Starting a successful business from zero is nearly an impossible task for most entrepreneurs today. In fact, 9 out of 10 would-be entrepreneurs who abandon their entrepreneurial dreams usually blame it on lack of access to capital.
If you’re in this category, read and learn from the entrepreneurial experience of Gabriel Ogbechie, Founder and Managing Director of one of Nigeria’s most successful Oil/Gas downstream operators.
This is the first part of the transcript of a lecture he gave on “Running a Successful Business in Nigeria”
My name is Gabriel Ogbechie, I am the Managing Director of Rainoil Limited. Rainoil Limited is a company playing in the downstream sector of Nigeria’s oil and gas industry. We’ve been in existence for about 19 years.
The title of our lecture today is RUNNING A SUCCESSFUL BUSINESS IN NIGERIA: My Experience. So, essentially, we will be talking about running a business in this country from my own point of view. I am essentially going to share my own experience; it’s an experience that has worked, but I don’t want to delude myself by saying that is the only way through which it works. But let us learn from my own experience and see what we can get out of it.
I attended the University of Benin. In 1987, I left the university. While at the University of Benin, I took a degree in Engineering, I did my Youth Service in Kano, 1987-88. Upon completion of service, I worked briefly in Kano, then came to Lagos and joined the company called Pricewater House. I was in Pricewater House up until 1992, then I joined another oil company called Ascon Oil Limited.
Birth of the Entrepreneurial Dream
I was on a fixed salary of N30,000 a month. And I asked myself one very simple question: ‘Gabriel, what else can you do to make N30,000 a month?’ I asked myself that question as I believed then and I still believe today that anything you can do to make your salary can take the place of your job.
If you are working in an organization; let’s say a bank and they are paying you N200,000 a month. Essentially, what they are saying is give us your time from 8-5, perform these duties and we will give you N200,000 at the end of the month. Anything you can do to make that N200,000 can take the place of your work.
So, I asked myself that question: ‘Gabriel, what else can you do to make N30,000 a month?’ And I said if I could sell one truck of diesel, I will make one naira per litre and a truck of diesel is 30,000 litres. If I am to sell a truck of diesel and make one naira per litre margin, I will make N30,000, which was my salary.
A truck of diesel, 92,93,94, was selling for N300,000. We were buying it for nine naira per litre and selling it for ten naira per litre making a one naira per litre margin. So, I said if I could sell a truck of diesel, I will make one naira per litre, which was N30,000.
Mission to Build A Successful Business Begins
So, I set out to raise N300,000. But first things first, I needed to incorporate a company. So, in 1994, I remember that my wife and I went to meet a friend who is a pastor and lawyer. We went to their house one evening and we started bandying names around. ‘Gabriel, why don’t you call it Gab Oil, why don’t you call it this oil, that oil and my friend said Gabriel, you know Rain stands for blessing, so why don’t we call it Rain Oil and I said you know what, you are right, but then instead of Rain Oil, we are going to merge the two together to make one word, Rainoil Limited, and that was how Rainoil Limited was incorporated in November 1994. I got my certificate of incorporation, put it in the drawer and I called it step 1.
Remember, I had a hypothesis. The hypothesis was that if I could sell a truck of diesel in a month, I will make N30,000. So, I set out to raise N300,000. I didn’t have the money, I wrote proposals, I went to those who I knew had the money. I was so sure that it was going to work, but all I heard was come here today, come here tomorrow. Stories!
So, I learnt my first lesson: people rarely give money to those who don’t have. Do I have a witness in the house?…..
The Story on Starting a Successful Business from Zero, the Story of Rainoil continues in part two entitled: The Inspiring Story of Rainoil: Lessons for Entrepreneurs.
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