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Matatu Business
mwania
#681 Posted : Monday, January 04, 2016 10:37:28 AM
Rank: Member


Joined: 10/29/2007
Posts: 76
Subaru, I will assume that the Kshs. 8,500 is net after deducting daily fuel expenses. But other expenses like salaries for the driver/ conductor, insurance, management fees, licensing fees, taxes that are due after a few months/ annually are not accounted for.. ama?

subaru
#682 Posted : Monday, January 04, 2016 10:59:03 AM
Rank: Member


Joined: 3/15/2010
Posts: 391
Location: nairobie
mwania wrote:
Subaru, I will assume that the Kshs. 8,500 is net after deducting daily fuel expenses. But other expenses like salaries for the driver/ conductor, insurance, management fees, licensing fees, taxes that are due after a few months/ annually are not accounted for.. ama?



@ mwania the little research i have done with a new 33 8500 utapata na umeibiwa this means u can get more but this money should not be eaten its for running the biz na kulipa loan
matatuman
#683 Posted : Monday, January 04, 2016 11:04:15 AM
Rank: Member


Joined: 12/5/2013
Posts: 224
mwania wrote:
Matatuman, I think it is good to understand that as far as I know, "kuuliza si ujinga". I have read through all the posts severally and none gives you clear answers.. only very rough estimates devoid of full facts about the business: for example, how do we calculate net profits of we do not enumerate all the known expenses? Income tax is part of business and nobody seems to account for it anywhere. Known expenses in my opninion are fuel, maintenance costs, licensing costs, tyre replacement, human resources (Driver, conductor), management fees, miscellaneous (bribery cum extortion, inspection,etc), advance tax (and income tax from the gross profits). If we enumerate the above and share the general gross collections per month, depreciation, then we can decide. Please, share information about the price of a 2008 Diesel Hiace if you have. For now, one can only estimate using the prices advertised on OLX/ and other web sites.. Actual price will be used at the point of purchasing. We are also in other businesses too and can also advise in our respective areas of operation. The need for diversification is the reason we are asking. We are ignorant and therefore are seeking information.

This is a dynamic industry and discussions of 2006 are not necessarily accurate enough.


My apologies if you find me too abbrassive. The facts you are looking for are simply not here. This is not a copy and paste business in that what works on one route may not work on another. I can tell you 2k is the daily net but there are people who consistently make 5k. Junior here has quoted some figures which are realistic but I also happen to know someone with a new 33 seater that gives him 6k. Same guy has a another 33 seater on the Rongai route which gives him 12k.

Fanyeni research yenu tafadhali don't expect answers which are just not there. Ukitaka box import do not buy locally. You can import for about 2.25M. That's a realistic budget for an auto. If you need help importing sema usaidiwe. I can assist, Prime can also assist if you find me too blunt for your liking. Jisaidie kidogo kabla usaidiwe.
mwania
#684 Posted : Monday, January 04, 2016 11:39:08 AM
Rank: Member


Joined: 10/29/2007
Posts: 76
Thank you very much Matatuman, this time you are not too abrasive. As a businessman, one gets general information and decides whether it is a go or no go (feasibility stage). Then, gets more details before spending. I intend to buy one in cash and since am still in the feasibility stage, I am also looking at 33 seater and 51 seater (new Isuzu) which I can also buy in cash. It will depend on the profitability of the options available. So, between would a 51 seater, 33 seater or 14 seater, which one would you advise somebody to go for? I can see that a 14 seater can give a return of a net of Kshs. 3,000 (excluding maintenance, insurance, tyre replacement, taxes, salaries) and a 33 seater can give a net of about Kshs. 8,000 respectively. What about a 51 seater?
matatuman
#685 Posted : Monday, January 04, 2016 12:38:32 PM
Rank: Member


Joined: 12/5/2013
Posts: 224
mwania wrote:
Thank you very much Matatuman, this time you are not too abrasive. As a businessman, one gets general information and decides whether it is a go or no go (feasibility stage). Then, gets more details before spending. I intend to buy one in cash and since am still in the feasibility stage, I am also looking at 33 seater and 51 seater (new Isuzu) which I can also buy in cash. It will depend on the profitability of the options available. So, between would a 51 seater, 33 seater or 14 seater, which one would you advise somebody to go for? I can see that a 14 seater can give a return of a net of Kshs. 3,000 (excluding maintenance, insurance, tyre replacement, taxes, salaries) and a 33 seater can give a net of about Kshs. 8,000 respectively. What about a 51 seater?


