Alutia makes millions from hardware business

Wednesday March 7 2018

Samuel Alutia

Mr Samuel Alutia in his hardware shop in Bukedea Town Council. PHOTOS BY ERONIE KAMUKAMA 

By Eronie Kamukama

Most people aged 50 and still eligible to work a few more years at their place of employment, are more likely to stick to their job position for reasons including a monthly salary, allowances or even for the status associated with having a job.

But not Mr Samuel Alutia, a Kumi district resident. After working in the counselling department and with a few more years of active service, he should have retired in 2021 but chose early retirement after The Aids Support Organisation (TASO) carried out a job restructuring process that affected him.

With a donor driven condition to downsize staff numbers, the organisation hired a consultant who, after an organisational assessment recommended merging and scrapping off some job positions.

“I was asked to take a lower position and I said I cannot,” he says. He could barely swallow the feeling of earning less than Shs1.5m he received every month. “I said, I rather get my benefits and start up something,” Mr Alutia remembers.

In 2014, he left a neat office, rotating chair, a desktop and walked into a hardware business, a job not very clean for a man who had worked this formal job for 10 years in Soroti Town.
“The neatness was no longer there,” he says.

At 53 years, he applied for his National Social Security Fund (NSSF) benefits at Soroti branch.
“It took me two weeks to get my NSSF benefits. 12 days later, I got a tune of Shs39m.”
However, for the fear of the unknown, he delayed plans to invest the money.

“Supposing I invest this money and then the business collapses, what will be my future?” he wondered. During his active work days, he envisioned running a bookshop after retirement but that idea varnished as soon as he got his benefits.

He also looked into his friends’ hardware businesses in Kumi Town and was simply motivated.
Besides this inspiration, he knew hardware materials are durable and the temptation to pick an item for personal consumption was very slim.
While pondering on all this for one and a half years, he used part of the Shs39m to pay school fees and cater for other domestic needs.
“When I came to open this business, I had Shs26m out of the Shs39m,” he says. Because of his fears, he invested Shs20m out of the Shs26m. To ease his movements, he bought a new motorcycle at Shs4m and kept Shs2m on his bank account.

Mr Alutia, now 56 years old, owns and runs a hardware business that sells cement, iron sheets, paints, nails, electronics and spare parts for milling maize and millet, in Bukedea town council.
He employs four people including his two children.

From looking into the businesses of his friends, it was easier to gape at the gains they had made for themselves. But executing an actual business was the hardest part.
“In the first days it was very hard. Winning customers was not easy but what promoted me was social capital as I am well known in this place. I also had to run radio adverts and it has helped, my client turnover is very high,” he says.

Customers have not been particularly honest with payments.
“There are customers who get used to you, they buy and pay in cash and later begin asking for goods on credit to be paid in one or two weeks and then they take long to pay back. Others disappear and you have to follow them up,” he says.

Mr Alutia says in January 2016, after realising some profits, he started making savings in the bank and by December 2016, he had Shs79m in the bank, out of the initial investment of Shs20m.

To boost his business, he bought a FUSO truck, which is today generating income through transporting customers’ goods. From the same proceeds, he bought two plots of land in 2016.

He also constructed a residential house in Bukedea, renovated his village house and installed solar power with profits from the business.

Benefiting from his savings
Mr Samuel Alutia has realised that his current shop is inadequate on space and now intends to put up a warehouse along the Bukedea highway in the next five years.
This will enable him to save the money he spends on rent and he can stock goods worth Shs100m and more. If not for space challenges, he would be stocking over 3,000 bags of cement instead of the 600 bags today.
Despite this, his venture is paying off.
“The business is worth over Shs200m in assets and investments, he says. The highest amount of returns he has ever taken to a bank is Shs9.5m in November last year. Other months he takes between Shs5m to Shs6m a month.

With this figure, Mr Alutia admits he could not be happier and he believes saving should be a priority for everyone. His bank account was only a conduit for money to spend so he was hardly saving on his own.
“To those that are eligible to save with NSSF, they should not have any reservations. It is good to save such that in old age, you have a fallback position where you can live a comfortable life. If I had not saved with NSSF, I do not know how life would be because from the investments I have made, for instance paying school fees is not a challenge, I do not have to get a loan from the bank,” he says.