By Bolatito Adebayo
Olabode Ogundimu, is an hotelier, entrepreneur and motivation speaker. He’s the managing director of Upright Hotel, Abeokuta. He shared with us in this interview, how he has been able to run the business successfully, his challenges and more.
How did you start your business?
The business was established by my dad, so after a while I took over.The hotel was incorporated about 8 years ago and was a small business then. I joined the business about 6 years ago and I can say with all confidence that the business has grown at least five times the initial size.I took it up from where my dad stopped to the next level.
Are you the one managing it solely now?
Yes, I am the one managing it without any interference from my dad.
What are your challenges in the business?
The number one challenge of every hotelier is unsteady electricity supply.You know when you are running an hotel business and power supply is unsteady, how do you survive? Even if you have the best of rooms, a clean environment and best of staff but unsteady electricity, how can you run the business successfully? So, my number one challenge is unsteady electricity. You know what the present economic situation is like too.When you have to buy diesel for N200 per liter, everything is expensive now right?And there is a limit to how much you can charge your guests.The number two problem is the orientation of many youths these days, many of them don’t really know what they want.It’s really challenging managing youths of nowadays, you see, the older ones are a lot better.
The get- rich-quick syndrome is their worst undoing, so it has not been easy managing some staff, most especially the young ones among them. Number three is multiple taxation and that is another big issue now .I am sure you are aware that Ogun State government has introduced consumption tax. We already remit 5% of our earnings to Federal Government as VAT and we still have to remit another 5% of our earnings to Ogun State government as consumption tax.That’s apart from income tax and regardless of whether or not we make profit. The business environment is not very friendly, I must say. The hotelier’s association in Ogun State has taken government to court now, because even 5% tax is not convenient. So, when you add another 5% and bearing in mind that you have to pay salaries, maintain the facilities i.e generate power, fix the road, generate water and security, you can see it’s very challenging.
How have you been able to standout and survive despite the aforementioned unfriendly business environment?
Well, I will like to appreciate my team which has been very supportive, because with competition all around us, we have been able to stand out. Our customer service too is so different from all others and our premises is superb.Our customer service is one of a kind and superb. We have been able to sustain healthy inflow of guests, so, basically we are doing well. Also because of the economic crisis, like every other business, we have been able to cut down all excesses on our side and we have been able to maintain the standard as well. For instance, there are some things we called in artisans to do for us but which we now do ourselves mostly.
Also, we are thinking of looking inwards to trim the number of staff too. Moreover, taking a look at the stocks too, we have decided to partner with our suppliers rather than going to buy in bits . Concerning diesel for instance, we no longer buy from just anywhere, because when we do, sometimes it can be more expensive and problematic, so we now have a supplier.
Did you ever look for jobs?
Yes, I did and if I elaborate, we will spend the whole day here.
Did you ever work for somebody?
After my first degree, I went for my masters in the UK and I got job offers in UK. Thrice I got a job there but because I’m not a British citizen, I wasn’t allowed to work. Later, I returned to Nigeria and worked at Shell Petroleum Development Company for a few months, I was to move to other operations but the truth is, I wasn’t so into what I was doing there. After that, I got another offer but the bottom line was I wasn’t fulfilled.
How did your dad finally convince you to work for him?
The hotel was incorporated so that everyone one of us could benefit from it. My dad identified a need when he traveled frequently to Abeoukuta then. He was always saddled with the problem of lodging in a good hotel in Abeokuta back then. It was just a need that he felt he needed to satiate and he didn’t really have time to run it himself. I personally started out doing business on my own before he told me to join him. I was an importer and to tell you the truth that was good. The return on my investment was good and he knew about it. I guess that was why he wanted me to come join him in his business .I told him I wanted to get married and stay-put in the UK but my parents were able to talk me out of that and so far so good.
How profitable is your hotel business?
I will say, if you know what you are doing and if you can balance every equation of the business you might make profit. But if not, you might be there hanging. You know I mentioned that we have so many challenges earlier, but to be sincere, security is not one of it. The Ogun State government is doing a very good job with security and now we can go to bed with our two eyes closed, but we still have to deal with other issues. It is a profitable business, but if you are not careful and if you surround yourself with the wrong set of people, they can rip you off.
You need to monitor every detail in the business, from the kitchen, to the laundry, to the front desk.
How have you been able to handle competition?
We try to build a relationship with our customers and cultivate their loyalty through our members of staff who are well motivated.
How much do I need to do this business?
Where you want to set up determines what you will plough in. If you want an Oriental Hotel for instance, you will need a huge amount of money. So, there are a lot of factors that will have to go into it. Location is factor number one, because the location will determine the value of the property. Number two, how many rooms do you want to start with? One thing I do advise is that you should start small.
You know it is not about the size but the value you creat. We started small, we started with 15 rooms and at that point there was no standard restaurant but it was just like a guest house. However, we had a dream and we knew what we wanted clearly.
The total cost of construction at that time could have probably been between N10million and N15 million eight years ago but right now it could be more. There are people who have 10-bedroom bungalows, they started small and they added value to what they are doing. I will advise you to start small but as you make more profit, you can begin to expand.
How old were you when you made your first million?
That would be when I was in my late twenties, let me say at age 28 or 29 then. The thousands rolled in for a very long time. (Laughs).