TWO months ago I was approached by one of my clients who is an entrepreneur.
He asked me if I could offer business consultancy to one of his friends who was in dire need of such a service.
For almost two months I did not get to meet the potential client.
A fortnight ago decided to make a follow up to inquire on the arrangement made to assist his friend in running his business.
To my surprise, I was informed that the entrepreneur had committed suicide.
I received the sad news with a deep sense of shock and sorrow.
I was told that the entrepreneur, who I am not going to name for obvious reason, was in a well paid job and had a piece of land which he had inherited.
He sold the land and obtained good money out of it and he resigned from his employment where he was given a good terminal benefit package too.
Having put the amount he obtained from the sale of the land and the package obtained from his employers together, he decided to invest it in some business, which I will not name.
He bought a second-hand piece of equipment for his business from another person who had abandoned the same business for reasons best known to himself. He left a bit of money which acted as working capital.
He also went into capital lease by obtaining three delivery vans with a contract of monthly rental payments for the period which would have made him acquire the assets at a certain point.
According to the source of the story, the entrepreneur’s business took off and was targeted at the market in rural areas supplying the product.
From the onset his idea looked formidable and brilliant as the business attracted a lot of customers.
Although the cost of input of running the business was high, the business outlook was equally promising in the sense that the profit margin was good.
As the business progressed some setbacks started setting into the business and one of the major one that unsettled the business was the mismanagement of the funds by the marketing workers.
The rampant theft of sales money by the marketing staff was the major problem as the anticipated sales money was not brought according to planned budget.
The second major setback in the business was the constant break down of the machinery in the plant as it was second hand.
The premises in which the plant was set were acquired on rental basis at equally high cost, another setback.
The untimely acquisition of the second- hand equipment which constantly broke down and the rampant theft of sales money coupled with the hiring of the consultants on higher ticket slowed down the business and eventually wiped out the working capital.
The situation was worsened by the accruing of rentals both on the premises in which the plant was mounted and the acquisition of the delivery vehicles, on capital lease basis.
These factors contributed to the poor performance of the business, leading the business owner to resort to borrowing to beef up the dwindled working capital.
The entrepreneur went to borrow from two micro-finance institutions where he pledged the collateral in form of the moving asset, motor vehicle and fixed property, a house.
Despite the infusion of the working capital through borrowing the situation did not become any better.
At this stage he also entered into obtaining materials for his business on credit adding to the long list of liabilities.
The situation deteriorated in such a way that the entrepreneur decided to sell the brewing equipment and according to the source that entrepreneur decided to sell the house, which he had pledged as collateral, to one of the lending institutions.
The vehicle that was pledged as collateral to the other micro-lending institution was grabbed and sold for non-loan repayment.
Having sold the house and the equipment, he put the money together he rushed to the “prophets of doom” in a certain township here in Lusaka who had promised him that they could multiply his money and help to sort out his problems.
He handed all his money to the prophets and was told to report to them after three days.
On the third he went to check on his money only to discover that the prophets had disappeared leaving no trace.
Subsequently, he took his own life.
For lessons drawn from this sad episode, look out for part two of this article next week.
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