I do not operate buses. Before buying a bus I suggest you go to kiambu and have a look at the 19seater vans. Hiace KDH223 chassis
mwania
#686 Posted : Monday, January 04, 2016 12:41:28 PM
Rank: Member


Joined: 10/29/2007
Posts: 76
I will check it up.. do you have information on the returns for such vans? Would you recommend them over the bigger buses?
Thitifini
#687 Posted : Monday, January 04, 2016 1:00:11 PM
Rank: Member


Joined: 1/15/2015
Posts: 681
Location: Kenya
mwania wrote:
I will check it up.. do you have information on the returns for such vans? Would you recommend them over the bigger buses?


@Mwania, I'm quite new in the biz. What I decided was to start small and learn the business first hand before I make my opinion.

Got 2 box vans; a petrol and a recent diesel. Both long distance in an organised sacco.

Petrol was a BAD idea! Net returns about 2k per day on average with all expenses deducted. Sometimes though it goes lower.

Diesel just started work, can give my opinion after say 2-3 months.

Advice, start small learn the buz kwanza. Suggest u get one in a local route if you have time to run after it daily. Will give you invaluable experience!

60% Learning, 30% synthesizing, 10% Debating
mwania
#688 Posted : Monday, January 04, 2016 1:14:11 PM
Rank: Member


Joined: 10/29/2007
Posts: 76
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?
matatuman
#689 Posted : Monday, January 04, 2016 1:59:48 PM
Rank: Member


Joined: 12/5/2013
Posts: 224
mwania wrote:
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?


Thitifini, what route are you on? Petrols only made sense when the difference in price was close to 600k. But they are still as good as 5Ls, just do a decat, fit an aftermarket chip and have it remapped then buy me a beer.
Thitifini
#690 Posted : Monday, January 04, 2016 2:14:36 PM
Rank: Member


Joined: 1/15/2015
Posts: 681
Location: Kenya
mwania wrote:
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?


You welcome. Have not done the calculations for the diesel. Started 3 weeks ago and you know the period.

Dec is also not a very good month to get a good picture of the buz as fares are usually over hiked. Let me update you in January end week.

Expenses deducted including (hope its exhaustive);

Fuel
Sacco fee
Driver salary
Spare parts (breaking pads seem to be most affected)
Third party insurance
Kanjo parking fee/stage fee
Service etc.

The sacco takes care of askaris, and there is a one year fee of music copyright commission of 3.5k

60% Learning, 30% synthesizing, 10% Debating
Thitifini
#691 Posted : Monday, January 04, 2016 2:32:54 PM
Rank: Member


Joined: 1/15/2015
Posts: 681
Location: Kenya
matatuman wrote:
mwania wrote:
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?


Thitifini, what route are you on? Petrols only made sense when the difference in price was close to 600k. But they are still as good as 5Ls, just do a decat, fit an aftermarket chip and have it remapped then buy me a beer.


@Matatuman, I'm on the Nbi Kisumu Kakamega route under Prestige Sacco. Planning to shop for another sacco and route for the third unit ecpected around March just for comparison.

Thanks for the info. Tried 'tuning' but didn't work! Will do the mentioned things (will ask my mek what the hell they are!) and will definitely buy you a crate!

Consumption yake is looking about 30% higher than other mats on same route, eating to my profit badly!

60% Learning, 30% synthesizing, 10% Debating
junior121121
#692 Posted : Monday, January 04, 2016 5:25:20 PM
Rank: New-farer


Joined: 11/9/2015
Posts: 56
subaru wrote:
mwania wrote:
Subaru, I will assume that the Kshs. 8,500 is net after deducting daily fuel expenses. But other expenses like salaries for the driver/ conductor, insurance, management fees, licensing fees, taxes that are due after a few months/ annually are not accounted for.. ama?



@ mwania the little research i have done with a new 33 8500 utapata na umeibiwa this means u can get more but this money should not be eaten its for running the biz na kulipa loan


@ Subaruman - that is correct. The 8500 is what you get after you pay the driver/makanga/ fuel etc and that's after you have been kulwad a bit. In the few years I have been running the business I have come to learn:
- Agree on a fixed amount as opposed to targeting a higher amount leading to fluctuations. In my case 8500/6500 which is weekday/weekend. Manyanga brings in 10500/8000
- Above amount is net. Driver pays himself and fuels daily (insist on always having the car sleep with a full tank)/Pays sacco fees (300 for direct management and 300 savings which I will mention on my next point) as well as washing the car
- Sacco takes 300 per day per car additionally which you get back at the end of year (Make sure you are getting this as I use to take the car for painting and top up on tyres etc
- First four days pays for city council (5600), insurance (14800) and service ( 5,200 for service on one month and 8100 on second month). I have quoted a bit higher on second month as you get to do things like linings/more greasing and allow for a bit more work
- Cars serviced every 24days on average

