VENTURES AFRICA – Every entrepreneur’s biggest headache is seed capital with thousands of businesses in Africa still stuck at the idea stage and for the lucky to take off, hurdles like high cost of doing business and navigating in uncharted waters have turned out to be their Achilles’ heel. Makindu Motors’ story is no different, but a will of steel has seen scales tip in its favour. Having started from scratch in 1992 as an informal sector venture commonly referred to as Jua Kali in Kenya, swahili for hot sun denoting the working conditions that traders in the sector grapple with, the company began with just three employees, selling ordinary scrap items and old bicycles mainly to teachers in rural areas.
According to the firm’s Managing Director, Joshua Kamonzo, their idea was to reach out to rural people especially teachers who are better placed on terms of loan acquisition and repayment.
“We wanted to help teachers reduce the cost of travelling to their schools and so we opted to sell them old bicycles. And because they could get loans from their Savings cooperatives, we found working with them very conducive,” says Kamonzo.
The company witnessed high demand for bicycles by teachers and other clients and after carrying out market research, the idea to expand the enterprise was born.
According to Kamonzo, they started selling old motorcycles at affordable prices to clients before venturing into Dubai in 2002 to ship in new motorcycles to potential buyers, most of them teachers.
The managing Director says they were craving for expansion and in 2006, a time unemployment was soaring, Makindu Motors decided to venture into China to source for more motorcycles due to the overwhelming demand from teachers and motorbike operators referred as ‘boda boda operators in Kenya.
“Sourcing for motorcycles from China was cost effective as opposed to getting them from Dubai. Initially we would import them readily assembled from Dubai and this threatened our business because they would arrive with some dismantled. Forcing us to sell them at low prices,” says Kamonzo.
He terms the importation of motorcycles parts as the best option since it lowers the risks involved in damages and the portability that enables the importation process to be effective.
Today the company imports approximately 10,000 new motorcycles annually from China under different brands, namely; Sky Go, Yamahana and Fly boy.
The firm currently with over 100 employees has grown to have an assembling plant and a factory of its own. It now ships in new trucks ranging from 3 to 5 tons of Jack trucks, tractors for farming and three wheeler rickshaws commonly referred as Tuk Tuks.
Besides Makindu Motors has dealers spread across the country who ensure constant supply of their products. The cost of a motorcycle ranges from $595 to $950 depending on the power, cc, durability and fuel consumption.
And as the company celebrates its 10th Anniversary, plans are underway to increase its presence in East and Central Africa. It targets Rwanda, Burundi and Southern Sudan by 2013.
Says Kamonzo. “We want to penetrate these markets and compete with established brands that have been in the industry longer than we have. South Sudan is a potential market we would love to explore and even further beyond.”
The Coastal Kenya based company prides itself as the first local motor company to have an assembling plant in Kenya with supply chains spread across major towns including Kisumu, Nyeri, Thika and Mombasa.
However, it still faces competition from other Chinese brands. But Kamonzo is optimistic they have gained popularity especially from boda boda operators due to the fact that their motorbikes consume less fuel.
Having seen the company reach to where it is, Kamonzo advices new entrepreneurs not to shy away from taking risks but instead prepare for challenges along the way.
“If you decide start a business, be committed to it. If you’re not trying to do you probably won’t overcome the bumps on the road. Business owners must decide to either have their business stay flat, or dive in with both feet to expand their company to the next tier and reap the rewards therein,” he advises.
Makindu Motors has also come to the rescue of jobless youths by starting Yamahana Driving Schools to train them and constantly urging them to start small saving groups to enable them purchase bikes at lower prices.
He has also made a clarion call on young people to approach private investors and banks for funding.
“While raising funds to finance your business, approaching a private investor is an option you may want to consider. These are people who often use their wealth as a tool to encourage young entrepreneurs living in their communities,” he added. The company is also rolling out plan to sensitize locals on ways to curb road accidents.