Take Thomas Machasio, who was 55 years old when he decided two years ago to step out of his top corporate job to start his own business for the first time.
It was done neither on impulse nor in desperation, but rather as the result of a careful consideration of how he wanted to build his legacy in the second half of his career.
Thomas had been working for no less than 22 years for SKF, a multinational manufacturer of bearings and gearboxes. In his last years at the company, he was Managing Director & Regional Manager for East Africa, covering his native Kenya and nine other countries, including Angola, Djibouti, Eritrea, Ethiopia, Somalia, both Sudans, Tanzania and Uganda.
During the course of his career, which started with his studies as a mechanical engineer at the Kenya Polytechnic, the idea of running his own business one day developed slowly. With his children finishing school and retirement approaching, Thomas started seriously thinking about his future. “I had two choices. The one was to sit in the company until I reached the age of 60, retire and go to the farm, put my feet up and have nothing else to do than look at the sky. Or, to look at my future and think: 'How can I remain active and create something lasting?' I had the business idea, the experience and the network,” he says.
His idea was to start a business that would, like SKF, sell bearings and offer services to the industrial and automotive industries in Kenya and the broader East Africa, but with a focus on imparting knowledge to the client on how to extend bearings life of their machinery and thereby reducing their TCO (Total Cost of Ownership).
Thomas managed to convince SKF’s head office in Europe that with this approach, and by running his own business, he would be able to sell more of their products in the region, thereby increasing overall brand market share. The company supported his idea, and after a succession period of a year, Deltatec Engineering Solutions was born in 2016.
Based in Nairobi, Thomas had planned his launch carefully by recruiting three knowledgeable employees. He used US$200 000 of his own savings to get the company started. Apart from setting up an office in Nairobi, most of the start-up capital went towards buying initial stock.
The start-up period was exciting, says Thomas, but also scary. Sales came in slower than expected at first, and then the fledgling business suddenly had the opposite problem - rapid growth.
Thomas needed to get expansion capital fast, but the major financial institutions banks in Kenya do not easily lend to businesses that do not have at least three years of audited statements and proven profitability.
Fortunately, one of the bankers referred him to Business Partners International Kenya, which finances businesses based on the potential of the idea and the strength of the character of the entrepreneur.
“BPI was a breath of fresh air. They look at background and experience, and are willing to support an entrepreneurial spirit,” says Thomas.
BPI financed Deltatec to the tune of US$100 000 in the form of a five-year loan.
Even though Deltatec operates in a highly competitive and price-sensitive market, Thomas is certain that the young company will achieve at least a 50% growth this year, and that he will have to employ new staff members soon.
He is sticking closely to his strategy of helping his clients with product knowledge and expertise and improving their overall profitability. For the immediate future, he is looking to recruit agents in the outlying areas in order to strengthen Deltatec’s reach.
For Thomas, the biggest difference between being the regional head of a multinational and running your own business is the stress levels.
“As an employee you don’t have to worry about the financial aspects because everything is well resourced with a mother company that can support you, so you have that comfort. When you work for yourself, however, you have to think about all those things: Where are you going to find the money? When are you going to bring in additional resources? Which customers must you prioritise? What strategy are you going to use? So it is a bit more challenging.
“But,” says Thomas, “the satisfaction is so much more once you see success coming your way.”