After graduating in 2015, Rachael Watiri was eager to join the nursing profession. But she had to wait a while to get placement. In the meantime, she decided to start an online apparels store. In one of her trips to China to source some stock for the shop, a client who ran a clinic back home asked her to identify for him a place in China where he could source medical equipment. She did, and as she toured the facility and placed the medical equipment order for him, a business idea was sparked. Today, she owns MeD-RAC Medical Equipment Supplies, which equips local hospitals and clinics in the region.
Why did you think hospitals couldn’t source their own medical equipment?
There was a gap in the industry. Thanks to my medical training, it was easier for me to identify it. There was a high demand for hospital equipment and I found that most hospitals are under-equipped and couldn’t address challenging health matters. Patients were always being referred to the bigger hospitals. If I could give the hospitals the equipment they needed to reduce the referrals, it would be a win-win for everyone. Additionally, there is a shortage of local distributors. And if you find one, the prices are grossly exaggerated. But there was a snag in the whole scheme.
What snag?
To begin with, I sat on that business idea for close to three years as I had no capital for starting such a business. So I began saving diligently. When I finally decided to get a loan of Sh600,000, I approached a bank. But they informed me I was ineligible as my name had been listed by another creditor. At first, it seemed the amount was nothing to worry about, only to realise how serious things were. I had to clear my name with the credit reference bureau (CRB) first. And that was a tall order.
How did you land on CRB?
I had taken a loan of Sh500 from a mobile phone money lender and fallen behind with repayment. That little loan had been rolled over and over with interest rates and the bank manager advised me to visit the CRB offices where I would pay the clearance fee and get a certificate. This process took such a long time I regretted why I had taken that small loan back then. I couldn’t access any bank loans until I did all that I was being asked to do. So after clearing my name with the CRB, I had to raise 30 per cent of Sh600,000 in order for me to qualify for a loan because I didn’t have any other collateral. After satisfying the bank requirement, I got the Sh600,000 and with additional Sh200,000 from savings, MeD-RAC Medical Equipment Suppliers was off to a start.
What has the business journey been like?
It did not begin well and I learned business ropes the hard way. My first imports were surgical gloves in 40 big cartons. One client took most of the stock and vanished without paying a cent. I had to give the remaining boxes away and count my losses. The same script followed with the second import, which was an assortment of hospital equipment shipped in a 20-foot container. I incurred losses again as I was also taken advantage of.
Was third time the charm?
Know what I think? Clients saw a young naïve woman and exploited my eagerness to close a sale. So I got a team of professionals to work and consult with. I wasn’t about to get swindled again. The third import turned a profit of Sh400,000.
What are some of the challenges you face in the business?
Initially, shipping and clearing goods was hectic and strenuous, not to mention expensive. But things have gotten easier recently and goods are being cleared in record time at the Port of Mombasa. Also, if not careful, one can easily be swindled. Blindly trusting clients almost ruined my business to the extent of closing it down. Delivering orders without proper documentation was another grey area that ended up costing me.
Where has MeD-RAC found its niche?
We can fully kit a hospital or health facility. This can be from reception stuff like chairs, benches, television sets to hospital kitchen ware. We also provide lab equipment and ward equipment like beds, drip stands and cabinets. For bigger hospitals we bring in theatre lights, tables and anaesthesia and procedure machines. We are almost three years in an I am happy doing this.
How do you get your clients?
By word of mouth and mainly through referrals from satisfied clients. Advertising in social media platforms is another strategy I use to reach a wider client base.
Is your clothing store still in operation?
Yes. Thesource_Apparels.ke now also has a physical store though most of the sales happen online. It has been close to five years in operation currently and actually helped in raising the capital for the other business. I’m still running it and it is doing very well. It does very well on social media platforms like Instagram from where I get online customer traffic. Running the two businesses side by side can be a little taxing, but I am not complaining. I have taken to delegating more at the clothing store but when it comes to the other one, I am still fully hands on.
How has the pandemic affected the medical supplies business?
The pandemic has been like a blessing of sorts. Hospitals have been running short of equipment and other non-pharmaceuticals. I actually have been under pressure to deliver orders during the pandemic and I can say the business has not been affected much.
Do you reinvest profit in business?
Reinvesting and growing a business is the way to go. However, a large part goes into servicing existing bank loans with the difference reinvested in business. Bank loans are a reality in my kind of business, as sometimes the orders made surpass the cash you have at hand and you need a good relationship with your bank to finance the deficit.
Business lessons you have learned so far?
Concentrate on delivering the best. Reputation is vital, it is what keeps you in business.
Always get proper documentation for your business. If you don’t, you may lose so much money trying to get it right.
Do some research into what you are getting into. Take some time to gather enough knowledge before deciding if that investment risk is worth it. Always consult.
Involve your team if you have one. They may notice if something is off.
