Self belief: I always knew I was built to be an entrepreneur
What you need to know:
- I didn't let the idea die. I burned the midnight oil and prepared a business proposal which I presented to a financial institution for funding.
- After doing my calculations, the startup capital came to around Sh600,000.
- I was skeptical if any bank would accept to loan me that amount without collateral, but I chose to give it a try.
On the outskirts of Meru town lies a busy trading outpost known as Makutano. Among the many businesses that dot the town, Milestone Supplies stands out. This is an oil depot that supplies fuel to others in businesses, including petrol stations, countrywide. The face behind the company is 35-year-old Eutycus Mwenda Mugambi.
How did your investment journey begin?
After sitting for my Class Eight examination in 2005, I became a porter at Gakooromo market in Meru town and hustled while saving to get business capital. With a startup capital of Sh5,000, I opened a food kiosk and operated it until 2008 when I decided to expand my education by enrolling for secondary education.
You opted out of business for education?
I did not close down the establishment, I delegated the running of the business to someone else, but I kept track of everything. After clearing Form Four in 2011, I resumed operations full-time, until 2018 when I decided to change my scope of business to maximise on profits.
You mean things weren't going as planned with the shop?
Not really. They say having a diversified income portfolio pays. After conducting a detailed market study, I realised that venturing into the petroleum industry would bring me more profits, but I had to find a way to avoid competing with the established petrol stations. I decided to be the go-to person, such that I supply them with fuel at a cheap price so that they don’t incur additional transport charges while trying to get the commodity from elsewhere.
That must have been a capital-intensive venture, wasn’t it?
The idea looked noble and workable, but only on paper, as I had no means of getting it off the ground.
So how did you beat the desperation and get the business going?
I didn't let the idea die. I burned the midnight oil and prepared a business proposal which I presented to a financial institution for funding. After doing my calculations, the startup capital came to around Sh600,000. I was skeptical if any bank would accept to loan me that amount without collateral, but I chose to give it a try.
How did it go?
I have always been in good books with Sidian Bank, and when I approached the institution and explained my business plan, they were convinced and pleased. They advanced the credit facility to kick start the venture.
Most startups struggle to get profits especially in the first few months of operations, how did you handle this period?
I had already figured that out by roping in a few petrol station operators and when the first consignment landed at the depot, I had a ready market to distribute to, albeit a limited one with hired delivery lorries.
The company is now six years old, with a staff of 15 – eight drivers, four office workers and three field agents. The latter are tasked with look ing for new customers as we spread to have a countrywide reach.
What of the eatery business that ushered you into entrepreneurship?
It is still around but under the stewardship of a sibling. I handed it to him so that I could concentrate on the current venture. Even in an organisation, you may find you've outgrown a role and look for something more challenging if you want to develop in that career. No one wants stagnation. I wanted something more challenging and rewarding, and I saw it fit to hand over the business and focus on nurturing my new baby.
What are your company's core values?
Milestones Supplies was set up in 2018 and immediately started trading as a physical supplier of petroleum products – diesel, petrol, heavy fuel oils, lubricants, bitumen, kerosene and synthetic oils. The company was formed with the focus on the end-user, or the client, and providing the best quality fuels at the most competitive prices resulting from a low cost and highly efficient operation. We are looking forward to recruiting more staff as we grow our portfolio.
How do you get good hires?
This can be a daunting task. You never know if an employee is stealing from you like the case where drivers have been caught or accused of siphoning oil and selling it for a quick shilling. But during recruitment, we always do a strong background check. We Look for integrity and a strong work ethic. We hire motivated people – employees with talent. We Look for high-performing individuals, choose those with initiative for work, and follow the laid down rules.
What are some of the challenges you’ve faced so far?
Every business has its fair share of challenges, especially lack of capacity for bulk storage, a weak revenue collection system, and corrupt law enforcement agencies who demand kickbacks even if one has complied with everything. Also, small players in the oil industry cannot import the commodity because a small cartel is the one that runs the show. The one who gets the government tender is the one who supplies to the rest.
When global prices are low we see little or marginal drop in prices, why?
A myriad of factors come into play, like taxation and, recently, increase in VAT which has a ripple effect in all sectors of the economy. Moreover, the landed crude could have been a consignment that was purchased months ago, before the price plunge.
How do sudden price changes affect the business?
Any investor will tell you they're always prepared to cope with market volatility. What matters is how healthy your balance sheet is at the end of the day.
What advice would you give to those about to establish startup ventures?
Always develop your entrepreneurial skills early if employment is not for you. Create attainable goals and read the success stories of those before you. Find an investor in a similar field who succeeded and seek advice. Don't think you're taking the investor down or bringing unhealthy competition, you may never know the business rapport you two will have. Establish a healthy work-life balance and always motivate your employees.
Would you ever leave business for employment?
Even if the business was liquidated, I'd never go that route. I would strive to remain self-employed. I would look for a market segment to explore and fill the gap. I feel there's no fulfilment in employment other than working to meet the expectations of others.
