[su_note note_color="#ffffff" text_color="#050a45" radius="0"]This story is made possible in part by our friends at IDLC Finance Limited. IDLC helps SME entrepreneurs to focus on their business and grow by ensuring smooth financing and other supports. Learn more about IDLC SME Loan here.[/su_note]
Mahbub Hossain, the founder and CEO of Vip Door and Furniture, has built a successful company from scratch. He started his career at the bottom as a door-to-door marketer for Brother’s Furniture at a basic salary of TK 2,500 but Mahbub has managed to push himself up. He worked hard and pursued the same person everyday until that person bought his doors and became his regular customer. Today his company VIP Doors and Furnitures sells TK 20 million worth of door and furniture a month and Mahbub has bigger plans yet.
Speaking to Mahbub is a pure joy. Listening to his story and early days is incredibly revitalizing. Mahbub started at the bottom, selling full loft bed packages, where people seldom get the chance of taking a risk, and through sheer hard work and perseverance he eventually worked his way up. This whole journey is an incredible tale. In association with IDLC Finance Limited, we bring you Mahbub’s story. We hope Mahbub’s story will inspire you and make you reflect on your life so far and choose life over mere living.
Take us to the beginning of your journey.
I was born and brought up in Barishal. My mother was a very meticulous person. My brothers and I had a quite disciplined and strict upbringing. I passed my SSC in 1992 and came to Dhaka that same year. When I came to Dhaka, I found myself in an abundant state of freedom.
No one was there to watch over and discipline me. I started to bunk classes and study less. Consequently, I didn't do well in the final exam. My parents wanted me to be a doctor. But my grades were too low to sit for the medical college admission test. I personally wanted to get into BUET but that too did not happen due to my poor result.
Nevertheless, I sat for several university admission tests only to get disappointed. Eventually, I got into (Degree Pass Course) and passed in 1996. I was very curious, loved reading and developed a habit of frequenting public libraries and seminars in those days.
After graduation things became complicated. My family started to pressure me to get a job, formally ending my vagabond life. So, I began to look for a job, any and every kind of it.
My job was door-to-door marketing. I used to have a satchel in which there were a few wood samples, a calculator and a product catalog and visit potential customers at homes and show our products. I covered the entire Rampura and Banasree neighborhood. After a couple months I became so familiar that everyone would recognize me and knew that this bearded, toupee-on-the-head guy, had doors to sell.
That's when I found a job circular for a position of salesman at Brother's Furniture under the title marketing manager. I applied for the position and got it.
The first month at my new job started with a training. I was a Mawlana back then, as I’m now, and used to wear Panjabi and pajama. It might be because of my appearance, no one paid much attention to me at first. What usually happens is that if you come from a well-off family, you wear good clothes and look sharper which helps in social settings but, unfortunately, I didn't have that. My clothes didn't look expensive whereas everyone else was all suited up and appeared smarter. I often felt left out. Despite the setbacks, I managed to stick to it till the end.
My job was door-to-door marketing. I used to have a satchel in which there were a few wood samples, a calculator, and a product catalog and visit potential customers at homes and show our products. I covered the entire Rampura and Banasree neighborhood. After a couple months, I became so familiar that everyone would recognize me and knew that this bearded, toupee-on-the-head guy, had doors to sell.
It was a tough job, both physically and psychologically exhausting. People were reluctant to place orders. Some would shelve for days. But I did not relent, I did not take no for an answer. I frequented them so often that some customers would feel awkward for not placing an order. After a lot of hard work, I finally received an order at Tipu Sultan Road. It was a fairly big order. And it made my job permanent.
My family wasn't happy with all this. My father was dissatisfied and used to complain about the nature of my job.
My salary at that time was BDT 2,500, but with the sales commissions, I used to earn around BDT 30,000 per month. This made a few people in the company unhappy because I was earning more than many senior people. They began to find problems where there was none and intentionally put off my requests for logistics.
Long story short, I left the job on the 13th month over a dispute with the owner of the company. I became very frustrated over the matter and got depressed, but one of my elder brothers helped me to get over my depression and encouraged me to get into the business.
