Simon Gathecah: I quit a CEO job to help SMEs access funds and grow

It takes courage to quit a six figure salary job as a Chief Executive Officer (CEO) to start a private practice. Two years ago, Simon Gathecah, a strategic planning consultant and business mentor, took this bold step. He set up Pearl Insights Ltd, a consultancy firm which helps connect low income entrepreneurs to finance and market.

Gathecah had worked for 14 years in accounting and managerial capacities for several firms. These included senior audit manager at Kinyori and Associates, Head of retail banking at SMEP microfinance, and Chief Executive Officer at Daraja microfinance bank.

During this period, Gathecah says he realised a few things which did not sit well with him. For instance, he observed that consultants spent time with management and the board to develop plans which did not incorporate the actual needs of customers in the grassroots, a solution better known as boardroom based strategic planning.

This prompted him to quit employment and start dealing with such issues head on. The decision to quit the position of CEO at Daraja microfinance bank came as a surprise to his colleagues as well as family members.

 “I was taking a big risk, but it was time. I thought to myself, if people trusted me to be a CEO of a company, why wouldn’t I trust myself to run my own company? ” said Mr Gathecah in an interview with powering SMEs.

It cost him about Sh200, 000 to register his company, apply for a business permit, and acquire an office space as well as necessary equipment. He also had to register for VAT which is a statutory requirement for any business offering a service.

In order to boost his credibility in the market, he a enrolled the Kenya Institute of Management .

It was not easy when he started. With little experience in the self-employment sector, bidding for large projects soon proved to be a tall order. However, Gathecah never gave up and used the small sub-contracts handed to him by more experienced consultants to flex his entrepreneurial muscles.

 “I was missing out due to a lack of experience so I had to price less than average rates to secure jobs. At times I had to offer some services for free to get initial references,” said Mr. Gathecah.

Consultants charge based on the time spent on an assignment. So while seasoned consultants charged an upwards of Sh150, 000 per day for strategic planning projects that could go up to a month, he charged Sh60, 000 per day. For shorter assignments, he charged Sh25, 000 per hour, to be split among him and two other business partners.

He secured his first big break in January 2020. Just as he was settling into a winning streak, Covid 19 struck in April bursting his bubble in its wake.

 “During the dry spell between May, June and July, I started to ask myself, did I quit too early and should I have waited at least two more years before quitting because I still had a mortgage to pay?” said Mr Gathecah.

: Although the tough times tested his faith a big deal, quitting was not an option. He had developed passion for entrepreneurship and even mentored several SMEs. After preaching water to fellow entrepreneurs, he wasn’t about to start drinking wine.

 “The character of an SME must be defined by their commitment to make the business succeed and that cannot be replaced. Businesses affected by the pandemic should focus on how to stay in business, whether that means cutting costs or diversifying instead of closing down all together,” said Mr. Gathecah.

Thankfully, his determination to stick with the business when it was hardest hit seem to be paying off. Mr Gathecah notes that 2021 has come with lots of exciting opportunities. He has gotten a chance to interact with more than 20 microfinance institutions and hundreds of SMEs in his consultancy. He has also mentored 10 businesses which operate under the Kenya Climate Innovation Center (KCIC), enabling them to commercialise their ideas and receive funds of up to Sh1.5 million each.

Access to finance is a major stumbling block for SMEs. He is urging financiers to develop products that are flexible, that match with the cash flows of SMEs, and that are focused on what a particular business is looking for, because SMEs have unique needs.

 “Most loan requirements are set in stone and demand a lot of documents which most SMEs do not have. Payments are tied to monthly requirements. And since clients who purchase from the supplier pay on invoice after 90 days, businesses which take loans to stock up can’t manage to pay within the stipulated timeline. This is the same case in agribusiness where yields and returns do not come on a monthly basis,” said Mr. Gathecah.

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