My Money Mistake is a weekly PiggyVest series that explores the worst money mistakes real Nigerians have made, and the lessons they learnt from it.
For this week’s episode of My Money Mistake, we spoke to a 31-year-old entrepreneur who regrets starting his business on a large scale. He talks about dealing with dishonest staff and eventually losing control of his business.
Could you tell me your biggest money mistake?
In 2015, I had just finished my NYSC at SMEDAN (Small and Medium Enterprise Development Agency of Nigeria), so I was feeling very entrepreneurial. I had some money on the side because I was working while schooling abroad. I didn’t want to join the unemployed troop, so I decided to go into farming — fishery to be exact.
At the time, I had a friend I played squash with. I pitched the idea to him and he loved it. He wanted us to start right away, but I stalled.
Why didn’t you start with him?
I was waiting for pending funds, but more importantly, I wanted him to start so I could learn from his mistakes. He was going to start small, and I had a mental picture of what I wanted my farm to be like; it was going to be grand.
LMAO. Five months later, I had the funds I needed to start. I sunk a lot of money into the business.
How much did you start with?
₦1.2 million. After the initial investment, other expenses ran up the numbers to ₦2 million. I had to rent the land, set up the ponds, get the fingerlings from Delta, buy feed, pay staff and handle security. It was a lot, but I did it.
At what point did any of this start feeling like a mistake?
When I realised that I had started too big, and I didn’t have the knowledge to sustain the farm. Things were failing, and I didn’t have as much control over the business. That was when things quickly got out of hand.
First of all, I lived very far away from the farm, so being present all the time, especially during emergencies, was very difficult.
What about the staff on ground, why didn’t they manage things in your absence?
Those ones that stole from me? I’d come sometimes and meet fish bones scattered everywhere. They were stealing from me and didn’t even bother to hide it.
I later found out that the wives of the men I paid to tend the farm would come and take the fish in a large basin, dry them, smoke them and sell them without my consent.
The entire thing made me lose faith in humanity. I had such high expectations because I was paying them well. I was even covering the school fees for some of their kids. But they kept stealing with no regard for the business. It drove me crazy.
Where did you hire these people from?
They were almost like a package deal with the land. When I rented the land, the people there were the most cost-effective choice available. They knew the land and you couldn’t vouch for the security of your farm if you didn’t hire them.
The plan was to do what needed to be done and, after I found a balance, eventually bring in my own people.
That’s truly tragic. Did you ever confront them?
At first, there was no way of accusing them. They could easily deny it and I didn’t have proof. I couldn’t keep track of the number of fish we had because we started with 800 and they like hiding in murky waters. To do a headcount would mean draining the pond, and all for what?
When I got tired, I fired most of them. They weren’t even around, their wives had to relay the news. After that, they rained curses on me, but it was already too late. I had people I trusted and kept but after 8 months, I made a 70% loss and had to shut down.
That’s so sad.
It’s on me. I ignored a major rule of thumb in business: start small. I didn’t and it cost me so much. The feeling that I had the money at the time and could be doing more is what ended up messing me up. I was hoping large scale would translate to profit. I just didn’t consider the human factor. The entire situation forced me to learn the hard way.
I’m sorry about that. What’s your biggest lesson learnt?
Research thoroughly before starting a business. Bigger isn’t necessarily better. Also, when it comes to business, trust holds no water. Place proper rules for staff so they know you mean business. Not sure if it was over-familiarity or just bad nature, but people will screw you over if you let them.