In the 42 days of lockdown, Robert Kabushenga (RK) is taking off time to run a daily mentorship program called #40DayMentor hosted on his Twitter spaces. In this episode he hosts Grace Munyirwa (GM) to talk on Franchise Business
RK: Who is Grace Munyirwa?
GM: Thank you so much Robert. Grace is a businessman, always loved business. Short of saying I am a hustler. I have put my finger on many businesses. Some have worked. Some have not worked. I have limped on by and large sometimes really full of my doubt, unsure of the next step. You get hit, come back home, cry a bit, lick your fingers and go back to work.
I have been in pharmacy business for about 21 years. But before that my hand on a number of businesses which did not work. I had tried coffee farming. It didn’t work. I tried a retail shop. It also didn’t.
RK: What was the beginning of your life like? What did you train in?
GM: My mum is a nurse. She just retired about two years ago. My dad was an administrator. We kept getting transferred from one district to another. We kept hopping around with him. Wherever she would go, she would get patients and treat them. Some of them would come at home and so she would send me to the drug shop to buy the medicine she would use. She would tell me, go and buy this medicine at UGX 500 and she would sell it at UGX 2000.
She also used to run a side bar business where sodas and beers were kept under the bed.
My mum would give me pocket money at the beginning of the holiday and ask me to multiply it by the end of the holiday. You have a choice; you can take this 10K the way it is or you can multiply it the way you want and see how much you would take.
RK: So your mum gave you money at the beginning of the holiday for you to multiply it?
GM: Correct. One holiday she gave me the money and at the end of the holiday I went to a place called Fresh Foods (current Cafe Javas, Kampala Road). I went there and bought 10kg of sugar and off I went to school. My dad later found the receipt in my bedroom and wondered where I had got all this money from.
I learnt how to use small money and turn it over as much as possible as fast as possible.
During that time, there was no visitation at school. You had to prepare for a whole term. But also you had to keep some money to plan on how you were going to get back home. There was no one picking you at the end of the term. So you had to either find a kind parent who would offer you a ride to Kampala or use a taxi.
RK: So there are two lessons here; you had to learn how to use your money and how to manage your own life, is that what you are telling me?
GM: Yes. Even the parents would be shocked when you came back home. They wondered whether you had had holidays or had escaped.
I used to fear taking French leave from school because money was not easy to come by at home. My father had always made it clear that there was only one chance to education, if you wasted it, that was it. Did I tell you that I went to Busoga College Mwiri?
RK: Where was home for you?
RK: How long were you at Mwiri?
GM: 6 years
RK: Where did you go after that?
GM: I went to Makerere University. There I did one of the courses that don’t sell really. I studied Chemistry 311. I remember one guy once telling me; you have studied this course, it’s hard and yet there are no jobs after. So you will have to suffer twice.
After university, I got a job with the Makerere Institute of Social Research where I did a research gig for some time. After that, I did some jobs around. I got to know that there was some money in pharmacy. I became a medical rep. A medical rep is someone who talks to the doctors to prescribe the meds that you usually get. So a company called SmithLine gave me a job. I would move around the country meeting doctors and nurses interesting them in the medicines. Then I realized the people we were selling to were making more money than I was. So I asked myself, what would it be for me to be on the other side as the one buying the medicine. But I didn’t have the money.
I reached out to three friends and we pulled resources together which we used to put up a pharmacy in Wandegeya. It was called Aliaz Pharmacy. I remember there was a restaurant next to Friecca Pharmacy in Wandegeya called Zombozi Restaurant. We would sit out there and literally dream of a day we would have our own pharmacy. We checked the traffic entering Friecca and we said we can do this. We got a chance, a shop became vacant and we went for it. We opened Aliaz Pharmacy.
Aliaz worked. It worked so well. The demand for medicine far exceeded the supply. And we would run around the corner near current Absa Bank to Friecca and buy the drugs and sell to the client. In all this you had to make sure that the client did not notice. Today it’s what you’d call kuyiriba.
By and large, we were able to buy our own stock that we generated from the savings we had made.
But I always thought we could do more but my partners were kind of content with that one branch. We had quarrels, we were young. We would contradict each other. We fought. I decided to sell out.
In August 1999, I went to Kamwokya and set up the first Vine Pharmacy. It was very hard. It really tested my resolve, whether I knew what I wanted. I doubted myself. I wondered why I had left. Meanwhile my colleagues were growing.
I started hustling again.
Then I realised there was medicine in Kigali which was not available in Kampala. A client would ask for a drug which we did not have and I would ask them to come after two days. The following day I would be up early on the road by 4am driving to Kigali. I would be there by midday, buy the medicine and load it in the car and drive back. By 10pm the same day, I would be in Kampala.
