Guys, I am evaluating some business proposal and am wondering - How much you would pay to acquire a struggling M-PESA business with the following profile

Branch 1
Commissions Monthly Revenue Ksh 10,000
Operational Monthly Expenses Ksh 9,000
Average Transactions per Day 25
Situated in low traffic Lower Eastern(Kibwezi)

Branch 2
Commissions Monthly Revenue Ksh 17,000
Operational Monthly Expenses Ksh 15,000
Average Transactions per Day 45
Situated in medium traffic area in Nairobi

Branch 3
Not operational - supposed to be situated in medium traffic lower eastern (in the interior)

Net Assets Value = Sh 130,000

Am particularly unable to put a finger on valuation for goodwill being demanded

@bartum They have the store management tills. The goodwillis what the seller is putting me on hold about. I am wondering how much would be acceptable over and above the Net Value of Assets considering goodwill is a rather elusive asset to cost.

@mukiha, good point. A wise old teacher, when he let his mind wander, spoke thus: "Always find a niche and you have your business"

So in this case, where is the niche? (*even before goodwill)
And with that number of transactions, aren't barriers of entry low for potential competitors?
If the guy is a subdealer with no direct relationship with Safaricom, then goodwill should only cover the offices, or not?


But if you could get another play (property office, cyberbureau etc.) and the MPesa is side business, then many possibilities...

Hi guys am interested in buying an mpesa business or franchising one outlet from adealer who has not utilized all the three branches in Nairobi. any one with information please do advice.

Before you make the decision whether to buy or not to buy please get an understanding of how the MPesa system works.

From your postings you have limited knowledge of the MPesa business, please get familiar then you will be in a better position to analyse the opportunity.

Peculiar Kenyans skewed the model and have got mpesa working in ways that even safaricom had never imagined.

Regards

@robertyawe thanks for the frank observation. I thought I had earned substantial understanding of how the M-PESA system works - at the agent level. Am curious - what particular misunderstanding is evident on my postings? I am keen to enrich my understanding as I analyse the prospects and you could help me by pin pointing the specific knowledge gaps you have observed.