Entrepreneur shares the good, bad and ugly of running a business in Kenya
All work and no play makes John a very dull boy. No one knows this better than Munyaka Njiru who got bored of routine while in university. He and his friends decided to start an outdoors team building experiential company. It has been seven years in business and many lessons learnt.
Who is Black Hammock?
Black Hammock is Munyaka, Wambui and Timothy. Those are the faces behind the Brand and Name of the Company. We are an outdoor based team building, leadership training and experiential training consultant company that works closely to the corporate environment in Kenya and regionally. Black Hammock also handles corporate extreme outdoor expeditions for corporates and group with activities such as Mountain Climbing, Camping and incentive-based team building activities for companies such as white water rafting, camping and overlanding expeditions for companies that would like to make a change from the usual field-based team building exercises. Also Black Hammock organizes across the continent expeditions for research centers for foreign outreach programs and offers excursion based logistics across five countries in the region.
What inspired you to start the business?
Back in campus, life got boring for me and with my comrades Rota and Wachira Mwangi. We decided to start an outdoor scouts club that would traverse the country in between our studies to seek adventure. When we completed college, we started Black Hammock to turn the passion into business. The hardest part was graduating from student retreats to corporate retreats. Similar as they are, the demands of the corporate client needed quite a lot of shaping up. In 2012, after winning the Young Entrepreneur Award, my two colleagues decided to move into other corporate fields that were seeking the same competent direction. I soldiered on into the untapped market with Black Hammock Outdoors Limited and brought the fun to where we are now.
How would you describe the business environment in Kenya?
The business environment in Kenya is very accommodating but on one condition – that you know what your niche market is and how you intend to meet its need. At the beginning, we strategically worked and researched on the areas those companies were struggling in and what they were willing to pay for a proper team building package. A multi-million company could not be invoiced like a six-year-old company. Normally based on the level of personnel and what vision and mission each company had in mind.
Where and how do you get your clients?
The best clients are through referrals – word of mouth. In 2015, we launched a website that explains and sells what Black Hammock does. We have since not spent a lot on marketing because our service sells and speaks for itself. Social media is also a very adept marketing tool.
How did you go about registering your business?
We hired a lawyer who had done this for a couple of companies. He came in highly recommended. The Directors came up with three adaptable names and the lawyer did the rest. Business registration in Kenya is easier now with Huduma centers but if you do not like the hustle just get someone to do it for you.
What challenges did you face?
The cost of registration. Stamp Duty. The higher the nominal capital the higher the stamp duty and this can be restraining for a new enterprise. The trick is to quote a low nominal capital if this challenges you. Getting acceptable Names. You will be very creative with a name only to find that it is taken. I would lay blame to the registry because if someone registered a name in 1970 and never used it, it still shows as taken. The registry ought to be cleaned up at some point.
How many licenses or permits do you need to run your business?
- Certificate of Incorporation
- NITA certification
- PIN Certificate
- KRA Certificate of Compliance
- Tourism Regulatory Authority Certificate
- County Government Business licenses if you have a premises
What challenges did you face in the first year of your business?
- Securing corporate clients. Most companies would like to be associated or to do business with already existing companies. Good referrals are essential at the beginning.
- Banking Support. Kenyan banks will only lend or offer LPO discounting to companies or individuals with security/collateral.
- Enough resources to put aside for advertising and R&D.
- Determining how much and what discount to offer to each individual client. Price is a tricky factor in Kenya. The same service costs different to different people. It’s strange.
How much capital did you start with?
I would almost say Zero but for the initial process we spent close to KSh 50,000 to get the papers and basic stationery. It is possible to start a consulting business with almost zero capital.
Have you borrowed money for your business? If yes, what were the conditions for getting money?
- Security/Collateral equal or higher than the amount of money you are requesting for.
- Guarantors in the same business.
- Switching bank accounts. The bank that offers the loan wishes that you only have your workflow income through a bank account at their respective bank.
After how long did you break even?
What technical support/expertise did you need for your business and how did you get it?
Leadership training requires partnering with other accomplished trainers in SA or the USA who have already established tests and training to enable Black Hammock offer international qualified team building and leadership training packages.
Accommodating national laws in use of public tourist attractions such as lowered park rates.
Reducing of the costs of doing business in other East African countries. While countries like Tanzania support their own companies, in Kenya the cost of doing business in the same environment is the same for our Rwandese, Uganda, Burundian or Tanzanian counterpart. Sometimes even harsher.
Have you ever encountered corruption? If yes, how do you deal with it?
If the only way to get a contract or get the job is through oiling another person’s hand, let it go. Black Hammock has zero tolerance to corruption in all its forms. We have forfeited several contracts/jobs based on the perceived corruption this would cost the company. It would probably be the reason we have serviced less than five government contracts in our seven years in business.
What is the worst mistake you have made as an entrepreneur?
Taking business from politicians. The political class in Kenya are the worst and late payers. Using their political office and status to withhold payment. Unless dealing with a legally registered company (whose one or two directors are politicians and are bound by the business standards and norms of the company) personally vested politician clients are the worst to handle business for. Lesson learned the hard way. They don’t pay and will make you beg for money you rightfully earned.
What do you know now that you wish you knew when you were starting out?
That the hours are long and the sacrifices are larger. Most self-employed persons rise up earlier than employed people and are the last to go to bed at night. There is always something to wind up or clear before any type of rest. All else you will fail miserably. Identifying the difference between the company and the individual. There is a thin line that is easily crossed to the detriment of the entrepreneur.
What advice would you give someone who wants to start a similar business like yours?
Research. Do more research. The end of your research should be to come up with something different. Kenya is a copy paste economy, and if you want an edge you need to think hard to create something different or unique. Afterwards, if you don’t have the love for people and the social atmosphere, if you don’t like to make tough decisions, face different people every day and want to be a problem solver, be empathetic and be willing to learn every other day, then a similar business will not suit you.
Five years from now, where do you see Black Hammock?
With our foray into the Western African and East African market segment, Black Hammock will be a market leader in team building and leadership training. Training the Trainers of Trainers and having developed a syllabus to be used by other trainers with earnings from consultation and content development. On boarding a new investor is also a priority now. The next level needs good capital to leverage on.