Young Kenyan entrepreneur finds success in sunflower oil business
It is 2.30 pm, the sun is blazing hot in Makutano village, Makueni District – about 80 miles from Nairobi. Kiilu has his white shirt and hands greased in oil, beads of sweat cover his face as he inspects the mammoth oil storage tank.
After what seems like eternity, he retreats to the front office where he is setting a mini shop for retailing his pure oil named Hafya. But what would make a young man, born and raised in the city, to retreat into the village? “I loved discussing business plans with my friends and family [ and it was during such a moment] when the idea of sunflower processing came to mind,” Kiilu says when he settles for the interview. His friends were against the idea partly because it was not “youthful” or attractive. “But my old man played a very big role in this. He encouraged me,” notes Kiilu.
He explains, “I just decided to shut out the negative voices and go for what my heart craved for. Life without risks has no romance.” He was in his third year at the Nairobi University in 2007 studying electrical and information engineering – that he started the project with the support of his father.
But why would Kiilu opt for the village? “It was about cutting costs, number one. It would have been very costly to set up in Nairobi in terms of renting premises and other factors. But again I also wanted to offer some employment to my people in the village.”
There were obstacles to grapple with. Despite not being far from the nearest electricity source, KPLC took 10 months after his application to connect power to his business location.
“Getting sunflower seeds for pressing was a hustle, especially after the post-election violence, just soon after the work had begun. We had difficulty getting seeds from Western Kenya,” Kiilu says. Western Kenya was the worst hit during the post-election violence of 2007 ,so he decided to source seeds from Mombasa and Oloi Toktok.
An engineer himself, Kiilu has been able to cut costs by fixing electrical and other technical aspects of the plant himself. He diagnoses mechanical problems on site and repairs them as they arise.
Extracting oil from sunflower seeds is a technical and tedious process. Referred to as oil pressing, the extraction process begins with the mechanical expulsion of oil from the seeds. This initial process gives out an end product of unrefined oil known as ‘cake’. The ‘cake’ is transferred to a settling tank where decantation – heating of the oil to do away with particles – is done before the partially refined oil is relocated to a storage tank. Filtering is then done to remove pulpy invisible dust, in a procedure referred to us ‘rooting’. Lastly, the oil is refined before it’s packed in varying quantities.
To do this effectively, Kiilu says that he had to start small and use his profits to make improvements and get other necessary machines. For one to successfully set up a pressing firm, an oil press, vacuum cleaners, refiner, settling tanks, food storage tanks, bottling line and shrink-wrapping machine are mandatory.
Kiilu currently packs 500ml retailing for Kshs 105 ($1.4), 1 litre at Kshs 200 ($2.6), 5 litres at Kshs 850($11.3), and 20 litres at Kshs 3,400 ($43.3). The waste product is a protein-rich substance sold to animal feed firms.
Still youthful, Kiilu is upbeat about his future. Striking as a jack of all trades and a master of all, young Kiilu is experimenting with flour milling through his mother company, Kilimanjaro Light Industries.
The road to success, he notes, has been bumpy and even now, Kiilu still struggles to push the product to the end market. Sunflower seed prices have since gone up, and the cost of production continues to skyrocket.
But again, as he says, failure to take risks is failure to enjoy the romance of life!
STARTING A BUSINESS: THE IDEA PHASE
You know you want to start a business, but what do you do next? Here's how to find the perfect idea for your business.
Many people believe starting a business is a mysterious process. They know they want to start a business, but they don't know the first steps to take. In this chapter, you're going to find out how to get an idea for a business--how you figure out exactly what it is you want to do and then how to take action on it.
But before we get started, let's clear up one point: People always wonder if this is a good time to start their business idea. The fact is, there's really never a bad time to launch a business. It's obvious why it's smart to launch in strong economic times. People have money and are looking for ways to spend it. But launching in tough or uncertain economic times can be just as smart. If you do your homework, presumably there's a need for the business you're starting. Because many people are reluctant to launch in tough times, your new business has a better chance of getting noticed. And, depending on your idea, in a down economy there is often equipment (or even entire businesses!) for sale at bargain prices.
Everyone has his or her own roadblock, something that prevents them from taking that crucial first step. Most people are afraid to start; they may fear the unknown or failure, or even success. Others find starting something overwhelming in the mistaken belief they have to start from scratch. They think they have to come up with something that no one has ever done before--a new invention, a unique service. In other words, they think they have to reinvent the wheel.
