What I learned about business after my first client put me in debt

Douglas Brian Odipo,Founder Vanguard Solution. Photo/Elvis Ogina

The main thing many young people have in mind once they graduate is either landing an incredibly well-paying job, or building their own company off a side gig they started in school. Douglas Odipo falls in the latter group.

Douglas had an entrepreneurial dream built on his work experience while undertaking undergraduate studies at Moi University.

“While in campus, I used to do online writing jobs and research work and get paid. Since I used to make money, I was confident that once I was done with my education, I’d have more time to dedicate to this line of business and earn more cash,” he says.

Cut-off points

On graduating with a degree in biotechnology and biosafety in 2013, he registered his own company, Vanguard Solutions.

“The first big job I got was for online transcription work, which was given to me by the same people I used to do online work for,” says Douglas, who’s now 28.

On looking at the scope of work, he realised he would need more people to meet the deadline. He solicited for funds, hired three assistants and moved into a larger office

“I got Sh250,000 in total from my friends and family and pumped it into the business. This was to pay for rent and at least the first month’s salaries for my employees,” he says, adding that he also used part of the money to furnish his office and buy computers.

And then things failed to go as planned.

As soon as they finished the first month’s assignment, Douglas says his company submitted the work as required and he sent his invoice for payment.

“I was to be paid at least Sh200,000 for the month’s work. But a few days after submitting the job, I was told my company didn’t meet the cut-off points to be paid. This came as a shock because I was very sure I had done everything needed to get paid.”

Change of plans

Douglas had expected to pay off the Sh250,000 he’d borrowed within two months.

“I expected to be making at least Sh150,000 per month after deducting all expenses,” he says.

As tends to happen with online businesses, Douglas hadn’t signed a contract that would have enabled him to follow up on the payment.

“All I had signed was a non-disclosure agreement and since these were people I had worked with for over a year, I didn’t see the need for pushing for a contract,” he says.

With his money having gone down the drain, Douglas decided to change his business model and start afresh. This time, he was wiser.

He’d seen first-hand that online businesses are never a sure deal since you’re not dealing with the client directly.

“I changed my business plan and decided to cut out middlemen from my business. That meant no more online work for me. I then decided to venture into research work – data collection and analysis for individuals and small firms,” says Douglas.

“I also started operating from my house and whenever I had to meet a client, I would do so at a restaurant or borrow space at a friend’s office.”

However, he still had to pay off the money he had borrowed even as he built up his new business model. He did this by taking up a lot of online writing work, which he got on sub-contract terms from friends he had collaborated with in the past.

After getting his bearing, Douglas opened a small office in Rongai – this time with no permanent employees.

Vanguard Solutions now collects and analyses data based on a client’s needs. Although the industry is flooded, Douglas says many people providing the service don’t always meet client expectations.

“I have clients who have complained that the work they contract out is either not completed on time or the results fall short of what was expected. Some companies only provide information that is obtained online instead of going to the field to get raw data,” says Douglas, adding that field work is his company’s strong point.

“We try as much as possible to maintain integrity. When a client gives us work and we realise it is beyond our scope, we don’t take it. Also, when we take work, we agree on the matrix of delivery and the clients only pay when they are satisfied with the result.”

Getting partners

So far, the company’s business has grown from referrals from clients, most of whom are working students and small companies.

Last year, Douglas brought in two partners: his brother Rodger Odipo, a mechatronics final-year student at Jomo Kenyatta University, and Daniel Mutahi, a mechanical engineering graduate from the University of Nairobi.

Daniel is responsible for contacts in data collection, especially in areas that are difficult to penetrate such as banks, while Rodger is responsible for technical issues and online matters.

Although Douglas owns the company, the partners share responsibilities and earnings based on how much they get from the work they do. Next year, Douglas expects the partners to buy shares in the company.

Vanguard charges at least Sh15,000 for data collection and analysis assignments, depending on the amount of work they need to do.

“When we have too much work, we hire people to help with data collection,” adds Douglas.

With the technical expertise now on board, he says the firm is looking to grow the business and venture into technology solutions.

“Our aim is to help companies and individuals use modern technology to ensure efficiency in their businesses.”