It is said that successful people have the habit of doing the things that failures don’t like to do.
It is this spirit of passion for success in retail business that drives David Mukuha, the co-founder and director of Naivas, one of the popular and fast-growing retail chains in the country.
When we arrived at his office on a Friday afternoon for the interview, Mr Mukuha was on the phone. “Please have a seat,” said the short and well-built man, interrupting his phone conversation for a while, in his well-furnished office in Nairobi’s Industrial Area, where Naivas has its central stores.
After listening to an inspiring story about his long journey in the retail business, it is hard to believe that less than two decades ago, Mr Mukuha was a shop attendant in a tiny village at Rongai trading centre on the fringes of Nakuru town.
Lesson 1: Take one step at a time
Naivas Supermarket, which is emerging as a major player in the fiercely competitive retail business in Kenya, has its roots in this village, where Mr Mukuha operated a tiny family shop in the 1990s, with a capital that cannot pay the current salary of the employees at his stores.
“It first started as a small family business serving the village of Rongai in the outskirts of Nakuru town in 1992. I started it after convincing my brother, Simon Gashwe, that this type of business holds a future for us and our family. We raised Sh200,000, which we used as capital for our retail store,” says Mr Mukuha.
From what appeared to be a small family retail shop, the Rongai Self Service Store, as it was known, grew into a major wholesale and distribution business and was registered as a company in 1993.
Lesson 2: Let money work for you
“After two years, we opened a new branch in Elburgon, near Molo. When we realised that the business was doing fine, we took another risk and spent the profit we got to open another branch in Naivasha town. It was in 1996 that we started operating through our supermarket outlets in Rongai, Elburgon, and Naivasha,” he says.
In 1997 the business turnover stood at Sh100 million, he said. “The Naivasha store showed a lot of business potential. We invested a lot in it and due to its fast growth, we made it the head office. In 1998 we changed the name from Rongai Self Service Store Ltd to Naivasha Self Service Stores, as a way of connecting our business to our Naivasha customers.”
Lesson 3: Courage & commitment
The business spread its wings to Nairobi in 2001, where it opened its first branch on Ronald Ngala Street. The directors agreed to close its outlets in Rongai and Elburgon. But Mr Mukuha says operating a business in Nairobi has not been easy.
“Having an established business in Nairobi is hard. The cost of living and operating business in the city is very high. It took us almost two years before the Nairobi store stood on its feet. There were times when we used the profit from Naivasha to pay for the cost of our Nairobi store.” Mr Mukuha, 48, a high school graduate without a college education, believes that success in business is never easy.
Lesson 4: Manage your expenses to make a profit
“I have gone through many challenges in this business. I almost got discouraged. There were times we even lacked money to pay rent, to pay suppliers, workers, and pay other bills because of the rising cost of business. But we have been encouraging each other. What I learnt is that dedication, hard work, and an unrelenting devotion is what leads to success in business,” he adds.
Mr Mukuha says that over the years, Naivas Ltd has established itself as a reputable chain of supermarkets, offering “quality goods at the most reasonable prices in the market”. “Good service to our customers has always been our top priority,” he said. “We have also embarked on training our employees as a way of enhancing the company’s growth.”
Naivas now has 13 branches in major towns across the country: Nairobi, Naivasha, Eldoret, Machakos, Embu, Kitui, and Narok. The chain plans to spread to other areas and go regional in the next few years. “Competition is stiff. It’s hard fighting with the giants but our aim is to serve our customers. We try to reduce our overhead costs to keep our clients. We generally target ordinary Kenyans.”
The company’s monthly turnover now stands at Sh650 million, or Sh7.8 billion annually. The monthly expenditure for all the branches ranges between Sh75 million and Sh80 million, which includes paying workers, rent, transport, and other costs.
Lesson 5: Information is power
“I think that in the next five years, if there will be a good business environment, our turnover will read a billion plus. I believe that when you run your business with honesty, God will bless the work of your hands and you will get rewarded handsomely.”
Mr Mukuha says that whether educated or not, the ultimate objective of every individual entrepreneur is to be his or her own boss, provide work for others, and help in building the nation. “Reading books or going to school to take business lessons are always good decisions, but I consider experience as my best teacher. I got lessons from successful businessmen and women and I also learn from my mistakes,” he says.
Lesson 6: Marketing, marketing
So what has been his secret in retail business? “I think one of the biggest issues I see is that as small business entrepreneurs, we get so busy running our stores that we don’t take the time to run our business. We get so caught up in the day-to-day details that there is really no strategy to map out the future, then make it happen. The secret is to schedule time to grow one’s business.”
According to him, the most common mistake that most entrepreneurs make is that they don’t spend enough time marketing their business and often confuse this with advertising. “Advertising is just one part of marketing. People have a tendency to just run an advert because it is something they can take off their checklist. But only 50 per cent of your advertising is successful. I think retailers should not only run adverts but should also find other ways to call customers to action,” he adds.
Mr Mukuha says the profit motive as well as the attendant visible achievement associated with successful entrepreneurship are the driving forces for any business venture. “There are many challenges in the retail industry. But one has to think fast, be smart and act responsibly so as to run his/her business peacefully. The challenges are there, but what really counts is how you act when severe challenges come your way,” he adds.
Naivas Ltd now employs more than 1,500 workers directly and about 3,000 indirectly. The chain has recently integrated a loyalty card solution for use in their stores in collaboration with Tuskys supermarket.
First appeared here