How Sam Otada inherited and grew the family business

Tuesday September 17 2013

How Sam Otada inherited and the grew family business

Mr Otada during the interview. Photo by Rachel Mabala. 

By Charles Mwanguhya Mpagi

One of the most elusive business genes among Africans is widely believed to be building and sustaining family business for generations.

It has been described as the Achilles heel of businesses of black people founded enterprises across the globe. The cycle runs like this; a man (or woman in rare occasions) is born into poverty, he struggles and founds a business that he single handedly drives to some level of success then when he dies, depending on how much he had succeeded in growing the business, the family attempts to run it as they enjoy his sweat. But usually by the end of the second generation, the business begins crumbing or has, as is sadly famously said, “the wealth follows its owner,” in the grave.

It is, therefore, a kind of a novelty to find an heir who has not only maintained a business they inherited following the demise of its founder but has also grown its profitability, diversified and created a kind of empire. This story symbolises what was once known as the Otada Bus Company.

The current Kibanda County MP (Independent) Sam Owor Amooti Otada, had hardly walked out of university in 1998 at only 28 years when fate thrust him onto the control levers of what was one of the country’s biggest transport businesses.

“In fact, the party we were preparing for my graduation; the tents, the food and everything in Kiryandongo turned into the funeral facilities we used,” says Mr Otada.

The office label panel on the first floor of Social Security House (former Udyam House) just a few meters from Parliament (Otada’s political workplace), proudly announces Otada Group of Companies.

The office, though small, is immaculately furnished with comfy black leather chairs for his visitors. A Sun aquarium with different types of exotic fish graces one corner, a small book shelf holding books and business files occupies the other part of the wall while the chairman and chief executive of the group occupies a black leather swivel chair behind an imposing leather padded mahogany desk.

His phone rings constantly and out of courtesy to us for the interview he keeps turning off callers, occasionally picking those he thinks are more urgent.

Unlike many who mourn eternally the passage of their father and mentor, Otada celebrates the life of a man who entrusted him not only with a multi-million business at a tender age of 28 but also put the burden of driving forward a family business with its attendant challenges.

Today, what was once a single business has grown into four independently successful entities grossing an annual turnover of about Shs78 billion ($30 million).

This turnover is spread over the Otada Transport Company, Otada Construction and Civil Works, Otada Holdings (which runs the MTN franchise in Lango and Karamoja regions) and Otada Foundation which is the company’s real estate investment arm.

“Otada buses was the foundation, the business that my father and mother started as purely family owned until 1999 when my father passed away and I took over, we had about 30 buses,” he says.

The bus company with Otada Buses as the flagship company was later to be leaned to only eleven buses especially as competition increased and profitability reduced though the family has now made a decision to re-invest and expand it. Mr Otada says the decision is driven purely by its business feasibility.

The Otada Construction and Civil works is among other things into building roads and until recently was running the only waste landfill in east and central Africa in partnership with Kampala Capital City Authority at Kitezi.

Otada Holdings which runs the MTN franchise is the “cash cow” according to Mr Otada as it is responsible for at least half of the group’s annual revenues.

While Otada Foundation builds homes for sale and rent, Otada says the company is a part fulfillment of his father’s wishes and he says his attitude to it is modeled on that need.

He says taking over business at 28 was a tough call but he credits his father for mainly two key qualities - involving him early in business and exposing him to money at a young age while ensuring he did not get carried away. He also credits his father for leaving behind a Will that ensured there were no fights over who would have the overall authority on the family estate and business.

Otada was the youngest male child of the late Otada. His mother, a business partner with his father continued to play a part in the business after her husband’s demise but has since retired to a comfortable village life back in Kiryandongo.

Other family members and the family business
Apart from his late father and his mother, Otada says he was lucky that despite being young, his elder siblings respected their father’s choice of him as heir and they supported him. But he says he has found the biggest strength in his wife, Esther Otada Owor who is not just a spouse but a business partner.

“My wife is my strength, she runs the MTN franchise,” but he adds the business is “run purely as a business.” He says his wife owns her own shares in the franchise and at the end of the year she gets her own dividend which is her money and she does as she wishes with it.”

“The only thing we can do is say, if we want to invest in something, she says I have my money here and I also say I have my money, then we decide how to invest,” Otada says.

One of the brothers branched out of the family and chose to invest independently in a school, “we supported him as a family but he went independent,” Otada notes. A sister, Ms Victoria Asiimwe spent years working with Uganda Revenue Authority before “bring all her experience and expertise” back to the family business, she now runs Otada Transporters (the Bus Company).

Unlike many businessmen, Otada has to juggle politics as well. He took a plunge into politics three years after taking over the business in a move he says was a fulfillment of a desire by his father. “I did it for him, he encouraged me to join politics so when I stood for Parliament in 2001, it was to fulfill a desire that my father held.”

He has been re-elected for the same Kibanda County seat for the last three elections, Prosper understands that although he had considered retiring to concentrate on politics, he might seek re-election in 2016.

Otada says he does not mix politics with business and his simple magic is not to make promises he cannot keep and making it clear to constituents that politics is separate from his business.

“You have to manage the expectations of the people and you do not promise people what you cannot offer,” he says.

To beat stress Otada maintains a healthy and regular workout regime hitting the gym three times every week and working out for between an hour and one and half each session.

A father of two boys and a girl, Otada has what he calls family and “me” time. Family time is to talk and play and be with the family, and “me” time is for myself and “the boys.”

Otada says managing a family business requires a high level of honesty, operating an open door policy coupled with the ability to take risks. When family members are appointed to management positions in a family business, they become employees and should know the demands on their shoulders as that. They earn a salary like any other staff and have set targets.

When other people are employed, Otada says they should be given sufficient powers to make decisions and once they make the right decisions they share in the glory but they should also be allowed to make mistakes and should not be condemned for them.