Kenyan businessman Naushad Merali known for his Sameer Group investments in banking, telecommunications, manufacturing, agriculture and other sectors, gave a talk at a new Entrepreneurs Club event on Thursday. He briefly spoke about his business life and then took part in a Q&A session.
Excerpts
He spoke about how he grew
up in Mombasa, and would take a bus twice a month to sell Indian sweets in
Moshi to pay for school fees. And when worked for a few years at Ryce Motors as
an accountant, he was able to buy it out from the owner who was retiring and
also convince Daihatsu that he could sell their short wheel base vehicles in
Kenya, landing their franchise.
(Think) Big: when he signed the deal to buy
first American bank in London he did not have the money, but by the time he
flew back to Nairobi people had heard and were amazed and want to partner with
him - so by the time it came to conclude the deal, he had a cheque to pay.
Same with Kencell - when MTN bought
out Vivendi they were sure that they'd get their way and he's not be able to match their offer, but he chose to exercise his preemptive rights and spent 15 days flying around
during which time he got funding from Celtel.
Exits: Don't get emotional about owning a business, and know when to cash out. Selling out, and getting liquidity and value for all your hard work is the only way to grow. e.g. He took money
from communications, and put it into the fibre cable business.
Give Back: Do
this and you’ll get back more. He’s done this by listing his shareholdings,
creation of the Jaffrey Sports Club on
prime land that is free for all the public to use, and other philanthropic
activities that his wife manages.
Growth: Diversify, but don’t take money from one business to put it in another one. Grow each one
with its own capital, and if one fails, it goes alone.
Opportunities (Take advantage of): On a flight he sat next to
a man who he conversed with and found that was trying to sell his company
called Sasini. He had no idea about tea and coffee, but shook hands and had a
deal. Same with his IT investments did
not know much
Also when President
Museveni told him that farmers were pouring milk because there was a shortage
of milk processing, he set one up and expanded the capacity of the country to
process milk many times over.
Partnerships: Choose the right partners - business partnerships are harder to break
than marriages and you need partners who align with your vision for the next
few years . He found that his new South African had a different style than
him so he cut back his internet interests.
People: Kenya’s greatest resource is its people – hardworking
resourceful staff. He mentioned how he motivated his salesmen at Ryce Motors,
by giving their wives cheques to hold, that would only be signed if their husbands sold
enough car volumes.
Also he is very protective
about creating and retaining jobs for workers (the Sameer group now has 24,000
staff). He said when Firestone chose to stop manufacturing their brand in Kenya
(and shut production), he bought them out and created a new brand - Yana.
Succession: On business succession - life is finite, and many
businesses here won't last more than one generation because of secretive
management styles, unlike those in developed countries that last hundreds of
years. He advises that you bring your kids into the business open your books
share your secrets, but don't hire relatives as they are very hard to fire, and
can cause domestic stress and lawsuits.
TEA: His
motto for business and finding new partnerships is TEA T - trustworthy, E
efficient A – attitude (i.e. work with people with positive attitudes).
Technology industry (The problem with the ..) is that companies require
continuous investment year after year. so tech entrepreneurs should know when
to take on new partners and funding, perhaps giving up a little equity to like
minded partners, if they are to grow.
Final advice: Invest in agro processing
& food value addition as that’s the future.
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