Adaptability: Secret to entrepreneurship
The greatest myth about entrepreneurship is that it is only available to people who are already wealthy.
The second greatest myth about entrepreneurship is that you need external financing to start your business.
But, these are just myths. Some people have worked their ways up despite theirpoor backgrounds and without external financing.
Michael Wambugu Wainaina popularly known as Wambugu wa Mt Kenya is one of them.
Born and raised in Othaya, Nyeri county from a poor background, Wambugu was lucky to acquire a high school education.
However, he couldn’t proceed to the university despite passing his final examination quite well.
Left with no other option, in 1979 Wambugu travelled to Nairobi to try his luck in employment.
“I was 19 years old when I came to Nairobi. Luckily I secured employment as a fleet manager with a certain Indian man. Then it was very easy to secure employment if educated,” he says.
However, because of his low salary, he quit six months later. With no relatives in Nairobi, he joined his village mate who was running a timber selling business in Gikomba market.
He learnt the basics about the business from sourcing to marketing and he was ready to start his business along that line after two weeks.
Once he was given some space, he was ready to start his venture. Luckily, as he was starting he spotted an opportunity.
A new market was coming up at Ngara’s Nyayo Market yet no one was supplying traders with timber. He took up that opportunity and the rest is history.
“I supplied timber for all the traders single-handedly. In three days I had made Sh2,000 profit.
We were getting our timber from shipping pallets and they were readily available.
Each pallet was going for Sh4 and we used to buy them at Sh1. The profit motivated me and I never looked back,” he explains.
From the sale, he bought his first pallet consignment from Thika. He parted with Sh900 for a 10-ton truck and Sh600 for transportation.
Since there’s no sure-fire formula for instant success, Wambugu had to face a fiercely competitive market.
However, despite the competition, his business started booming. He even started sourcing more pallets from General Motors.
Two years later his supply chain was cut. He could no longer afford to get the pallets in bulk and sourcing in small bits was becoming tiresome. He had to think of another business.
“Where I was sourcing the pallets from, rules changed. One was supposed to tender for a contract.
The tender required one to deposit Sh20,000 and I had only managed Sh12,000 profits. That is how I lost those sources,” he explains.
As he was thinking of which business to engage in, he came across people who were selling hardwood timber.
He saw a business opportunity, but no one was willing to tell him where they got the timber from.
He eventually learnt they were getting it from Mount Kenya Forest, and he decided to visit the place.
It wasn’t easy to get to the timber factory, the Nithi Timber Cooperative Society, but he eventually did it.
Armed with Sh12,000, he ordered timber. However, since orders were too many, he was asked to wait until his turn. As he was waiting, he spotted another business opportunity.
“I realised at the factory there were so many wood offcuts (timber less than six feet) regarded as waste.
Since they were one of the most sought-after products by furniture makers, I decided to seize that opportunity,” he says.
He had to convert the amount he had paid for normal wood into funds for the offcuts. He also hired a lorry for transportation.
Since he was the only one running this business, it performed well, making it easy for him to dominate the market even after others started similar businesses.
The more he sold, the more demand kept growing. It reached a point even the factory itself couldn’t keep up with his order.
At this stage, he had leased more yards for storage and had introduced the normal timber in his business. He also partnered with a friend to open a hardware business.
However, in 1986, the president declared a ban on the felling of indigenous trees in all public forests.
He was forced to outsource timber from the private sector. The turn of events was a big blow to his business and eventually, he called it quits.
“Timber business was good because I had dominated Nairobi and Malindi markets, but it got to a point I had to quit.
The competition was becoming intense and profits margins were shrinking. I left the timber sector in 1990.”
Afterwards, he concentrated fully on his hardware business. Since such businesses were sprouting rapidly in Nairobi, he had to make his venture unique.
After his research, he learnt the business was booming, especially for Indians because there were not after huge profits and this made them sell in bulk.
Realising this, he followed that path. In 1991, he parted ways with his partner and he expanded the business.
He turned the retail business into wholesale, but soon he faced another challenge.
The property on which his business was buillt, was up for sale. Since he didn’t want to relocate, he secured a loan from then Barclays Bank and bought the property and constructed his first building.
So far he has opened three other shops still in Gikomba. Today Mount Kenya General Hardware and Electricals Ltd has not only dominated the hardware business in Nairobi, but across the country.
And what are his secrets? He says the business has been successful because he is always present to oversee everything, treats his staff well, and prioritises customer feedback.
Apart from that, they don’t compromise on the quality and quantity of their products. He has also automated the whole system to ensure transparency and accountability.
“Because of poor management, I have seen most of my competitors’ close shop.
This made me embrace my leadership slogan which is “Management by Walking Around (MBWA)”.
The business employs about 110 people (80 on permanent basis and 30 casuals).
In the future, he wants to start a manufacturing factory since he has built his customer base.