That’s how after leaving Brother's Furniture, my journey into business started. Then I went to a person I knew from earlier days, an ex-principal of Mymensingh Polytechnic Institute, who had a good knowledge of wood works. He took me to a wood factory in Chittagong where he was a partner and proposed that I should get furniture supplies from them and sell it on my own in Dhaka. I agreed to his proposal thinking that it would be a good business as I already had a fairly large customer base.
I started retailing wooden furniture from that factory in Chittagong to Dhaka in 1998. In order to get orders, I used to help my customers designing interiors like building wooden cabinets, beds, tables and the like. I used my home as my office. My first customer was an officer of Agrani Bank. I did his interiors.
That venture was quite profitable given that the costs were very nominal. Then, in 2000, I rented a showroom at Khilgaon along with two new partners. After some time, our supplier started to delay with the orders. The order that supposed to come today was late by several days, and sometimes even weeks. That’s when we were compelled to set up our own factory.
We didn't have funds to purchase machinery. So, we rented a production facility and 3 machines at BDT 5,000 and BDT 7,500 respectively a month.
With our own factory, business flourished. And with the growing profits conflicts among the partners also soared. They implicitly accused me of altering sales records. The situation soon worsened and at a point we had to break the partnership. It was very painful for me and such a sickening experience that I even thought of not doing business ever again in my life.
But eventually, I recovered from that predicament and continued the business partnering with a friend of mine. Meanwhile, the business expanded. We had 2 factories then. After 1 year, we two had a discussion and made a decision to split the company to avoid any future conflicts.
I took the factory at Kuril. That’s how the journey of VIP Doors and Furnitures started. We had around 15 people when we started separately, today we are a team of 120 people in the company.
It was a tough job, both physically and psychologically exhausting. People were reluctant to place orders. Some would shelve for days. But I was relentless, I did not take no for an answer. I frequented them so often that some customers would feel awkward for not placing an order.
Were your family and friends supportive of your decision of starting your own business?
I wouldn't say that they were very confident. My father was about to retire from his job at WAPDA at that time. It was a bit risky to start a business at that time. I could take my father's pension money and use it as capital, but I chose not to.
I managed the capital from my friends--TK 10,000 from this person, 30,000 from that person. I also had some money saved from my previous job at Brother's Furniture.
What are the products you offering now? How do your distribution and marketing work?
We manufacture and sell wooden door and furniture, various types of it. For distribution, we wholesale to retailers and also have our showroom.
We have become quite well-known in this sector, retailers usually come to us. We work hard to maintain a good relationship with the retailers which we have developed over the years.
We have one showroom in Chittagong and another under construction in Dhaka. We wholesale to retailers which is one of our largest distribution channels. These retailers sell our products under their own brand name. We used to supply to individual clients before, particularly, real estate companies, but that market has shrunk in the recent years.
What are the factors that differentiate your products from others in the market?
Durability is one of the key features of our products. The doors and other types of furniture we offer can endure the test of time. We offer after-sales services and product warranties which very few furniture brands do. We maintain thorough transparency with our clients and offer clear product information upfront to our customers.
Tell us about your growth.
The growth rate varies depending on the season. Door sales, for example, rise in the rainy season. And from September to March/April is the peak season for furniture because people get married during this time of the year. On an average, we sell around BDT 20 million worth of furniture a month.
We have become quite well-known in this sector, retailers usually come to us. We work hard to maintain a good relationship with the retailers which we have developed over the years. We have one showroom in Chittagong and another under-construction in Dhaka. We wholesale to retailers which is one of our largest distribution channels.
Tell us about the competition. Is there any foreign competitor in the market?
This is a very competitive industry. That said, unfortunately, a large part of it is unhealthy. There is a kind of price war going on which is bad for the entire industry in the long run.
The furniture industry in Bangladesh is quite a big sector, it is around BDT 2 billion market a month and growing rapidly which means it can accommodate a couple of quite big companies. From that point of view, I seldom worry about competition.
The number of multinational brands is very nominal in this sector given that our local companies have developed rapidly over the last 5-10 years. There were furniture brands from China and Malaysia before but they are no more in the market.
It is partly because of the policy that helps local furniture companies to compete against multinational companies and partly because, as I said, our local companies have done great work in the past couple of years.