But unless you're a technological genius--another Bill Gates or Steve Jobs--trying to reinvent the wheel is a big waste of time. For most people starting a business, the issue should not be coming up with something so unique that no one has ever heard of it but instead answering the questions: "How can I improve on this?" or "Can I do this better or differently from the other guy doing it over there?" Or simply, "Is there market share not being served that makes room for another business in this category?"
Get the Juices Flowing
How do you start the idea process? First, take out a sheet of paper and across the top write "Things About Me." List five to seven things about yourself--things you like to do or that you're really good at, personal things (we'll get to your work life in a minute). Your list might include: "I'm really good with people, I love kids, I love to read, I love computers, I love numbers, I'm good at coming up with marketing concepts, I'm a problem solver." Just write down whatever comes to your mind; it doesn't need to make sense. Once you have your list, number the items down one side of the paper.
On the other side of the paper, list things that you don't think you're good at or you don't like to do. Maybe you're really good at marketing concepts, but you don't like to meet people or you're really not that fond of kids or you don't like to do public speaking or you don't want to travel. Don't overthink it; just write down your thoughts. When you're finished, ask yourself: "If there were three to five products or services that would make my personal life better, what would they be?" This is your personal life as a man, woman, father, husband, mother, wife, parent, grandparent--whatever your situation may be. Determine what products or services would make your life easier or happier, make you more productive or efficient, or simply give you more time.
Next, ask yourself the same question about your business life. Examine what you like and dislike about your work life as well as what traits people like and dislike about you. Finally, ask yourself why you're seeking to start a business in the first place. Then, when you're done, look for a pattern to emerge (i.e., whether there's a need for a business doing one of the things you like or are good at).
Here's a business startup story that's a great example of seeing a need and filling it. Entrepreneur magazine is located in Irvine, California, a planned community. Many years ago, there weren't many fast-food restaurants in the business area. Most were across town, where the neighborhoods were. Two young men in Irvine found this lunch situation very frustrating. There weren't many affordable choices. Sure, there were some food courts located in strip centers, but the parking lots were really small and the wait was horrendous.
One day, as they were lamenting their lunch problem, one of them said, "Wouldn't it be great if we could get some good food delivered?" The proverbial light bulb went on! Then they did what many people don't do--they did something about their idea. Coincidentally, they purchased one of Entrepreneur's business startup guides and started a restaurant delivery business.
To date, their business has served more than 15 million people! It's neither a complicated business nor an original one. Their competition has gotten stiffer, and yet they're doing phenomenally well. And it all began because they listened to their own frustrations and decided to do something about them. Little did they know that research cites the shrinking lunch hour as one of the biggest complaints by American workers. Some only get 30 minutes, making it nearly impossible to get out, get lunch and get back on time. So while these young entrepreneurs initially thought they were responding to a personal need in their local area, they actually struck a universal chord.
That is one way to get ideas--listening to your own (or your co-workers', family's or neighbors') frustrations. The opportunities are all there; you just need to search them out. If your brain is always set in idea mode, then many ideas may come from just looking around or reading. For instance, if you had read an article about the shrinking lunch hour, and if you were thinking entrepreneurially, you would say "Wow, maybe there's an opportunity there for me to do something. I should start researching it."
Inspiration can be anywhere. Here's another classic startup story: Ever get charged a fee for returning a video late? Bet you didn't do anything about it. Well, when Reed Hastings got a whopping $40 late charge, instead of getting mad, he got inspired. Hastings wondered "How come movie rentals don't work like a health club, where, whether you use it a lot or a little, you get charged the same?" From this thought, Netflix.com, an online DVD rental service, was born. From its start in 1999, Netflix has grown into a big business with revenues topping $1.3 billion.
Getting an idea can be as simple as keeping your eyes peeled for the latest hot businesses; they crop up all the time. Many local entrepreneurs made tons of money bringing the Starbucks coffeehouse concept to their hometowns and then expanding from there. Take Minneapolis-based Caribou Coffee. The founders had what they describe as an "aha moment" in 1990, and two years later launched what is now the nation's second-largest company-owned gourmet coffeehouse chain. Other coffee entrepreneurs have chosen to stay local.
And don't overlook the tried and true. Hot businesses often go through cycles. Take gardening. For the last few years gardening products and supplies have been all the rage, but you wouldn't consider gardening a 21st century business.
