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Dr Nahabwe: never borrow to start a business

Dr INNOCENT NAHABWE is a quintessential jack of all business trades. The 39-year-old veterinary doctor has lived a life of constant hustles with a string of entrepreneurial ventures that he calls small businesses.

In his new book titled Treating Small Businesses, he offers tips on how to treat employees, manage finances and why someone should never borrow to start, Joseph Bahingwire gives abridged excerpts from the book.

Just about every business I have done has been an eye-opener. I have had my fingers burnt and I have had some successes. At each level I have encountered scenarios that made me rethink my strategy in that line of business. I have had my trust abused.

I have made bad business decisions that have resulted in financial losses. I have been duped by people I once called close friends. But I don’t dwell a lot on mistakes. Because when you dwell on mistakes, you end up wasting a lot of time. I consider every low point a lesson.


Your staff is the most valuable assets of your business.

“Treat your men as you would your own beloved sons. And they will follow you into the deepest valley”, wrote Sun Tzu, in The Art of War.

He couldn’t have been more apt. Your staff is your first customers. They are the first point of contact between the customers and the business. They are the face of the business. I hold a belief that in business you can never go wrong if you have great people that believe in what you do.

But this should not be at the expense of your ideals as an employer. Trying to hold on staff, for example can be counter-productive. Sometimes some people think, “Oh, I cannot just dump someone because I have trained that person and helped them get somewhere.”

It is in the same vein that I believe someone should not be too attached to an asset. Having emotional attachment to something is likely to cloud one’s judgment. At some point holding on to underperforming employees becomes a risky strategy.

I believe in employees earning their pay. Every employee owes a contribution to the pie they hope to partake of. Like the Bible says in 2 Thessalonians 3:10, if a man will not work, then he shall not eat.

Today we live in a very dynamic world. A skill set considered very crucial today may become obsolete tomorrow. Oftentimes, people who fail or refuse to adapt to new ways of working end up being disgruntled, disruptive and counterproductive. The biggest downside to such negative vibes is that they are contagious and disgruntled employees who will easily spread the negative energy to their peers.

Gauge your employees by their results. At the end of the day it is the numbers that matter. And numbers can never lie. If your employees cannot carry their weight, try to find out whether they are getting appropriate support to deliver.

If you do everything possible and there are no signs of improvement, set timelines within which they must improve, or you will part ways with them. Procrastination is the mother of all failures, goes one timeless adage.

When the set timeline elapses and there are no positives to show for your patience, it is time to rid the basket of the bad apples before the rot spreads to every corner.

Seriousness and deliberate action on set targets and deadlines speaks volumes about the leader’s character. They are the qualities that will earn you respect. I have learnt from experience that managers who demand results and hold people accountable for their actions are more respected by those that work under them. It is one way of motivating staff.

I believe in building and growing people. The businesses we run today are no longer the brick-and-mortar kind. Always try to forge happiness at work because people will always try to spend a lot of time at the workplace.

Over time, I have noticed one big challenge of deploying people in wrong places. Oftentimes the careers people choose are down to what is available at the time of making the choice. So, people end up not studying the things they love or do best. Some people simply crammed notes and they passed, and got prestigious courses they had no interest in.

Sometimes we wrongly judge people. And just like you cannot fault the goalkeeper for failure to score, you need to employ the right people in the right places.

Somebody could be a fish and you try to judge their ability to climb a tree. At one of my companies, we have a basketball fanatic who watches NBA games from 3am and cannot manage being at office by 8am. He does his job well and is most productive at night.

All we do is agree on his deliverables and measure his performance. You do not want to have someone who will come and pretend to be busy yet they have been idle all day. Pay should be tagged to performance.


It is very important to realize that company finances are not personal money. One reason why people don’t like partnerships is because they want unfettered access to company revenues.

As company directors, pay yourselves a salary or emoluments to keep you going. That way you do not end up in a situation where you are spending more money than the company is generating.

You do not start driving up the company’s revenues more than the stipulated regularity just because the company is making more money than you anticipated. There will always be a rainy day. I believe the biggest reason most businesses never get to see their first anniversary is because once the money starts coming in, the directors see their company bank balance and interpret all the inflows to mean profits.

Almost immediately they adopt lofty lifestyles. This drains the company of its much-needed resources. Its growth stunts or starts a slow death. If more revenue attracts more expenses, then you have a leaky basket. It is like loading a young tree with swings before the stem is strong enough to carry the weight.

Once you start getting such ideas, it is a matter of when, and not if, you will close shop. In all our business, all the directors are paid allowances like anyone else and we are supposed to live within our means. When the company gets a windfall, you don’t have to go and empty the coffers simply because it is money you were not expecting.

I do not believe in loans for anyone to start a business. I believe in organic growth. Start small, learn and grow along the way. I find starting a business on borrowed funds akin to beginning 20 meters behind the start line in a hundred meters race.

Imagine borrowing 100 million to start a business. At this point you have not grasped the basics of business. From day one, the business does not have funds of its own. And that’s besides the cost of money in this town. The returns on most businesses do not tally with interest rates levied on available loans.

With the rising cost of doing business, the rent paid in dollars and the rising energy costs, borrowing money to start a business would be the worst possible start one would have.

The challenge with most budding entrepreneurs is that every business plan is 100 per cent successful on paper until the actual implementation starts. Reality strikes once the rubber hits the road.

Many of the plans and road maps are instantly thrown out of the window because of the unseen roadblocks. Once things start going haywire, anything that can go wrong will go wrong, like Murphy’s Law states. At this point there can only be one way for you - DOWN.

Another thing that most people fail to realize is that whereas banks may be willing to lend you money, they will only do so after realizing that you have the money’s equivalent in another form.

Or if you have the capacity to pay several times more. To use the phrase a friend once used, banks will only lend you upon confirming that you do not need the money.

If you are borrowing Shs 100 million, the bank will lend you after staking collateral worth Shs 160 million. If you have a house worth Shs 160 million the bank will value it at Shs 80 million before they can disburse any money to your account.

About the author

Dr Innocent Nahabwe was born in 1980 is an all-round entrepreneur, marketing pundit, writer, veterinary doctor and a father to three Ugandans. He holds a bachelor’s degree in Medicine and a master’s degree in marketing.

He is the CEO of Blue Cube, Galaxy FM, Club Amnesia and a sports betting company, among others



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