Vine became known as the pharmacy that would find any kind of rare medicine. So I did this a couple of times until I started dosing along the way. One day I narrowly rammed into a trailer. I asked God if he gave me a chance to get home, I would never do those crazy drives again.
I stopped the Kigali route and started going to South Africa and Dubai. I would now import drugs. It was a lot easier. There was no more dosing on the plane. We then made enough money and I bought more pharmacies.
- I knew how to negotiate.
- I knew how to stagger payments. There is a guy who taught me. He said agree on the terms and prices but give up on one. If they take you on price, take them on terms. Or vice versa. Never lose both.
- I always looked out for someone who was on the wall
When we reached 20 pharmacies, I gave up the roles of hiring and doing the daily routine. We didn’t have a solid business model. I realised the business had started sinking. At some point I had to run the company again hoping that would get it back on course. It limped on, but it was like sputtering a car with less fuel. We would make the money but it was not enough to sustain us.
I went to the banks and they gave me money, for a while that worked. But in the long run, that too did not work out. I did not have a system to enter inventory. We thought we had process but we didn’t.
In 2018, I realised that this thing was headed nowhere. I was so stressed. It became extremely hard on me. I would have literally acid influx in my tummy. I went and saw a cardiologist who asked me to take life easy. Exercise more and have rest. I came back home and took some days off. The only work I was doing was to take my daughter to school, eat ice cream and watch other people do what I was doing. From then onwards, I decided to keep a regular regiment of exercise. I could have collapsed and died if I had not taken care of myself. Meanwhile the business was bleeding.
RK: Why was it bleeding?
GM: The challenge with a multiple location organisation is that you have people at headquarter who abuse the people at the branches/ local shops. The people at the branches also show the people at headquarters who adds more value. All the person at headquarter does is change a figure in an excel sheet and make a call to the person at the shop to tell them about their new targets. The person at the shop feels frustrated that the person at headquarter does not understand the business. And yet when you are hiring someone at headquarter, you bring them at a higher pay grade hoping that their value will be justified soon than later. You go through the valley of the shadow of death to make things work.
RK: So what did you do?
GM: I had to take back the reigns of the company again at head quarter. I decided to do home work on the one location pharmacies. I realised they do not struggle with decision making. It is so easy for them. They are so agile. So customer focused. We would get stock and it would take us about 4 days to take it to the shops. The single pharmacy, the day they stock is the day the medicine is on the shelf. That taught me that the bigger you grew, the slower you became. I wanted the advantage of big and the flexibility of being small. In 2013, I had wanted to franchise from South Africa through a company called Cash Converters. I went over to them but I cancelled the contract. I didn’t go ahead with the plans. But the principal had stuck. I convinced myself that this would be done.
When you are building a model for franchise, you make it multi sided. Multi sided means, you are going to look at it from the franchisee side and then the franchiser side and come up with a win-win for both parties. But I also had my back against the wall. Every day I was losing money but no one was buying the idea.
I didn’t tell you that when we reached 36 branches, I inevitably had to close some. And I had to sell some. But the people who were buying from me were buying my best branches. I knew it was a matter of time before the game was over.
My suppliers were up in arms too. No one was supplying me anymore. Word went round that Vine eweddemu. I had a car whose windows I had tinted, it’s the one I started driving. People were looking for me all over the place. I had hit rock bottom. I knew it was only a matter of time. I was hiding from my suppliers and creditors. I didn’t have any money to pay them. I got all these papers from lawyers with all threats.
At that time, I was three months behind on payroll. So I reached out to my staff and told them the truth of what was happening.
I decided to franchise and somehow, willing partners came. But we had to agree on three things. We call them the sacrosanct just like the trinity:
- Treat staff very well
- Be transparent with the money
- Be transparent with the stock
We tweaked the business model and hoped along until we realised it could work for both sides. Some shops recorded improvement of about 80% in sales. The people took charge of the shop and freed me to do a number of roles. My role became to see how much value I could add on them and how much ground I could clear for them to run and win more money.
RK: If you were to summarise this journey into life principles that have led you to where you are, how many are they? And which ones are they?
GM: Something I would say is that I have learnt this the hard way. But one thing:
- Avoid Debt. I know there will be counter arguments but I can counter argue you on your counter arguments. Bad debt or good debt, it exaggerates everything.
- The second is marry well. Jokes aside, you need a spouse who will understand what business is all about. As a businessman you are very irrational. When you go out there and get hit, you need someone who will nurse your wounds, kill your frustration but also who will fill your excitement when you win.
