← Konnected Minds Podcast with Derrick Abaitey
Konnected Minds Podcast with Derrick Abaitey
Segment: Capital Is Never the Problem - Your Credibility Is
00:13:03
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Transcript7 lines
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Captain Buddy said that if you get your human management, the people you are working with their management if you get it right, you have solved 80% of the problems you have in your business in scaling up from very small to upstate. So employee welfare is one thing I really prioritize. So a systems a systems and structures that have brought our company from where it was to where if I say we all hear people say system, structure, system what do we mean? What exactly do we mean? So one of them is recruitment and people management. So let me say people might be in total make a strategy of it. Are you going to poach top talent or you're going to recruit from link up with some university and let them come and do internship like we do at our place. They come and do internship at our end. When you finish your interview you are good. You can come and do your national service when you're done your national service, we look at you screen some of them, we retain you some. We even go and do quiz competition at some of the schools. Pick the top talents, award them with something you come in you get it. So it has to be your strategy. You have to be very intentional about some things you do. If you want to let's say manage your finances how are you going to get money to put in the business? Oh you you are going to use bank loan. That is your strategy. For me I'm going to use there's something we call debenture. I don't know if you you know how it works but when you go into corporate financing is it this thing didn't come coincidentally I have learned a lot about business so I did MBA Like I was saying I say I've done hr, I've done corporate governance to become member of who got me inducted into a member of as a member of Institute of Directors Ghana as a certified director I did llb. I mean law degree. I did finance as mba. I've done a lot of things too bring me it's all part of the Learning else you can't do these things. So the companies act under corporate finance talks about something we call debentures. Loans are there. But sometimes families and friends can give you some instrument, something like a small not formalized loan. And you use it to run your business. And you give them an agreed amount of money. However, if you're paying them those profits, you have to just tomorrow as withholding tax. That's what the law cease. So there are a lot of families and friends who have like Madame did for me some time ago. There are lot of families and friends who have money. How did I meet those families and friends? From school. They were giving me 5,000 and 2,000 as their school fees. Now they have grown. So they can give me 100,000, 200,000. Or you don't agree with me? I agree. So that is how it works. And I did what we call debenture certificates for them. That's what the law says. So without knowing what the law says and how these things were, we can't execute them. So debenture certificate means that people who have $100,000 $200,000. In fact Derek, if you want 1 million Ghana city, right? If you want 1 million Gana city today 50,000 Ghana city from 20 people is 1 million. Maybe you haven't thought of that. Do you get it? 50,000 city or let's say it's too big. Let me do 100,000 Gana City. If you are NS, you want 100,000 Ganas to do business. Do you not think you have 20 of your classmates that have 5,000 that can bet your 5,000 ganac on you because you are credible at school. 5,000 from your colleagues. They can get for you 5,000 from 20 people is 100,000 Guinness, right? 5,000 from 10 people is 50,000. You are small mini import business can do it just that it has to be families and friends. There are rules around it. That's the knowing your ignorance. The rules around it is that you can openly advertise to the market. Because you are switching to securities and Exchange Commission. That one. You are soliciting funds from the general public. You are not allowed to do that. You also can make it like you are taking deposits. Because you are not a deposit taking institution. Because there are registered companies that had the laws of Ghana allow them to take deposits. Do you get it? But your mother and your sisters, your families and friends can give you money. It's allowed. Yeah. You don't expect them to give you the money and you don't give anything in return. So the law has made an allowance that there should be something like the benches that people can give you their money without you borrowing from the bank. And it's not public invitation. Also that you can use their money to trade and give them money. I mean something small on it. Just that that small thing you are paying them, you have to retool something small on it as tax. Mp. Do you get it? So if you understand these things, it's good and you can scale it up. There's no limit to it. You can scale it. If he was having 100,000 now he can get 1 million for you. Even if you don't extend the number of people, he himself can use his head as guarantee and take from some from her husband and add it to his. This you are still dealing with the same person and give it to you or you don't get my way. You also have your friends. What you have only restricted is how many people you want to deal with. But it helps with them to get if they want to get some money from some families and friends to increase how much they can give you. Well, all the law says is you are not taking deposits. You see, sometimes let's say I get a contract, a big contract. It's bigger than me. I don't want to quit big figures. Let's say hundred thousand Gana City contract. You are being smart about this one. Let's say you have 100,000 ganacity contracts and I don't have the money to fund it. I can break it down. This is my cost price, this is my selling price, these are my margins and go to three friends that I have this contract that I have to do, but I don't have the money to do it. So each of you should contribute 30 CD. 30. 3000-030000-30000 city, right? And then myself that brought a contract. I don't have money. So I would contribute only 10,000 city to make 100,000. And we will get, let's see, 150,000. At the end of the day we will share it according to our ratios of contribution. Is that not it? Yeah, yeah. So I mean me, capital, capital has never been my headache. Building credibility is only my head. Because when I build a credibility, people give me capital. So capital has never been my headache. When I build credibility, people give me my capital. When you start afresh, you don't get a lot of people. But when one person does it with you. So I mean you are credible enough, right? From school and you pay. Oh, and I pay. I Mean from if from 20 it's not me pay. You know the customer gives as soon as the customer pays I.
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We.
