Ramadhan Obiero: The bottom line is, I did not do my homework

There is an old adage, that those who eventually succeed must first fail countless times but have the courage and conviction to keep going. This is exactly what Ramadhan Obiero, 36, has experienced in his bid to get his affordable breakfast business, Beststart, off the ground for more than five years.

Founded in 2013, Beststart pulled in a turnover of approximately Sh150,000 before grinding to a halt in 2015, when Ramadhan was forced to close shop

Despite this setback, Ramadhan approached KCB Lion’s Den seeking a Sh500,000 investment for a stake of 10 per cent in his company. His hope was to reignite Beststart. He spoke to Hustle about the dream of being a flagship company offering a good, hygienic and affordable breakfast.

What is Beststart?

Beststart is a mobile kitchen run from a food cart that serves breakfast options to people predominantly in the lower income bracket. I thought of it when I kept seeing these vendors hawking tea, eggs or chapati to construction workers and bodaboda riders. I watched one day as five people used the same cup and just thought, why can’t these people have the same privileges that their up-market counterparts enjoy? For instance, disposable cups or well-packaged meals? I wanted to change that, so I came up with the concept of Bestart.

What was your start-up capital?

My start-up was Sh500,000 that I received in 2013 after winning a pitch with a company called Growth Africa, whose initiative was to help young entrepreneurs start and sustain their businesses.

What did you use the capital for?

We bought a food cart, rented a kitchen, branded the vendors and used the rest as working capital. Within the first three months, we were turning over Sh150,000 per month.

That sounds like a substantial amount to keep the business running. What went wrong?

I didn’t stick to my plan. My initial idea was to serve breakfast. But we realised after breakfast we had chapatis and mandazis left over. We decided to serve lunch as well to minimise on the waste. It was a great idea but it was too soon in the business to branch out to an additional concept. We overstretched ourselves; lunch didn’t bring in as much as we had anticipated predominantly because we were operating in a saturated market. Everyone offers lunch.

How did you navigate the challenge?

We had used up all our initial capital and the turnover was not keeping us afloat. I shut down the kitchen for two months and restructured, then put in another Sh100,000 of investment. The business picked up again. In 2015, I was nominated by an organisation called Junior Achievement to represent them at an entrepreneurial conference in Gabon dubbed, Africa Expo, where start-up businesses run by young people around Africa competed for a prize. Beststart was voted the company of the year and was granted Sh250,000.

You pumped in about Sh850,000 into your company but it eventually shut down. In retrospect, what would you have done different?

Many things. But I think one of my greatest failings was inconsistency. Maybe I was too concerned about getting everything perfect so every time we hit a serious snag, I would close shop to restructure.

We were making money, I really should have kept building the brand even as we changed tactics. We would have stabilised eventually.

Business in Kenya is tough because people easily mimic what you’re doing. After I came back from Gabon, we discovered that while we were away so many other outfits had come up, doing the exact same thing we were doing. They didn’t have our branding or our structure, but they were using our concept, which was basically serving hygienic, convenient, affordable breakfast. We lost customers and traction, which we never got back.

Do you think you gave up too easily?

In retrospect, maybe. But I picked up the vision again when I applied to be considered for the Lion’s Den.

It was quite an achievement to get picked out of hundreds of applicants to pitch to the Lions. What made your proposal stand out?

Beststart is a brilliant idea, which even now no one is really doing. Back in 2014, we were selling over 300 meals a day, just in Baba Ndogo where the company was based. At the time we had one cart. My vision when I was pitching to the Lions was to get enough investment for three carts. That would make 900 meals a day, easy. At Sh70 a meal, that’s Sh63,000 daily turnover, Sh315,000 a week and Sh1,260,000 a month. That’s the potential of this business.

Why do you think you didn’t succeed in your pitch?

I showed up with the figures from 2015, when what I should have done is to couple them with current projections based on the current market. The bottom line is, I didn’t do my homework.

Where does that leave Bestart today?

I am sourcing for partners. I’m interested in both investment partners and those who can help me with the business end of the company. One of the key things I’m learning is to know my strengths and let them work for me. I am great at marketing, tweaking ideas to suit the market because I understand people. But I’m accepting that I also need a business mind in my camp to help me consistently turn those ideas and my networks into money.

Do you think the Lions made a mistake by not investing in you?

No. They saw loopholes in my pitch and that is what I’m correcting. I’ve also learned that investment is all about timing. In 2014, I received an investment offer for Sh20 million for Beststart but I declined it because I felt the investors wanted too much stake in the company. Maybe I could add that to my list of mistakes.