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My ‘aha’ moment came while stranded abroad

ENTERPRISE
By Paul Kariuki | November 11th 2020

Obed Bundi (pictured) is the guy behind the YouTube travel channel ‘Obed in the Wild’. One day, in his adventures, Obed ended up in Addis Ababa in Ethiopia. He had had a pretty long day and needed a place to sleep before he could start on what had taken him to the East African capital. But he couldn’t find a decent hotel.

In the sea of strangers, he would find a friendly face, one that led him to a furnished apartment. And while it was more than he had hoped to spend on accommodation, he loved his stay in the little sanctuary that reminded him so much of home. So much so that it sparked a business idea — to create the same experience for weary travelers at home. And thus the home-stay arm of Obed in the Wild was born. A journey not without its share of misadventures.  

In a nutshell, what do you do?

I rent and lease complete or parts of apartment blocks, furnish and rent them to clients looking for furnished units. I’m also a wanderlust traveler and have a YouTube channel which showcases places I’ve been to.

I had gone to Ethiopia by road in 2018 to tour and explore the wild world and ended up in Addis Ababa. I checked with different hotels for a place to stay but was shocked when I could not find a good one to put up for the duration of my stay. Being the seat of the African Union, I expected the Ethiopian capital to have great facilities, given that it is also a fast growing economy.

I ended up staying in a furnished apartment and the experience of my stay there was a game changer. I decided to replicate this back at home and I’ve never looked back since.

An idea is only a good one if it makes sense for the market. Why did you think this was a good one?

For one, it is cheaper to stay in a furnished apartment if travelling alone or as a group. So they are a good bet for budget travelers.

Second, they are good places to network with individuals you meet in the shared apartments.

Thirdly, if you are travelling out of town or the country, the owner of the apartment becomes your contact person, one who can give you details you wouldn’t otherwise know about the location. I also realised that many people already held the notion that hotels are expensive. It was fertile land for me.

What was your initial capital?

Sh1.6 million. This was the cost of renting and furnishing an apartment block. The startup capital came from my savings and a bank loan.  

How many furnished apartments do you have?

I run eight units. Six in Nakuru, and two in Syokimau in Machakos County. I do not own them but I lease or rent the floor spaces, furnish them then rent them out. We have both long and short stays. Long stays are up to a month and short stays are for a night. Prices are flexible ranging from Sh3,000 per night.

Why those locations?

I work in Nakuru. I have a fulltime job. As for the Syokimau location, that made sense because I’m targeting travelers and this is informed by the fact it is close to the airport and the Standard Gauge Railway.

It is a perfect place for staycations and for someone in Nairobi for a seminar or work. If you land in JKIA late at night, you don’t have to worry because proximity to such apartments can provide you a home away from home.

Furnishing must be expensive. How do you ensure good standards without breaking the bank?

All my furniture is locally made; the price is lower and the quality is good. Sourcing locally ensures I less compared to buying readymade furniture. I don’t understand why people would import what can be procured locally.

Breaking into the market is often the hardest part. How did you get your first client?

Before moving to using social media apps like Facebook and Airbnb, I used referrals from friends to market the spaces. Over time, we have created a client base and we depend on referrals. This is because they have experienced what we offer and have become our great marketers. We also advertise online.

Any blunders that you regret?

There was a time I allowed a client a two-months stay in an apartment and we did not have a written contract. That client vanished in thin air. I had not captured any of his contact details and that was not a wise business decision.

Another was when I furnished another apartment only for the management to tell me they don’t like the idea of furnished apartments in their court. This was a big financial blow but at the end of the day, it was a learning curve.  

Is this all you do?

No. I’m also a business consultant with a company known as Empathy Solutions where I assist organisations to set up systems, develop marketing plans, team building and SOPs (standard operating procedure). I also train on leadership and personal experience.

What are some of ups and downs of this area of business?

Getting clients at a short notice when another client moves out is not easy. Also, there are those clients who will vandalise furniture, equipment or pilfer things when checking out. Also, the idea of staying in furnished apartments is a new trend that has not been embraced by many.

What advice would you give anyone wishing to invest in this sector?

Your heart has to be in hosting and you need to develop good interpersonal skills when it comes to clients. Remember you’re doing a sales pitch and you have to be convincing. Your clients will judge your place through their experience and can refer others to you.

How many employees do you have?

Three, but they work when we have guests in apartments.

Has Covid-19 pandemic impacted your business?

Yes. Things were bad when the country went in a lockdown in March. The business relies fully on people moving and travelling and the pandemic brought things to a standstill.

However, on the flipside, we are seeing people embracing furnished apartments because there is less congestion and they are a safe haven. The coronavirus has come like a blessing in disguise.

What business lessons have you learned so far?

Every business is a process and you don’t have to start one and expect returns at a short time. You really need to be patient.

Before you undertake any business, know what your competitive advantage is and the problem you are solving because at the end of the day, we are here to solve our clients’ problems.

How much can you make in a month?

On a good month, when the business is good, the income can be anything from Sh250,000 with profits dipping to as low as Sh100,000 on slow months.

Do you reinvest back in business or invest in other areas?

I plough back profits into business. That is how I have been able to have several apartments.

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