Business owners’ chosen difficult route pays off
What drives some entrepreneurs to take a more difficult path than others in their industry? It is certainly not only the promise of profits. In the case of Dr Wahome Karanja, an ear nose and throat specialist and medical entrepreneur from Kenya, Nairobi, it was the desire to build something of his own that will outlast his career. “A medical practice usually disappears once the clinician moves on,” says Dr Karanja. “I wanted something more than that.”
So when Dr Karanja and his co-founder, Dr Gakuo Karuga, were contemplating their careers towards the end of their studies, they committed to a plan of starting their own group practice that could scale into something much bigger, and in which they could embed their values of holistic, continuous medical care.
As highly skilled specialists, the two co-founders could easily have spent their careers in the Kenyan public service, one of the medical schools, or, like most of their fellow specialists, half their time at a public hospital and the other half as private practitioners.
Yet they took the unusual path of stepping out of the public service altogether, and have built a unique group practice focused on the underserviced city centre of Nairobi.
Dr Karanja and Dr Karuga started out with their group practice in the usual fashion in 2013, setting up shop in the medical hub of Upper Hill in Nairobi where the surrounding clinics, hospitals and primary care practices referred patients to their ear nose and throat (ENT) practice, called Prodigy ENT and Hearing Clinic.
They were not the first private ENT practice in Kenya. At the time, there were two others that pioneered the way, but Dr Karanja said they were able to bring the latest hearing-assessment technology and hearing aids into the industry when they started.
But it was their next move that put them on the difficult path of exploring uncharted territory. As specialists, they were heavily reliant on referrals from other medical institutions. Was there a way for them to find patients directly in the community, while at the same time offering much-needed general medical care in an unserved area?
They decided that their own private diagnostic centre and primary care clinic for the underserved population of Nairobi could do just that and the idea of a medical one-stop shop based at Nairobi’s busiest transport hub took shape. A range of much-needed primary care services would be offered, including dental work, optometrist services, a medical laboratory and a pharmacy.
At the same time the two doctors also identified a gap in the market for scanning and imaging services, which became part of their centre. They invested in a CT Scanner, X-ray and Ultrasound; no other CT Scan existed within the CBD.As soon as they started planning the new centre, they realised that their existing practice would not be able to finance the expansion, especially acquiring expensive scanning facilities, and they embarked on a search for finance.
They were well advanced in their negotiations with two major banks when they also made contact with the business risk financier Business Partners International.
“We realised that they had a completely different approach. With the banks it’s: ‘Here is the loan, here are the terms and off you go’. But Business Partners International is truly interested in making sure your business succeeds,” says Dr Karanja.
Part of the deal that Business Partners International offered was to put in place certain performance benchmarks against which the success and viability of the new venture could be measured.
Flexibility was another feature of Business Partners International’s finance that worked well for the new venture. The opening of the centre was planned for 2016, but because of the disruptions around the election held that year, the doors opened only in September 2017, and the numbers of patients fell below projections.
Dr Karanja and Dr Karuga were able to renegotiate the repayment terms with Business Partners International.
Today, the clinic is showing signs of thriving with no fewer than 25 staff members, including dental practitioners, an audiologist, pharmacist, laboratory technologists, general and specialist doctors, optometrist, radiographers and radiologists. A further ten medical professionals work on a part-time basis at the centre, and a range of specialists are associated with the practice, including a gynaecologist and paediatrician.
Given the pressures of running the ENT practice in Upper Hill as well as pioneering the new centre in Nairobi CBD, Dr Karanja had to finally stop his work in the public hospitals. Although it was a difficult decision, he knows he can fulfil his public service mission better through their new private clinic, right there where ordinary Kenyans need it most.