- Average earning for the vehicles is between 160-180k (this does not include private hires)

a bit wordy but hope it helps. Good luck to you and mwania - in your venture
mwania
#693 Posted : Monday, January 04, 2016 8:12:14 PM
Rank: Member


Joined: 10/29/2007
Posts: 76
Thank you very much Junior. That is very informative for a novice like me. It will help me make an informed decision.
mwania
#694 Posted : Monday, January 04, 2016 8:14:32 PM
Rank: Member


Joined: 10/29/2007
Posts: 76
How do you normally deal with the crew who seem to be on drugs and are keen to overlap and break all laws? And cops?
subaru
#695 Posted : Monday, January 04, 2016 8:33:06 PM
Rank: Member


Joined: 3/15/2010
Posts: 391
Location: nairobie
@ junior which is the simplest way to aquire a 33 str via bank n my statement is not good
junior121121
#696 Posted : Monday, January 04, 2016 9:11:42 PM
Rank: New-farer


Joined: 11/9/2015
Posts: 56
subaru wrote:
@ junior which is the simplest way to aquire a 33 str via bank n my statement is not good



@ Subaru - there are two main ways around this - at least that I know of:

- The two main asset banks supporting matatus are NIC and BOA. Equity seems to have really slowed down. NIC tend to be more supportive as they retain the log books and are flexible. The main downside to this is both banks ask for comprehensive insurance which costs an arm and a leg (Honestly this is what leads to a lot of people defaulting as the returns are very low once comprehensive is taken.

- Second way is there is a Kalasinga (sp) guy who is good on lending matatu owners. He is very respected in this field and his rates are same as bank (less the comprehensive cover) Ask around for his details or inbox me.

A third option you could and should consider if you have time is to start looking for auction vehicles at leakeys and compare to new ones. some serious savings to be made here.

Let me know if you need any more info



matatuman
#697 Posted : Monday, January 04, 2016 9:12:07 PM
Rank: Member


Joined: 12/5/2013
Posts: 224
mwania wrote:
How do you normally deal with the crew who seem to be on drugs and are keen to overlap and break all laws? And cops?


Why would you hire someone who is on drugs or acts like they are? Usiseme nakutusi but this goes back to my point. You have not done your research! Once you make up your mind what route you want to be on, it is up to you to see which sacco/franchise you would like to join. Not all operations are saccos, some are companies. Not all routes have cartels. If you join an operation of mad men then do not brand everyone as such. Asking for answers here will not help you, it will only get you 10% of the way. This is not a sprint, its a marathon! You do not practice for a marathon while watching on TV.
mwania
#698 Posted : Monday, January 04, 2016 9:42:55 PM
Rank: Member


Joined: 10/29/2007
Posts: 76
Matatuman, Thank you.
kendata26Y
#699 Posted : Monday, January 04, 2016 10:06:49 PM
Rank: Hello


Joined: 1/1/2016
Posts: 6
Location: Mini Apple
matatuman wrote:
mwania wrote:
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?


Thitifini, what route are you on? Petrols only made sense when the difference in price was close to 600k. But they are still as good as 5Ls, just do a decat, fit an aftermarket chip and have it remapped then buy me a beer.



Do you mind expounding on what this is and what the impact on fuel consumption is? I will gladly pay for the beer.
matatuman
#700 Posted : Monday, January 04, 2016 10:17:00 PM
Rank: Member


Joined: 12/5/2013
Posts: 224
kendata26Y wrote:
matatuman wrote:
mwania wrote:
Thank you Thitifini (Stephen?). I will avoid the petrol one. What are the returns for the diesel one? What expenses will you have paid for to get the net?


Thitifini, what route are you on? Petrols only made sense when the difference in price was close to 600k. But they are still as good as 5Ls, just do a decat, fit an aftermarket chip and have it remapped then buy me a beer.



Do you mind expounding on what this is and what the impact on fuel consumption is? I will gladly pay for the beer.


The de-cat basically gives you a high flow exhaust. Have the catalytic converter removed. Get a Unichip installed and get an eco tune done by one of the pro tuners. Only two in Nairobi. Simon Sharpe of Sharpe services in Karen or the master tuner himself Amit Pandya of AMS chip tuning.

Avoid Sharpe he works with some kalasinga who has a problem with dark skin. Last job he did for me was shoddy and they just don't care. AMS is pricy but they do a good job. Never had a van tuned at AMS, but they once did a Subaru for me.

Plus you might want to replace the oxygen sensor before the tune with a new one not second hand. Pombe si lazima so do not feel obliged.
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