WINDHOEK - Demystify the jargon and what you get to is the idea that ‘market development’ and ‘backward and forward linkages’ means you don’t only finance clothing manufacturers to create a strong local clothing industry, you also finance clothing outlets where people want to buy.
The local apparel manufacturing industry is in its infancy, but the success of franchises retailing youth apparel has shown that there is a demand for well-branded and highly targeted outlets that can cater to the needs of Namibia’s youth.
Knowing this, the Development Bank of Namibia (DBN) paid close attention to an application for finance from local youth entrepreneurs Hosea Angula and Vaino Ashipala and their business plan for a youth-magnet outlet, ‘Urban Legend’.
According to the team which met while working in the IT profession, the idea had its roots in repeated requests to bring back trendy clothing brands for friends and associates, while on business trips to South Africa. They immediately picked up on the fact that clothing brands were also associated with well-known musicians.
“With an increase in requests, one of the shop owners in Johannesburg asked us why we were not setting up our own shop and that is how the idea was born,” says Angula.
The business received a DBN loan for stock and working capital and the partners used their own financial resources to visit and secure agreements with suppliers in South Africa and other parts of the world. Although the partners intended to focus on Namibian brands in their early planning, they found that local brands are not yet strong enough to cope with the high demand. They still plan to develop and stock Namibian brands in future.
“I bought a house when I was 22 years old, which we used as collateral, as well as our life covers and policies,” Angula said talking about how they overcame the initial requirements for finance. The partners’ business plan and its clear indication of viability completed the equation.
Angula went on to describe how they proceeded to establish the business and the challenges they faced at the beginning of the venture. The business was supposed to open in July 2011, but due to delays in fitting the shop, they could only open in September 2011. That meant that they found themselves paying two months occupational rent without an income stream. He says reliable sources of supply are also an ongoing concern.
“Since January, the store has been taking care of itself, although we’re not making a profit yet, we are breaking even, which allows us to take care of operational costs, which includes salaries, marketing, stock, training and searching for investment and supply opportunities in markets outside Namibia,” Angula added.
Since Urban Legend currently has four employees, who work from Monday to Saturday, Angula and Ashipala run the store by themselves on Sundays and use the opportunity to keep in touch with the store’s customers. Encouraging other youth entrepreneurs, Angula said the only reason why the business came in to being was because of their belief that it would work.
“Take your dreams, turn them into goals and create a business plan that will help you realise those goals and grow to be a success. When one door closes, continue looking for another one to open to help you achieve your goals.”
Angula and Ashipala hope to grow the shop in the next few years and to establish franchises in other centres. They also plan to open a DJ Academy, which will go hand–in-hand with the branding of music and musicians.
“I am the thinker, Vaino is the implementer and we complement each other. I read and he is streetwise. He knows what is going on in the streets. I do the business plans and presentations and he meets with suppliers in South Africa to negotiate and create business for us,” said Angula.
“The Development Bank of Namibia encourages initiatives such as Urban Legend and provides finance where the business plan is viable. We have spoken about our interest in the youth market before and we reiterate it. The youth is the training ground for tomorrow’s entrepreneurs, and we particularly value this segment of the market. We hope to hear more from Hosea Angula and Vaino Ashipala in the near future,” said DBN Head of Lending Martin Inkumbi commenting on the opportunity they provided to the young entrepreneurs.