In other words, you can take any idea and customize it to the times and your community. Add your own creativity to any concept. In fact, customizing a concept isn't a choice; it's a necessity if you want your business to be successful. You can't just take an idea, plop it down and say "OK, this is it." Outside of a McDonald's, Subway or other major franchise concept, there are very few businesses that work with a one-size-fits-all approach.
One of the best ways to determine whether your idea will succeed in your community is to talk to people you know. If it's a business idea, talk to co-workers and colleagues. Run personal ideas by your family or neighbors. Don't be afraid of people stealing your idea. It's just not likely. Just discuss the general concept; you don't need to spill all the details.
Just Do It!
Hopefully by now, the process of determining what business is right for you has at least been somewhat demystified. Understand that business startup isn't rocket science. No, it isn't easy to begin a business, but it's not as complicated or as scary as many people think, either. It's a step-by-step, common-sense procedure. So take it a step at a time. First step: Figure out what you want to do. Once you have the idea, talk to people to find out what they think. Ask "Would you buy and/or use this, and how much would you pay?"
Understand that many people around you won't encourage you (some will even discourage you) to pursue your entrepreneurial journey. Some will tell you they have your best interests at heart; they just want you to see the reality of the situation. Some will envy your courage; others will resent you for having the guts to actually do something. You can't allow these naysayers to dissuade you, to stop your journey before it even begins.
In fact, once you get an idea for a business, what's the most important trait you need as an entrepreneur? Perseverance. When you set out to launch your business, you'll be told "no" more times than you've ever been told before. You can't take it personally; you've got to get beyond the "no" and move on to the next person--because eventually, you're going to get to a "yes."
One of the most common warnings you'll hear is about the risk. Everyone will tell you it's risky to start your own business. Sure, starting a business is risky, but what in life isn't? Plus, there's a difference between foolish risks and calculated ones. If you carefully consider what you're doing, get help when you need it, and never stop asking questions, you can mitigate your risk.
You can't allow the specter of risk to stop you from going forward. Ask yourself "What am I really risking?" And assess the risk. What are you giving up? What will you lose if things don't work out? Don't risk what you can't afford. Don't risk your home, your family or your health. Ask yourself "If this doesn't work, will I be worse off than I am now?" If all you have to lose is some time, energy and money, then the risk is likely worth it.
Determining what you want to do is only the first step. You've still got a lot of homework to do, a lot of research in front of you.
HOW TO START A BUSINESS FROM SCRATCH
Are you driven to create the new business that you have been thinking about or are you just bored with your job and think that a new business will be less work?
Okay, so you have a great idea for a business start-up, but how far are you willing to go to make that idea for your new business into a money maker as opposed to a dream?
There are many questions that you have to ask yourself when you decide to Start your own business. You have to be totally committed to the idea and willing to work through any problems. If you think that your startup small business is going to be easy, think again. It is difficult, but rewarding at the same time. You have to be prepared to meet any and all challenges that lie ahead or your business will not be a success.
When you have your own small business, expect to work hard and long hours to get your business going. You will be on your own, without anyone holding your hand along the way. The profit that you expect to make may very well be in the future as most businesses do not turn a profit in the first year. But, if you are strong willed and determined to succeed in your business, you will be successful.
Running your own business start-up is not only financially rewarding, but personally gratifying. You are working for yourself, to make yourself rich instead of working to make someone else money. Those who are the most successful in the United States are those who have an entrepreneurial spirit. There is an old saying – “You never get rich working for someone else.” This is true. If you want to be truly successful, you have to have the gut to start up your own business, but be prepared to take on the challenges as well as reap the rewards.
Commitment is key to being successful in your own business. Before you start looking for business finance, be sure that you are totally committed to success. You need to be committed and passionate about your business idea and be willing to give it most of your time. You should start a business that you love, that you will want to continue to work on because you believe in the idea and the need for the business. Remember – if you are doing something that you like, you will never really work a day in your life. Those who succeed in their own business love the business that they are in and enjoy the work that it takes to build the business idea into reality.
- - Can you put in the time it will take to make your business successful?
- - Are you able to take on the challenges of a new business?
- - Do you have people who will stand behind you with your new business, such as family and friends?
- - Take this short quiz to see if you are the entrepreneurial type.
- - Get a hold of potential clients or customers and talk about the business to determine their interest.
- - Do a marketing study such as offering sample products or services on a trial basis to see the general interest in your business. .
- - Research your competitor’s businesses so that you can better understand your own business prospects – learn their strengths and weaknesses and see how you
can capitalize on strengths and eliminate the weaknesses in your own business.