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We share the monies everybody. So then there's more have to deduct pay law. If they are the. The small withholding tax I have to that on there my rate my people understand you understand I pay to government. That's government's part of it. It's not on their full money, it's just on the profits. You get my point. So I mean it should be very easy for us to skill capital should I mean like if you're looking for one million dollar yeah. $50,000 from 20 friends it's $1 million or I mean so that is so the same way as a 50,000 5,000 CD from it just depend on the level you are 5,000 CD from 20 friends is 1 is 100,000. Some of. Some of these people they don't have friends that have that kind of money. No, that's what we were sent to school for. You play at your size. We were sent to school to get this kind of mates that can give you the amount of money. So at your school maybe your school is like that. Let's say you went to nursing school. Nursing school. That means that your friends you not be able to get 100,000 for you. But he can get 3,000 for you. He's saying that if he can't get 3,000 what makes him think that his friend has 3,000? No, you haven't understood my point. My point is that it's not like you can't get 3,000 just that your 3,000 is not enough to start what you're trying to do. So the fact that you can't get 3,000 doesn't mean that everybody in the class also comes from the same socio economic background like yourself. No, just that mean I just don't like doing the money side of it when I do it with you for a long time. My next project I want you to co own. We want. I want to co own with you. I want you also be a business owner. I want you to become a shareholder instead of just trading the money because I can lose the money at any point in time. So there are projects that is what.
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So you.
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You are using other people's money? Yeah, I'm using other people's money. They also. They have don't have time, they don't have ideas. They only have the money. Why do they have money? Some of them are doing well to pay 95 jobs or they have access to Salary loans because of the work they are doing. So they would. Because of my credibility, they will use their salary loans. Maybe the loan rate is 15 per year. The transaction, your contract you are going to do, they will get 40%. They will go and borrow from the bank at 15%. Right. How are you able to prove to people that you're not going to jackpot with the money? Because of where I started from my madam. So it's referrals. I don't talk to general people. No, I don't. That one is public solicitor of funds is if you are not registered with Security Esteem, you can do that. So I don't publicly solicit funds that people should give me money for me to do. No, it's private people. Private people, they know you family, they know your friends. So it's referrals. You get it? Referral means that my mother will you say, oh, I don't have money, but I have this yam or this farm or this thing here gets bias. Let them bring their truck, load it. The money, I will even hold it. Use it yourself to go and bring him back to me. I mean, he works that fast. I mean the, the. The. That term medical landlord. What does that mean? Where did you get that from? We were into medical supplies. Right. That's how we started. Yeah. Now it's just a very tiny of bit of what we do. You've expanded the business? Yes, we do. I call medical real estate. What does that mean? So it's new in Ghana. I think if I'm right then, or if I'm not mistaken, we are the first company that's doing something like that in Ghana for South Africa. Even a company is listed on the South African stock exchange that is doing medical real estate. Us is there. They are big guys. One of my distant mentor, he does $4 billion in medical real estate. Yeah, medical real estate. But for them, what they do is they build hospitals, rent it to doctors who don't have money to build hospitals. Okay. So that they will do the consulting. They share the revenues. You have your license, you have your credibility as a cardiologist, nephrologist, gastroenterologist, whatever. So we see real estate that people play in is good. Everybody is preaching real estate, but we are trying to do something different. Don't forget on my idea of trying to go into engineering. So the engineering has influenced the way I still do anything at all that I hold. So instead of going to general real estate business, I said, okay, I'm in the medical space. So if people can Build hospitals, can build pharmacies. There are people also don't know how to run the hospital. But they have money, but they wish they would own a hospital one day. Then what I want to do is that let me build the hospitals and sell it the hospital to them or let me stock their hospitals for them as a. As just a medical equipment supply. Let me stock their hospitals for them or let me build the apparatus for them. But at the point in time I was realizing something. The hospital is not the building, it is the system. And structure the business so someone can have a small building that is generating more revenue than a big hospital. I mean big building hospital. So it meant that some of the people I do the hospitals for, after talking for them, don't know that they don't have the strategies, the business ideas, the things me and my team have learned, my legal department, my hr, my strategy, other things. They don't have that. If that is the case, then let's build hospitals and allow people to own part of the hospital or part of the pharmacy or part of the diagnostic center. Just as the way people own Airbnb apartments in a big building. You get it? Meaning that we can let you virtually own a healthcare business without touching anything with your hand. Do you get my point? We can say we are building this particular hospital. It's one city. If you're interested in owning a hospital in this particular location, if you want 50% of the one city, you can pay 50% of the value of the hospital. Is that not it? So that is what I am currently doing. So people build hospitals too, sell drugs and get revenue. Or people build pharmacies to sell drugs and get revenue. But now we build the pharmacies to sell it out as a pharmacy, not as a store and not as a. We build diagnosis centers too. I mean medical diagnosis labs to sell it out. But there are some people, if you look at them, you sell it out, you come back the following year and you will see that the money has gone waste because they couldn't manage it. To help them manage, we have decided that sometimes we will suggest majority of just a portion of the hospital to them and retain some. So we run it to profitability and we exit like a venture capital company. They get it. That is what brought the name medical and loaded medical real estate business. So we are doing real estate. It's a commercial form of real estate, not residential commercial just like people do warehouses in our space is in the healthcare space. And a lot of my friends, especially I have friends in the. I mean friends who manage footballers. A lot of athletes, they don't have time to go and manage businesses, but their business, their company is like that, or what they do is like that. When they have an injury, they can have life threatening. You said that they can't continue football.
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