Femi Otedola is the second Nigerian after Alhaji Aliko Dangote to grace the Forbes list of the wealthiest people.
This article examines his life to tell you how he made his money. Perhaps, you might be able to follow in his footsteps and make yours.
Femi Otedola’s life holds several business lessons and more for us as entrepreneurs. His journey through challenging Nigeria’s business terrain, his failures and his eventual return to fame leaves most Nigerian entrepreneurs in awe. I believe you are likely aware of some of these stories.
“Otedola with the money”, as he is fondly called, has a Twitter handle of Ote$. He is the father to the famous pink-haired DJ Cuppy, a philanthropist and an amiable person.
I believe that many that would come to read this post would do so for one thing only – to find answers to the question that many before them have asked – How Did Femi Otedola Make His Money?
Before I give you an answer to that question, however, I would love to tell you about one of his many past mishaps in business. Perhaps, by analysing his past, you may have learned how he became the billionaire that he is today.
In examining the past, we can find life lessons. In any case, Otedola’s life unravels vital lessons for every entrepreneur – Being an entrepreneur doesn’t necessarily make you a good business manager; like Otedola, learn you must, either in a classroom or by sheer experience.
Contents
Background
Otedola was born on the 4th of November 1962 in Ibadan, the capital of Oyo State, southwest Nigeria, into the family of the late Sir Michael Otedola, Governor of Lagos State, from 1992 to 1993.
To be well suited to taking on the family business, Femi Otedola bagged a Diploma in Printing Technology in 1985 at the London College of Printing.
After a decade of managerial experience at the printing press, Femi sought to solve one of the many challenges of his father’s printing press. He wanted to make diesel readily available to the printing press, and so, he started his own trading company. One could say destiny called him at that point, as Femi, in his bid to make diesel available to his father’s company, ventured into what would make him the man he is today – An oil mogul.
Though Femi has his hands in many business ventures, what truly made him the billionaire he is today started in 1999. In 1999, the company with which he would achieve dominance in the Oil industry, Zenon, was incorporated.
1. Seek Problems that You could Find Solutions For
It is almost impossible to talk about Femi’s rise to success without a brief history of his background in politics and the access it granted him later in his entrepreneurial journey.
Femi Otedola’s dad was Micheal Otedola, a one-time governor of Lagos.
Femi had talked his father into pursuing a political career; a risk that almost wrecked the family’s business. It took the help of Aliko Dangote and Mike Adenuga to help fund Michael Otedola’s political campaign.
In 1992, Michael became the governor of Lagos state, but his tenure was cut short by the Abacha’s regime. Michael would return to his career as a writer and consultant with positions on the boards of various businesses. Meanwhile, Femi Otedola was now in charge of the marketing arm for his father’s printing press.
The printing press primarily relied on diesel generators due to the inadequate electricity supply in the country.
At first, getting diesel was not a problem; the family had a few connections within the government. But when the political climate changed, the regular and very affordable supply of diesel stopped. Femi resorted to buying diesel from retailers.
Business went well until one weekend when Femi made a more than usual order and opted to pay with a cheque, but his retailer refused the cheque.
This incident led Femi to start his diesel supply business by creating a better and efficient network for diesel supply.
So an otherwise disappointing venture would launch Femi Otedola into becoming Nigeria’s second richest man listed on Forbes.
2. Be Courageous and Relentless
Femi Otedola is one courageous and relentless businessman. Motivated by the disappointing events, he made a daring offer to buy a diesel depo for $20 million.
The depot was at that time worth $4 million. And at the time he made the proposed $20 million offer, Femi did not have such an amount. However, one thing that he had going for him was his courage and understanding of the use of his network.
3. Get Help When Needed
To source the money he needed to buy the oil depo, he went to Zenith bank and sold his idea. Jim Ovia loved it and agreed to fund him, and that was the beginning of Zenon Petroleum and Gas Limited.
Recommended: Sources of Funding for Small Business Owners
Femi’s family connection gave him access to influential people, and as a result of this connection. The business was hugely profitable.
Zenon customers consisted of banks and huge multinationals whom all needed diesel to run their generators. It was only a short while before Zexon gained control of most of the diesel supply infrastructure in Nigeria.
4. Expand Your Operations To Attract More Prospects
Soon, Femi discovered some challenges in his supply chain. There were significant lapses within the land transportation and shipping network involved in diesel supply, so he created F.O transport and Seaforce shipping to help move his products, both on land and in water.
Setting up F.O. Transport and Seaforce helped him save costs on transporting diesel. In a few years, Zenon competed with other oil companies in Nigeria.
The success of Zenon served as a motivating factor for Femi to diversify into other lines of business.
5. Learn Fast and Keep Moving
Life is either a daring adventure or nothing at all:– Helen Keller, The Open Door.
In 2008, disaster loomed, Femi was to have an experience that would define him in business. With diesel worth $400 million on the high sea, all it took was a tip in oil prices from $146 per barrel to an unbelievable $36. The government of Nigeria further devalued the Naira, and Femi’s business faced a shipwreck.
If Zenon were the titanic, the managers were ship-hands too distracted to see the ship sailing toward an avoidable iceberg. Like the Titanic, the real tragedy wasn’t the iceberg, but aboard the ship, an ill-fated love affair brewed.
Don’t get lost in this story; Jim Ovia and Segun Agbaje are the fated lovers in terms of huge loans they’d signed off to Femi from Zenith and Guarantee Trust Bank, respectively.
Just like the Titanic, Zenon would sink as its assets were sold off to clear the debts. Unlike the Titanic, this captain would survive the horrible market crash of 2008.
Was it an easy fit? No.
Femi contemplated suicide, but in the end, he sold off his shares in different companies to pay off his debts. It was a long and dark moment in the oil mogul’s history.
With a controlling share in AP, Femi wanted something new. With his debt cleared off, he turns his focus to AP instead of reviving Zenon. He completely restructured the company by changing its name to Forte oil as well as hiring a crop of young experts to manage the business.
In his own words – “Being a good entrepreneur does not necessarily make you a good business manager. I learned to keep my hands off managing and leave it in the hands of experts”.
This strategy seemed to work against all odds, and Forte oil share price increased yearly. It was in this season that Femi would be profiled on Forbes as the 16th richest man in Africa in 2015.
Lessons for Entrepreneurs
- Opportunities. God speaks to us in opportunities. Our destiny unravels as we diligently travel down this path. If a chance leads you to a wall of debt, remember the next lesson.
- Tipping points. Tipping points always bring about significant changes. Read more about the Tipping point in Malcolm Gladwell’s book The Tipping Point. Rock bottom offers one thing; a platform to propel you upward.
- The beauty of growth. Growth is beautiful in retrospect but the agonising moments that shape an entrepreneur isn’t always lined with roses. It’s never lined with roses.
READ MORE: Top Ten Richest People in Nigeria in 2020 and What You Can Learn from Them
Conclusion
Every successful business person has a story for young entrepreneurs. These stories aren’t told to excite but to enlighten you on your journey to success.
