Street smart and down with that

DEMYSTIFY the jargon and what you get to is the idea that ‘market development’ and ‘backward and forward linkages’ mean you don’t only finance clothing manufacturers: to create a strong local clothing industry, you also finance clothing outlets where people 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, who met while working in IT professions, the idea had its roots in repeated requests to bring back trending 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,’ said 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. Talking about requirements for finance, Angula said: ‘I bought a house when I was 22 years old, which we used as collateral, as well as our life covers and policies.’ The partner’s business plan and its clear indication of viability completed the equation.Angula went on to describe the process of establishing the business and the challenges. The business was supposed to open in July 2011 but due to delays in fitting the shop, the business could only open in September 2011, and they found themselves paying two months occupational rent without an income stream. He also mentioned that reliable sources of supply are an ongoing concern.’Since January, the store has been taking care of itself, so while we’re not making a profit yet, we are breaking even, allowing 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 said. As 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 that the only reason why the business came to be was because of their belief that it would work. Advising other would-be entrepreneurs, he said: ‘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, to establish franchises in other centres, and to begin a DJ Academy, which will work hand-in-hand with the music branding and attraction of the business. ‘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.Commenting on the opportunity, DBN head of lending, Martin Inkumbi said: ‘The DBN 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. 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.’