Retail entrepreneur on leaving the family business to venture out on his own

Trushar Khetia, founder and CEO of Society Stores

Trushar Khetia, founder and CEO of Society Stores

While studying in the UK, Kenyan entrepreneur Trushar Khetia saw how various brands advertised their products on buses, catching the attention of thousands of people.

Three years ago, he started his own business, Tria Group, and convinced bus owners in the capital Nairobi to allow him to sell advertising space on their vehicles. Companies that have thus far advertised on the buses include: KFC, Unilever, Coca-Cola, Steers, Reckitt Benckiser and Airtel.

When his advertising business took off, Khetia used the money he was making to buy a 1,700m2 supermarket in Thika, a town situated about 45km outside the capital Nairobi. And with that he established his second business, Society Stores, which now operates four supermarkets and is set to open two more later this year.

Khetia says he has always been passionate about the retail business. He jokes about having been born in a supermarket. As a young boy, he recalls doing his homework on the counters of the family’s retail shops.

His grandfather – a Hindu priest who emigrated from India to Kenya shortly after the country gained independence – founded a small shop in 1982 that has since morphed into Khetia Supermarkets, a big player in the retail business in western Kenya.

But before starting his own venture Trushar Khetia initially tried his hand in the family business, only to quit after two years because he felt “stifled”. Describing himself as impatient, stubborn and one who likes to get his way, he felt unfulfilled having to work under his older relatives.

“If I had stuck around it would have probably taken 10 to 15 years to be officially made a director and a shareholder. And I was thinking, do I want to be 40 when I am recognised for what I do?”

“I think I am very stubborn. I like to get my way around things… [and] they kept telling me ‘no’. For example, we at Khetia Supermarkets had the first chance to buy out Ukwala (a mid-tier supermarkets chain) and I was leading the negotiations. The deal was on the table and I really wanted it to happen because, overnight, we would have gone from about five stores to having about 12 to 13 stores… but it wasn’t backed by the board and the deal fell through.”

Last June, Botswana-based retail chain Choppies announced it had struck a deal to buy 10 stores of Ukwala for about US$10m. But in December the high court stopped the sale because of a Ksh.946m (about $9.2m) tax dispute between the Ukwala and Kenya’s taxman. Ukwala has since challenged the decision.

It was not easy leaving the family empire to venture out on his own. But looking back, Khetia says he has no regrets.

“I have done well in taking the right opportunities at the right time,” he notes.

A ‘smart’ deal

Although he did not have enough money when planning to go into retail, Khetia managed to convince the owners of the first supermarket he bought to give him control of the store in exchange for half the sale price.

“It is one of the smartest deals I have ever done. The worth of the buyout, excluding stock, was about Ksh.25m ($244,000). I only had 50% of that. So I negotiated a deal that allowed me to pay the owners just half of what was required and spread the remaining amount over a couple of months. I put in just enough money to get the keys to the shop.

“I started using cash flows from the business to pay them back and within six months I had fully paid off the debt,” says Khetia. “I learnt from that deal. In the next two acquisitions that followed, I paid the very minimum to take control of the shops.”

Over the next 10 years Khetia wants to grow Society Stores to have 100 outlets. But in 2016 he will mostly focus on consolidation.

“We have expanded so quickly and along the way made some mistakes. We have hired the wrong people, and worked with the wrong suppliers whose sole intent was to hurt our business.”

Downsides of going it alone

Khetia might have disliked working in a business with his family, but admits there are downsides to doing it alone.

“It is not always easy when you are alone. Other people can’t understand you and they think you are crazy. You also make quite some sacrifices. Last year my wife and I separated. Last year was great on the business side, but the long hours and frequent travels strained my marriage.

“Entrepreneurship does take a toll on your social life. You are always focused on the business, thinking about work, even when you’ve taken time off to unwind.”

The young entrepreneur advises others to practise the five Ps of success: passion, purpose, perseverance, plan and people.

“You need to be passionate about what you are doing. Then you need to have a purpose – for me it’s building a legacy and having a positive influence in society. Then you need perseverance to stick through the tough times; a plan to get you where you want to go; and good people to walk with you,” says Khetia.

“These five Ps unlock the sixth P, which is profits.”