What you need to know:
- When he started the business, he was a Jack of all trades since he could not afford to employ.
Walking away from formal employment was one of the hardest things that Charles Okadia has done, but looking back, he says that the risk he took 10 years ago was worth it, because it has presented him with endless opportunities.
Before launching his paint and adhesives manufacturing business, Chemsols Limited, Okadia had worked for more than 20 years in various corporate organisations, including Crown Paints and American Ink, both manufacturing companies.
It is during this time that he developed a burning desire to launch his own business, in which he envisioned himself not just making a decent profit, but also creating jobs and enriching livelihoods.
His dream came true in 2009 when he set up a manufacturing company in Nairobi's industrial area, starting with making paints for carton and paper bag manufacturing companies.
But he had not envisioned how challenging setting up and running a business would be, and within a short time, realised that things would not be as easy as when he was in employment.
“When you leave corporate life to run a business such as mine, which most people refer to as Jua Kali because they don't see us as serious business people, you experience what is called baptism by fire,” he comments, and adds:
“Entrepreneurship is not as easy as working for a corporate which already has structures in place.”
One of the challenges he experienced was a shortage of staff to carry out various functions in the business, a challenge brought about by lack of enough financing, a difficulty that hinders the progress of many small and medium enterprises.
“When you are a start-up, there are very few banks that will give you an overdraft, and if you are in the manufacturing space, no supplier would be willing to give you raw materials on credit,” explains Okadia.
Setting up shop in an industry where he had to compete with established players who could afford to give credit, he ended up missing out on new customers because the arrangement of ‘buy cash and sell on credit’ was one he could not afford.
With no money and just one employee, Okadia had to handle the roles of accountant, salesperson, production line manager and several other duties all by himself.
“When I was starting Chemsols, I had only one worker, it would clock 10am yet there would be no tea for me, which I had been used to when I was employed, that is when you realise you are on your own,” he quips.
To lessen the workload, he was forced to employ people with no skills, some of whom had a secondary school education, and train them on the job. With time however, he managed to surmount the challenges and grow his business.
Fast forward to 2021, Chemsols Limited now employs 30 people and generates annual turnovers of nearly Sh100 million. The company specialises in house paints, car paints, water-based and solvent-based adhesives and has since expanded to Uganda.
"Over this period, we have managed to engage accountants with CPAs, qualified sales personnel and chemical engineers - it has taken time, we have had to climb the ladder slowly but we finally got there,” he says.
Okadia says he is proud of achieving what he set out to do, which was to create jobs, and attributes his success to getting into business with that objective in mind.
Drawing from his experiences running a business, he says that there is still much more the government can do to make the business environment more conducive for SMEs, thereby enabling them to offer meaningful employment to the labour market and absorb the unemployed.
“The government hasn't done much in terms of financing for SMEs, recently, it was announced that they would be giving some loans to SMEs, but there is still a limitation in that they have not taken into account all groups,” he points out, adding that especially now when Covid-19 has affected many businesses, it becomes even more important for the government to establish loan facilities that could help ensure business continuity for SMEs.
“When Covid-19 hit, most of the suppliers could not import raw materials, currently, most containers are making their way to the US and Europe, but there are no containers coming to Africa, this shortage (of goods) means that prices have gone up as well.”
With customers unwilling to fork out more for products, manufacturers are being forced to bear the added costs.
“An increase in the cost of raw materials is affecting the whole manufacturing industry, for instance, colour pigments such as iron oxide, which used to cost Sh40,000 per ton in April last year now costs Sh66,000,” he says, while the cost of other materials like titanium dioxide, a pigment, has increased from Sh300 to Sh450 per kilogramme.
“Generally solvent prices have gone up by 15-20 per cent, an effect of the Covid-19 pandemic,” he says, stressing that if the government does not come to the rescue of businesses like his, many will not survive.