[blockquote source="Mahbub Hossain"]Your ability to accept refusal is an incredible power. I maintain a philosophy that whenever I have a product to offer I tell myself that first 99 persons I approach will reject this product and only the 100th person will buy this. Having this kind of mentality helps. Rejections will come but you have to be determined and work hard.[/blockquote]
Business is all about new challenges, tell us about the major challenges you are facing now.
Finding good people is one of the biggest challenges for us.
The nature of the work of a carpenter is very laborious. If a person enters the factory with clean dresses and a fresh face, s/he comes out at the end looking utterly exhausted and messy.
It is hard to maintain the working standards for our workers. The environment in a wood factory is such that you can't help getting affected.
We work hard to maintain a standard working condition. The challenge here is that I wouldn't get any worker if I fail to ensure the minimal factory standards.
Operationally, this business has grown fast and become too big without me realizing it. Although I have control over everything, sometimes I fear that I can't handle it anymore. It's like I still have the spool on my hand but the kite has flown too far away and I can't see its movement anymore. It's intimidating.
Getting energy supply connection is a difficult job in this country. Energy is important for us, and a connection which should take 15 days to 1 month at best to get, takes several months. This is a huge problem and it hampers our productivity.
Going forward, what are the plans?
If everything goes as planned we will shift our production to a 150,000 sq.ft. factory in Kaligonj, our new production facility. It's a huge project. We have already built 3 shades there and we have got machines and all other necessary equipment. If we get the energy supply soon, we are going to move within February next year.
Our goal is to open up 5 showrooms at different locations within 2017. We plan to position ourselves as a wooden furniture brand in the coming years and build one of the enduring companies in this industry.
What drives you?
All along I had this desire to do something that matters. I dream of establishing a factory where there will be hi-tech machinery and skilled labor making marvelous furniture and which will have both backward linkage and forward linkage.
I hope to build a strong brand so that people will think of us whenever they think of wooden products. We have opened a customer satisfaction center at the Chittagong showroom where customers can directly communicate their product experience with us. We have also warned our employees that 5% of their total salary depend on customer satisfaction. Because I believe that if our customers are happy we will grow as a business no matter what.
Choose your passion first if you are to accomplish something in life. Without putting your heart into a matter, you can't really succeed. I have always been passionate about my work and resilient and never backed off from any challenge. I always questioned myself if someone else can do it, why not me?
Operationally, this business has grown fast and become too big without me realizing it. Although I have control over everything, sometimes I fear that I can't handle it any more. It's like I still have the spool on my hand but the kite has flown too far away and I can't see its movement any more. It's intimidating.
You have been in business with IDLC for over 6 years now. How is your experience? What is your advice for other people who want to take SME loan?
To be honest, I have a great working relationship with IDLC. My experience with them has been great throughout these years. They are very cooperative and always supportive. I think before taking a loan you should have a solid plan about how you are going to use the money.
It is not about money alone, but how you use it as well. IDLC is very professional in dealing with us and at times support us with our business as well.
What advice would you give to someone who is just starting out?
It all begins with an extreme level of commitment to your work. Without a deep commitment, no one can do anything meaningful in life.
Your ability to accept refusal is an incredible power. I maintain a philosophy that whenever I have a product to offer I tell myself that first 99 person I approach will reject this product and only the 100th person will buy this. Having this kind of mentality helps. Rejections will come but you have to be determined and work hard.
Once you start growing you should learn to delegate responsibilities. It is very important to fire yourself and grow with the business.
When starting your own business never consider that your friends and relatives would become your clients and champion your products at the beginning, rather they would probably hurt you the most. Never try or rely on people you know as your early customers.
Business acumen is not something you can learn within a short period of time or only with academic education. It grows with experience. Anything worthwhile takes a long time to happen. Have faith and work hard until you achieve that what you wanted to achieve.
I hope to build a strong brand so that people will think of us whenever they think of wooden products. We have opened a customer satisfaction center at the Chittagong showroom where customers can directly communicate their product experience with us.
Interview by Ruhul Kader, Transcription by Rahatil Ashekan, Images By IDLC Finance Limited