

We also decided to offer web design since we had a background in Information Technology. This was even harder because clients were hard to come by. We pumped most of our savings into the business to keep it going, but it was in vain. We finally closed down in February 2009, and I joined an insurance company as an insurance sales agent on commission basis. Being employed was even tougher – for the first three months, I had no client, so I didn’t earn anything. I wanted to be self-employed, but since I didn’t have starting capital, I resolved to continue working.

I also discovered that people prefer to buy from successful people, therefore one has to work really hard to succeed for people to believe that you are in it for the long run.”

A holder of a BSc degree in IT from the University of Nairobi, Eunice’s determination saw her rise up the ranks within the insurance company, and by end of 2010; she was promoted to the position of unit manager, and later, to country manager of a micro insurance product in 2015. However, the urge to run her own business never left her, and in December 2016, while at the peak of her career, she quit her job. She was certain that she was not cut for a 8am to 5pm job.

“I partnered with a developer to come up with an insurance product, only for him to rip me off by registering the company as his. Although this time I didn’t lose much since I had only contributed the Sh25, 000 needed to register the company, it was an awakening call. I took an introspective look at my business journey and I discovered that I needed to be careful about who I partnered with. I founded another company, Bismart Insurance, a platform that connects customers to the best insurance and investments solutions in the market.

We have been around for only four months, but it is such a promising business. Today, we have over 45 customers, and the number is growing by day.

Why the initial businesses failed:

My partners and I didn’t do an extensive research on the business we wanted to establish.

We also didn’t set aside some money for a rainy day.

As for the second business, I didn’t do a background check on my partner, I just focused on the skills he was bringing into the business.

How I bounced back:

I got back in employment to gain more experience and also save enough to set up my own business in future. I also enrolled for Centonomy classes on entrepreneurship. Continuous learning on how to keep a proper balance book has also been of great help.

Lessons learnt:

  • Partnership is akin to marriage. Take your time to get to know your partner and ensure that you have a written agreement.
  • You also need to start a business that you are passionate about.
  • It pays to be persistent.

Eunice Wafula, 35

Managing director, Talinda East Africa

Eunice Wafula, 35, Managing director Talinda

Eunice Wafula, 35, Managing director Talinda East Africa. PHOTO| DENNIS ONSONGO.

“Don’t be afraid to borrow. Debt is not always a bad thing.”

“After graduating from the University of Nairobi with a Bachelor of Science, Physics, in 2005, two friends and I decided to start a homestay business, which we registered in 2006. At the time of inception, we were all employed and planned to run it as a side hustle. Big mistake! The business was inexpensive to start because all we needed was the registration fee and some posters. We advertised through word of mouth and online platforms.

That year, we got a contract with the Ministry of Youth to find hosting homes for about 250 youth who were attending the Youth Enterprise (YES) Summit – that is the moment we realised what we had got ourselves into. We didn’t sleep for the next 72 hours. We had to work for our employers during the day and deal with hosts and guests at night. Although, we made a profit from this gig, we realised that we couldn’t achieve operational excellence, and even though we had employed two staff to help in the daily operations of the business, managing it from a distance was quite a tussle.

We agreed that it couldn’t run as a side hustle, and that we needed to learn more about operating a business. We would also find out that one of the employees had gone behind our backs and started a company offering similar services and was using the company’s resources to get her own clients.

We called it quits after operating for about a year and a couple of months.

In 2010, armed with better business skill, Sh 200,000 and more focus, I saw an opportunity and decided to grab it. I quit my job and started an ICT company, Talinda East Africa, an IT company offering Wireless Networking and advanced Telephony systems to businesses, high-end hotels and education institutes.

For the first six months, I was the sole employee, with my car as the centre of operation. In January 2011, I hired my first employee.

Within a year after establishment, our advanced voice systems expertise was used by a leading service provider to launch Kenya’s first Hosted IP PBX telephony system for businesses. The system was delivered in conjunction with a German manufacturer and French system integrator. This earned us some good cash that capitalised the business towards growth and enabled us to hire four more employees and move to our own office.

