In January 2025, Joseph Kairu Wambui alias Khalif Kairo, was charged with defrauding millions from clients over car sales. Kairo is a popular influencer with over 350 thousand followers on Instagram who was also part of a luxury car import company, Imports by Kairo. Kairo’s woes show a cautionary tale that many entrepreneurs should take lessons from. In an Iko Nini podcast episode, Kairo’s former business partner Clement Victor Kinuthia shared the history of their working relationship and the pitfalls entrepreneurs should avoid when going into business with friends.
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According to Clement, Kairo is someone who finds someone with a vision, gloms on to it then jumps ship when he’s gotten what he wants. Such a person is hard to spot from the start. However, there are certain things that are noticeable when the business is operational and steps can be made to avoid reaching financial rock bottom.
1. Selling the image of an individual instead of the company
Throughout the interview, Clement spoke of how their car import business was divvied up between him, another controlling shareholder Ibra, and Kairo. Due to his marketing capacity, Clement let Kairo become the face of the company. In addition, they trademarked their import business under Kairo’s name. Together, they shared a vision of creating a business that has a significant market share in the local luxury car market. Kairo’s flashy lifestyle attracted clients. Using social media to show a lavish lifestyle, led to more viewers wanting to patronize the business. Clement decided it would be a good investment to pay for Kairo’s flashy choices. However, this created an image that was eventually unsustainable. Entrepreneurship: How To Leverage Trends To Grow Your Business
While using luxury as a marketing tool is effective, it’s important to avoid debt to sell aspirational visions. It’s also better to partner with other luxury manufacturers to reduce overheads and create unmanageable expenses.
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2. Overexpansion
According to Clement, Kairo was a reportedly ambitious man with goals of getting into aviation and increasing their client base. After getting a high-end headquarters, the business raked up operational expenses in rent and parking. Combined with the other issues the company was facing, this led to unmanageable overheads.
Entrepreneurs need to consider what’s currently available for operational costs after sales. When tallying what’s left over for operations, business owners must try to work within their means to avoid debt. After paying essential bills and wages, costs like rent shouldn’t be a risk where the business could fall through.
3. Overpromising clients
Another issue Clement raised was Kairo’s reported overpromising to clients. As a marketer, Kairo would oversell what the company could deliver. As a salesperson, it’s important to remember to be honest with clients about what the company can provide. Giving faster delivery times leads to complaints. Having high-roller clients also means having customers who are accustomed to certain standards. Overstating how well you can meet those standards can compromise your business.
4. Ignoring clients
When Clement had to travel for other duties and businesses, Kairo reportedly took it upon himself to deal with the clients. However, they constantly had complaints about delivery issues, service concerns and the cars not being delivered after being paid for. This led to client dissatisfaction and eventually extra costs due to issuing refunds.
When dealing with clients, it’s important to have well-trained customer service that lets the clientele know that every concern they have is being addressed. Ensuring you have a streamlined customer support base will keep your operations up to standard. In addition, it lets clients feel important and creates a manageable relationship with clients already brought in from marketing.
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5. Lack of synergy between workers
Further into the podcast, Clement shared how Kairo reportedly couldn’t get along with another stakeholder, Ibra. They didn’t agree with Kairo’s approach to marketing which involved high costs. However, Clement saw the benefit in having a face of the company which also brought in influencer partnerships that brought in untapped markets for them. However, because Kairo would allegedly ghost clients after promising them cars, this created friction among the business owners. Tips For Naming Your Business And Mistakes To Avoid
In a venture, it’s important to ensure all stakeholders are on the same page. Having animosity between business owners can lead to conflict that spills over into service delivery since everyone can decide to do things their own way. This can lead to one department double booking or never following up costing clients their money. By sorting conflict as soon as it pops up, you retain the health of your business. Don’t let a learning period fester into poor practices.
6. Lack of financial accountability
For the business, one of the mistakes they made was not following up on the accounting. Since Clement trusted Kairo, he’d often approve expenses and events without confirming their legitimacy. According to Clement, this led to his business partner, Ibra, demanding the accounts get frozen to account for where they were haemorrhaging money. However, it was difficult to get a handle on things because while he and Ibra had controlling stakes, Kairo was the face of the brand. The business was also registered in his name and trademark. It made it difficult to sort out the account problems. This also reportedly allowed Kairo to take extravagant trips on the company tab. It brought in more clients through Instagram. When money talks, people listen. However, the luxury trips became unsustainable. Entrepreneurship: Tips To Help You Bootstrap Your Business And Cut Costs
Having measures installed from the beginning to ensure financial accountability is paramount. When crafting the business agreements and operational protocols, find out the best way to disburse necessary funds in a way that’s easy to audit to avoid leakages and overspending on frivolities.
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7. Misuse of company resources
Clement also shared about how, due to how much clout he’d accumulated, Kairo allegedly used company resources to help his friends for free. He would give his friends free car services, repairs, and replacements on the company’s tab. This easily led the company into debt. While Clement stated he had a culture of providing amenities to his staff, such as rent, phones, or laptops, such provisions could only happen in-house.
Having a policy where anyone who used company resources unauthorized has to refund the original pool is one way to ensure people don’t take advantage of their friends. Maintaining integrity is one way to ensure the company doesn’t accrue unnecessary expenses and debts.
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8. Double staffing
Additionally, Clement shared how Kairo was expected to do marketing duties. However, he later stopped reporting to the office. He shared that even after receiving a salary for a lengthy period, Kairo reportedly failed to deliver on his marketing duties. This led to the company having to pay extra for another marketing staff to ensure they still advertised their products and services.
Having policies in place to ensure workers deliver what they were hired for is an important part of any business. When a worker can no longer deliver, have plans in place for their termination, demotion, transfer, or whatever legal measures you can take to ensure they provide what they’re paid for.
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9. Miscommunication
As they approached the final fallout, Clement also shared how Kairo reportedly contacted their bank and said that the cheques were lost. This made any cheques Clement paid out to others bounce. Clement also explains the only reason he was able to find out was because he had a friend who worked at the bank who alerted him to the issue.
The best way to avoid such a pitfall is to have chosen individuals who can liaise with the bank or other operational partners. Having designated employees who can officially communicate with the bank can prevent any miscommunication and reduce the risk of fraud. Having authentication policies with your service providers can also help reduce the risk of sabotage.
10. Mistrust
By the time the partnership was falling apart, Clement found out that Kairo had reportedly been poaching clients. Because of his history as someone who latched on to his vision, he had found someone else to finance his goals through their vision. By partnering with someone else who was running a car import business, he ended up allegedly poaching Clement’s clients. Since he was the face of the company, clients who didn’t know the complaints or legal woes Kairo was facing, ended up supporting his new venture without knowing the risks involved.
Having a communications department can also protect a company and its clients from such liabilities. With well-trained communications staff, clients can remain appraised of any changes to the company, whether other stakeholders are no longer operating in partnership, and why. By investing in such services, you can protect your clients and your company.
Check out:
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