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Using a shylock almost sent my construction business under

Mugambi Muraguri is the Managing Director of Fort Hall and Fort Hall Kenya Limited, a midsized construction company involved in roads, buildings, sinking boreholes and water engineering construction. Photo | Pool

What you need to know:

Mugambi Muraguri is the Managing Director of Fort Hall and Fort Hall Kenya Limited, a midsized construction company involved in roads, buildings, sinking boreholes and water engineering construction

I started the company in 2015 primarily to deal in buildings construction but have expanded to offer roads and dams construction as well as sinking of boreholes. I started with a capital of Sh1 million which was partly my savings and a commercial loan. We have 11 permanent employees and several casual employees.


It took more than four years to break even. During the company infancy, jobs were scarce since clients had reservations about a new service provider in the market. Convincing a client that your product or service is different from the existing service providers is not easy. You don’t even have a history of work previously done for reference and many clients feel they don’t want to be a guinea pig for you to experiment your expertise with.


The greatest challenge so far has been access to capital for bigger projects and late payments by clients. Construction is a capital intensive business, and the number or scope of projects the company can undertake concurrently is diminished when payments don’t come in time.


I was once a civil servant. With colleagues, we also established a business that deals in bottled drinking water, sanitary pads, and baby and adult diapers.


I once took some very enticing but expensive loans from shylocks to do a project. There was a delay in payment which was unexpected. I had it very rough with the lender as interest on loan spiraled out of control. I ended up paying almost five times the cost of the original loan. The interest on the loan ate away all the profit from the project. This taught me to trust and rely on my bank for project financing instead of shylocks. The bank maybe a little bit slow in processing the financing of the project compared to shylocks who offer you same day service but it’s worth the wait.


Your work should speak for you. I once got a client who had seen part of my work elsewhere. This client invited me to a company board for project proposal, interview and presentation. I showcased work I had done for a foreign embassy and this gave me the deal. I executed the contract and the client was so satisfied that they have remained my biggest regular customer.


It’s important to separate company finances from your personal expenses and finances. Operating capital is like blood in the veins of all businesses. Without it, your business will face certain death.


Hire professionals to do the work for you. You must hire the right people if you want your company to survive beyond its first birthday. You have to be very patient too. It’s always good not to overcharge or undercharge to get customers. It’s better to supply the client an expensive but quality product or service instead of a cheap and junk product or service. In construction, you need to know the latest trends and technology in roads, bridges, building construction. Information is key.


I prefer to deal with the right professionals who have experience and understand the task given. In the past, I would sub contract firms which didn’t have much experience but simply because they were willing to do it at a lesser fee. I did one project and I was forced to fire the sub-contractor and hire another one who was expensive but knew what they were doing. In the end I spent more money.