Thursday, March 28, 2024

Clara Mutongi: How taking a loan messed up my business

Clara Mutongi is the founder and CEO of Dream-Reality Works, an events management company based in Nairobi.

Biggest money mistake: At some point in the development of my business, I was lured to take a loan. This proved to be a costly mistake due to the high interest rates that were charged on the loan. The loan not only restricted business growth, but also made it nearly impossible for me to save money.

Avoid loans at all costs if your cash flow is not consistent. Always bear in mind that paying interest for a long period of time slows down your growth. If you must take a loan, at least wait until your venture is financially stable to sustain it. Target loans that will earn more money for you. Avoid bad loans.

Biggest business loss: I learned the hard way that in my line of business, I should never give a flat rate to clients. I once gave out a flat rate, only for the client to make demands for additional items that were not factored in the rate I charged them.

I had to outsource the items and meet the bills on my own since we had already signed the business contract. I ended up making zero profit. If you are in the events business, always give your clients an itemized estimate. Provide the client with the option of striking out certain items if they wish to slash down their own costs.

My success recipe: Honesty in business is getting scarce these days. Honesty is a real asset that will not only bring you customers, but referrals, business networks and better turnovers. Always be honest with your clients. Remember to be patient as well. Money will not fall from heaven like manna once you open your business doors. There will be tough, bad times.

When I was getting started, I ensured that I identified an area that I would be truly interested in for a long time, pursued it, invested in it, and built it into the events business it is today. Don’t waste your energy on ventures that you’re not passionate about or businesses you don’t look forward to attending to the next day. I have also learned that it is not very rewarding to be a jack of all trades. Find your specialty and turn it into a market solution.

Saving method: I save 10 per cent of the proceeds I get from every event I host. I have adapted a modest lifestyle, which also makes saving and budgeting money in my household easy and efficient.

Biggest milestone: Starting my own business and sustaining it until it broke even and became self-reliant is my biggest milestone so far. That I was physically challenged, the journey was rougher for me than it possibly would have been. I chose not to let my disability hold me back. Life is what you choose. If you choose perseverance and positivity, and focus on your goals, nothing will be the limit.

If I could turn back the clock: There is nothing I would do differently. I believe that my struggles, personal and business, have all been worth it in molding me into the woman entrepreneur I am today.

How to venture into business with no money

My parting shot: Through my personal and business life, I have learned that the cliché ‘Rome was not built in a day’ is not an empty line. There is real financial power for those who start small and scale up their ventures reasonably. Do not expect instant results.

Personally, I have risen above my physical disability. I don’t let it define my destiny, what I should do or what I shouldn’t do. Learn to overcome your limitations and see beyond the horizon.

This profile feature on Clara Mutongi was first published in the Saturday Magazine. The Saturday Magazine is a publication of the Nation Media Group.

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