Although the entrepreneurship journey has had its twists and turns, I’m proud of how far Talinda has come. We are the currently the leader reseller and system integration service provider of IT, Telecommunications and Audio Visual solutions for mid-size businesses in East Africa.

Why the business failed:

The first business failed because my focus was split between my job and the business. You cannot manage a growing business from a distance.

How I bounced back:  

I came back to the world of business focused on one thing. My time, effort, energy and money were all now focused on the success of the business.

Training has also been a major part of the journey. I have taken entrepreneurship courses with Stanford University, Vital Voices, and Strathmore University. An entrepreneur never stops learning.

Lessons learnt:

  • Until you can completely delegate duties, don’t manage your business from a distance. Also, seek the best entrepreneurial support group.
  • Taking care of yourself and your family will do wonders for your business.
  • You need an accountability partner, someone you can share your achievements and challenges with.
  • Don’t be afraid to borrow. Debt is not always a bad thing.

Patrick M. Mwiti, 33

Managing Director, Newskin Media Limited

Patrick M. Mwiti, 33, Managing Director,

Patrick M. Mwiti, 33, Managing Director, Newskin Media Limited. PHOTO| COURTESY

“The good thing about failure is that it teaches you some important lessons that success cannot.”

“With Sh2, 000 borrowed from a friend, I started my first business in November 2005 after dropping out of college due to financial constraints. I was studying IT and media. I made mainly t-shirts that featured Christian graphics and African prints. I started with just three t-shirts, which got the attention of artists in the gospel industry such as the late Kaberere, Zaidi Ya Muziki band and Njugush of K-Krew.

However, the business collapsed in 2007 due to lack of proper management skills. I ended up losing all my equipment since I was unable to pay my rent arrears.

Still determined to succeed, I reached out to friends for ideas, and one introduced me to branding. I did some research on it and figured that it was a business I could excel at since I had excellent graphic design skills. I did not have the capital though. I approached a few friends with the idea, and one of them bought into my proposal. In 2008, we jointly registered a business together. He brought in the capital and business networks while I offered my skills. The business did well, but at the start of 2009, we had internal management strangles that paralysed the business operations. We decided to dissolve the company and part ways in 2010. On the brighter side, I had gained some management skills and build some networks.

Armed with this, I registered a branding agency, Newskin Media in 2011. I didn’t have money to operate the business, and had to borrow a loan of Sh200, 000 against my father’s land title deed. The business was looking up, and that same year, I got married. My wife would later become my business partner. Unfortunately, in January 2012, our office was broken into and we lost two laptops that contained our clients’ data, forcing me to borrow some money to replace the laptops and negotiate with the landlord for a one month’s grace period to enable us regain our footing.

Today, we have a fully fledged corporate branding agency with offices in Nairobi and Mombasa and directly employ a full time staff of five and are in the process of recruiting two creative designers. We have also been able to offset our debts and are looking forward to expanding the business.

Why the first business failed:

When I started the business, I didn’t know that it is important to keep proper books of records and separate my money from the business money. The partnership failed because we didn’t have a clear outline of who was to play which role and how money earned would be used.

How I bounced back:

When our office was broken into, we had no budget to market, and relied on referrals to bring in new clientele. At the same time, our church began a forum called Christian Professionals Networking Forum (MCN) which greatly exposed us. Our interaction with business owners and key decision makers in various corporations within Mombasa was our breakthrough.

Our clientele has grown, with our main clients comprising of mainstream local and international brands. We specialise in supply of branded marketing merchandise, office partitioning, décor and general branding, logo and website designs, staff uniform supplies and outdoor signage fabrication and installation.

Lessons learnt:

No amount of money is too little to start a business, having started one with just Sh2, 000. I have also learnt that without good management skills, a business is as good as over.

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