Management Magazine
Hands on Management

How to avoid start-up blunders

BY REITZ MUREITHI

James Ndirangu, founder, Interpro Africa learnt early in business that having a mentor, carrying out research and doing a SWOT analysis are key steps that each entrepreneur should make before setting up a business.

According to the 2018 statistics released by the Kenya National Bureau of statistics, approximately seven million Kenyans are unemployed. With such a startling number that places the unemployment rate at 7.4 per cent, it is no surprise that many Kenyans are now resulting to starting businesses. The majority in this group are graduates who walk out of institutions of higher learning armed with diplomas or degrees. To many, these become mere papers as fate leads them to fields that are miles apart from their area of learning. One such individual is James Ndirangu, a former student of Karatina University. Ndirangu studied Hospitality Management but never practised it after campus. He instead ended up being an IT consultant. 

“I started out as a data entry personnel but was pulled towards finding IT solutions for the firm. Along the way, I decided to resign and start my own company,” narrates Ndirangu. He founded Intepro Africa Limited in 2017, a business that is based at the heart of Nakuru town. Running his own enterprise gives him freedom to innovate, something he had long desired. Aware that the field of Information Technology was foreign to him, he began by doing his own research, an action that he believes saved him from making newbie mistakes.

“It is advisable to have a mentor to walk you through the initial stages of the company, but in the absence of one, you must do your own research,” he warns.

Managing business finances

Save for the usual teething problems that all budding companies go through, Ndirangu admits that managing finances is a crucial part of his business. With an irregular income that is dependent on the number of customers, the country’s political stability and a stiff competition, he has had to device ways of keeping a steady flow of income.

“There are times when clients fail to pay on time and in such moments, I have been forced to apply for loans with an aim of buying equipment and furnishing other bills in the office,” Ndirangu states with a faint laughter.

He believes that, in the current fluctuating economy in Kenya, it is hard for a business person to run a company without supplementing their expenditure with a loan which comes in handy when one has plans to expand the business. 

High taxation

Despite the government offering attractive tax incentives to new investors, Ndirangu observes that existing companies are feeling the blow of high taxation “The government has placed 15 per cent levy on the internet. It also recently placed a tax on computers and computer related items. This takes a toll on the ICT business instead of making the market conducive for the players within,” he laments.

He is, however, consoled by the efforts that the County Government of Nakuru is doing to support ICT in terms of providing free WIFI hotspots to ease access to information.

Although Intepro Africa Limited is a growing company, Ndirangu has learnt that a ballooning workforce can easily drain his company and lead to its ultimate failure. “The lesser the clients I have, the fewer the people I should employ and vice versa, as the number of employees depends on the amount of money the business is bringing in.”

Business acumen

When it comes to balancing the books, Ndirangu notes that this too is an important aspect of the business as it gives a clear picture of the state of the business in terms of profits and losses. 

“If the person has no knowledge of accounting, they can outsource an accountant at an affordable fee,” he quips, further stating that the massive death of start-ups witnessed today, is due to the lack of resilience from the business proprietors.

“No amount of challenges should push a business person out of business. One must do the SWOT analysis before setting up. This helps in foreseeing any challenges and putting measures in place to counter them.” Ndirangu is no greenhorn when it comes to business challenges. He recounts his experience, when he made huge losses a year after launching, and this saw him contemplate selling the business off to a competitor. “I had decided to sell my company to a competitor and forget about entrepreneurship altogether. At the last minute, one of the big clients who owed me a sizeable amount of money paid up and the company was resuscitated,” Ndirangu recalls.

Despite these challenges, he believes that prayers, a fighting spirit and in-depth market research are key to a successful business anywhere in the world. His advice to first time business persons is to be prepared to fight for their business amidst the storms that may rage on.

Ndirangu hopes that in the next 10 years, Intepro Africa Limited will answer to its name, and become one of the leading IT consultant companies in the continent.

Reitz Mureithi is a Communications Officer at the County Government of Nakuru and a freelance journalist based in Nakuru. Email: wmooray@gmail.com

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