Friday, March 29, 2024

How I handle my money to grow wealth

Wambui Muriithi is the Managing Partner at Leed Business Corporation Ltd, an investment and business advisory firm that connects investors, international private equity and venture capital firms to high-growth African businesses with proven concepts and global prospects.

Biggest money mistake: The worst mistake I’ve made was in 2008. I bought a company for Sh. 500,000. It allegedly owned a jobs’ website and was allegedly making good revenues. Once the transaction was over, I discovered that there was no website. It was just a group on Google with a mailing list. The seller soon transferred the mailing list to himself and renamed the group. Being an accomplished blogger, he took all the traffic from me.  There were two mistakes here: I didn’t do due diligence, and I bought into a business I knew nothing about. I was neither a techie nor a blogger!

Biggest career loss: I invest eight years in growing a brand of executive men’ spas and barbershops based on trust rather than paper work. In the end, I lost it all. I learned that to avoid repeating similar mistakes, everything you do in business should be legally put on paper. Always involve a good business lawyer in your business dealings.

Biggest milestone: I invested in an executive car leasing business sometime back that proved to be very worthy. By then, I’d become wise enough not invest with my heart but according to what the business numbers say. Always put the bottom line ahead of emotions. How much are you investing, what are the projected sales and income, what’s the projected profit, how long will it take to break even? Business is a game of numbers!

Saving method: I don’t save money. Instead I invest it! Previously, though, I used the table banking and chama saving methods. Both are very effective for starters.

If I were to go back in time: I would involve a lawyer in every step of my business dealings. I’d also spend more time doing due diligence before buying or investing in any business. This would entail learning as much as possible about the industry I’m putting my money in, and, evaluating the enterprise’s bottom line over and over. At work, I’d go slow on emotional attachment or being overly motherly to employees.

Building wealth: The secret is delayed gratification. There are a lot of pleasures you must forfeit in order to build wealth. You must also be prepared on how you’ll accumulate both money and wealth, and how you’ll invest these two once you’ve accumulated them.

Side hustles: There are women who start side hustles that are not entrepreneurial in nature, but rather, ways to add to their income streams. For me, as long as it’s not entrepreneurial, it’s not worth it. Always ask yourself: If you lost your job today, will the side hustle grow and be able to financially support you? There are also women who start entrepreneurial ventures and plan on their exit from employment. This is the most brilliant way to go!

Best way to get rich: When you weigh entrepreneurship versus employment, the former will always win. You see, in employment, just like Kenyan banks’ interest rates, there’s a cap on how much you can be paid depending on your profession, industry and position. But in entrepreneurship, there is no limit to how your business can grow as long as the right business growth fundamentals are in place.

Making it in business: As women, we are naturally nurturers, and sometimes in dealing with employees, we are overwhelmed by our nurturing instincts. However, there are no two ways about it. You must embody ruthlessness in pursuit of excellence and in your drive towards achieving your business goals. This means that you must abandon the notion that anybody owes you something.

Biggest mistake startups looking for funding make: Expecting free money ranks highest. I have encountered start-ups that ask you to get them grants instead of debt or equity. Others want free administration and advisory services. Budding entrepreneurs need to know that money begets money. Nothing is free.

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