- Treat people well. We run an open book. I tell my staff that if we do well, you do well. My job is to make them know that they can become franchisees. I instil in each one of them an entrepreneurial mind-set. I don’t want one to join as a dispenser and leave as a dispenser. In fact, I tell them if you are working in Vine, it should be the last job you get. After here, don’t go to another job. Be an employer.
RK: How are things now? Are you still having a tinted car?
GM: No. Now I can wave. I can now confidently give out my number. It is purely miraculous that I am here. People are very important. They are your multiplier. We have avoided taking new debt since 2019. We are paying back the debt we have with the banks. You just want to keep that instalment going until one day you go back on zero. We have used resources within. All our transactions are cash. We don’t even want supplier credit. We are learning to deal and be creative with what we have.
Comrade Otoa: I am so glad you have used your vulnerability to teach us. Many young people start businesses and they have such crazy projections way out there. What would you tell them about having to go through the process? We see Vine everywhere but no one sees the craziness you have gone through.
2) How did you manage to share your time with your family?
GM: Think big but start small. The world is not ending tomorrow. There is more life ahead of you than behind you. What are you dying for? Take your time. It is like marriage. You see a couple that has been married for 40 years, they don’t even have their rings on their fingers but they look so content and happy. Don’t try to impress anyone. Start small. Show proof of concept. Have people around you who reinforce that kind of thinking; who will help you move up a notch higher.
Let me give you an example. A friend was doing three times our turn over. He seemed very content and he was running around like I was doing. He had three times our turn over and he was playing golf. But I learnt. He was running every business he has as a single unit. At the end of the month, he would cream off all the cash and the business had to start from zero. Every day you are a start-up. With zero balance. I found that very interesting.
Secondly, find someone you can work with. People don’t want to work with others but the trick is you don’t have to work with someone forever but at least agree to work with someone for a partnership at least for a year or two. Do not blacklist someone at the start. You will have conflict and disagree but work together.
2) To me, balance is a lie. You just cannot be balanced. You must tell someone that for the next 2-3 years, this is what I am going to be doing. I am going to be a bad dad so that you are able to do a, b, c, d. Balance is hard. It will make you feel guilty. The best thing you can do is to bring back home evidence that you have been working. Your family should be happy when you are away well knowing that when you come back, you will bring them something.
Solomon Tumwesigye: What formula did you use to get out of the tinted debt? You don’t just get out of debt. You can’t read a book or pray it away.
GM: 11th December 2018 was one of my worst days. I played debt. I took it lightly. One of the guys went and got an auctioneer. The guys came and swept the headquarters clean. I sunk. I put in place a mechanism of making sure every month a debt is paid. There is a guy I owed 46M. He wanted his money in two instalments. I told him it was not possible. I could not afford the instalments, I promised to give him 1M till the money gets done. It’s what I have done 24 months later. At one point you have to face your own demons. Getting into debt is a process, getting out of debt takes time too. You want to give a good testimony to your children that you went into trouble and came out. What story do you want to tell at the end of the day? My staff knew how indebted we were.
Loyce Tusiime: With all the debt and the hustle what kept Grace going? Why didn’t he quit?
GM: If I have 50 employees and each has 7 people they look after. Those are 350 people directly affected. But their dreams and aspirations are crashed. What I decided to do was ask them to come and we work together. We once wanted stock and we didn’t have money, I told them pull resources together to raise the money. They raised UGX 12 M look, you can we work together. If this thing works, we will all win. To face the same people and say we are closing is very selfish to me.
Nanziri Mary: Grace talks about telling his staff, that Vine is their last place to be employed, how do you cultivate an entrepreneurial mind-set while serving your bosses.
GM: The leadership of that company must want to have that mind set or quit that place and find one which has an entrepreneurial mind-set. If you have an entrepreneurial itch, find a place where it will be scratched, where it will be nurtured, watered and grown.
Timothy Otim: What things would you do differently if you were to start again?
GM: I would avoid debt. I would empower people much earlier. I would also franchise much earlier.
Macklyn Mugizi: As a couple, we own a wine shop, how does one manage to have those prestigious spots? 2) At what level should we think of franchising, is it when we are making much profit or?
GM: Nothing is for free. You have to pay for the good spots.
2) You need to have more than a model shop.
Anita Owomugisha: Grace, you encouraged us to get partnerships, how would you handle a partnership that does not come through as planned?
GM: Let people invest in you now and participate in the project. A dormant investor gets a fertile imagination that things are working out well when they are not. Allow them to participate. They should be able to report to work as well at least at the start. In case of any deviation, they know how to approach it. Partners should bring in more than capital.
RK: Thank you for being so frank and vulnerable. Thank you mentoring us.
GM: Thank you for the opportunity and your time.