Interview by Joakim Larsen
"My name is Merhawi Tefare, I am 20 years old and finished the Alchemy World Bright Future programme with IT training in 2012. I am currently following the New Venture Creation programme.
I recently finished my diploma in computer maintenance and now I am having my vacation from school. And I am busy for I am preparing to open a stationary shop here in Mekele. I will open it by myself and it will be soon.
I will finance the shop through the 20 by 80 system for government financing. I have saved up 6.000 birr and will ask my sister for another 14.000. And when I have 20.000 birr I can borrow the last 80.000 birr that I need to open. The government financing will ask me for my business plan. And based on the quality of the plan they will lend me the money in two rounds of 50.000 birr.
After the business application is submitted I will have to wait for three months. In that time I will be working on fulfilling the criteria for the 20-80 loan: I must have a well thought business plan and plan of action and I must find a shop to rent and present the 20-80 bureau with a signed contract. I just started the application process and after three months I plan to open. So now I am looking for the place. Once I have the place and the application is approved it is going to take me one to two weeks to set up the shop.
For the materials for the shop I have friends in Addis who will help me. The location of the shop should be in the main street. There is a stationary sefar, an area with many stationary shops where everybody goes for stationary. That is where I will open too. And I will have three types of customers:
Students and other people buying stationary, B-2-C, Sale and distribution for other stationary shops, and B-2-B and businesses bureaus and NGO’s, B-2-B.
I am sure the shops, the bureaus and the NGO’s will be my customers, for when I was working in the administration bureaus for the youth organisations I made many contacts. And I will use my network to get into the market. I will also participate in the tenders for the NGO and government office stationary contracts and I can win the contracts, because I am confident that I can deliver good quality at competitive prices.
Another thing is that most people who own a stationary shop simply stay in their shop. But I will hire a staff to work in the shop and in the meantime I myself will be doing the selling and the distribution to my business customers. So in the places where I need to be present, I will be present.
Since this is a mature market there are many well-established players and the competition is strong. But I will find ways to differentiate towards all the three markets that I am targeting.
Many of the things I learned from Alchemy World I can now use in my business. The basic computer skills have already helped me. For the startup of my business I am thinking on what we learned about starting a market, how to build up a good network and how to be close to it. I am thinking about what to produce – and in my case what goods and services to deliver, how and to whom. And who is the good customer and what do they need. I am also considering aspects like what should be my financial source to start the business. Knowing my own resources and capabilities and knowing how to get the resources I need. Another important aspect is how to differentiate the business from the competitors.
In my case the most important thing would be how to start a business. A lot of people start and quit their business because they don’t know the basics and they don’t know how to win market shares.
Stationary is a good investment business but there are already many doing it so the competition is fierce. But I already have a good knowledge about the business for in my spare time I have been working for free and helping out the people who are already in the business.
Now I am hooking up with another former student from Alchemy World, who also knows about the business and who has a good network in this industry. So I have the opportunity to share my thoughts and ideas and challenges with him.
For sure this will be a big challenge, but if I do it right I have a good chance of being successful and setting up a profitable business."
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