Failure to join university did not dampen Mugera's entrepreneurship spirit

It’s 2014, and one of Rwanda’s would-be first year university student is facing a dilemma of his life; to join campus and drop out almost immediately or take a huge gamble and use his half tuition fees to start a small business.
Mugera at his workshop in Kimironko. The budding entrepreneur was forced to venture into metal fabrication after failing to raise full tuition fees for university. (Lydia Atieno.)
Mugera at his workshop in Kimironko. The budding entrepreneur was forced to venture into metal fabrication after failing to raise full tuition fees for university. (Lydia Atieno.)

It’s 2014, and one of Rwanda’s would-be first year university student is facing a dilemma of his life; to join campus and drop out almost immediately or take a huge gamble and use his half tuition fees to start a small business.

Dalius Mugera chose the latter. He is now an artisan, making windows and doors, as well as other fabrication products at a makeshift workshop in Kimironko, Gasabo District. 

Born into a humble and polygamous family, Mugera says his chances of even completing one year of his nursing course at university were slim going by his high school experience. He says during his A’level he would be sent home for school fees balance regularly, a situation “I did not want repeated”. Therefore, it was almost natural that I used the money as startup capital for business.

Though there is a government loan scheme for university students, there are still many that don’t make the cut across the country and going through the same predicament. What should youth facing such a situation do?

Expert advice

Experts call for caution, arguing that using tuition fees to start a business “is more risky” as the business environment is never predictable and has far many unforeseeable risk factors.

Edigold Monday, the Crane Bank Rwanda managing director, says a business that starts without proper planning is headed for failure.

Monday says since people, like Mugera, may not have the necessary knowledge to run an enterprise and have little money, the possibility of it collapsing is high.

“One must first understand basics of running a business, like bookkeeping and simple accounts, because these are important to ensure the survival and growth of the enterprise. It’s not about having a few thousand francs, it requires much more to run a business successfully,” she explains.

Jean Marie Rugambwa, a financial analyst in Kigali, says businesses face many risks, which one needs to identify and draft a plan to guard against them. “So you need to understand how they are likely to occur, and quantifying the impact they would have on the business. This will enable you to create a risk scorecard based on the estimates and its likelihood to happen so that you put the necessary measures against the risk,” he says.

Winning tips

Rugambwa explains that in today’s world, the best way to invest money depends on the risk appetite a potential investor is willing to undertake.

“For instance, there are investors who like to take risks that ensure higher return, while others will generally prefer taking less risk, whose returns are usually low,” he says.

He says before one starts a business, it is important to understand trends, to know exactly what kind of business model to adopt, the risks associated with that business, the cash flow expected, and when to start making profit.
“If one doesn’t have enough information on a particular business they are interested in, they need to seek guidance from experts,” he says.

“For startups, it is advisable that they first try out small businesses that need low capital. This helps build your expertise as you gradually expand the business,” says Monday.

Patrick Shalita, the manager at Meeji Company, says you must study the consumption patterns of people in the locality so that you meet their needs and create a niche.

How Mugera managed

Mugera says though he lacked enough knowledge in business and financial management, he tried to learn on the job. “ I dedicated all my time on the fabrication project and worked tirelessly to ensure that it grows and becomes sustainable,” he says.

He says he capitalised on the weakness of competitors, to deliver quality service. He adds that whenever he made a mistake, he made sure that he learnt how it is done to avoid a recurrence.

“I also sought advice from people who had been in welding and fabrication business earlier, which partly contributed to my success today,” he says. He however advises students facing similar challenge like his to first weigh their options, saying one is not assured of success in business.

“So, one can pay what they have and look for a job as using tuition fees to start a business can backfire,” says Mugera.

 

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