Typical investor in the Ugandan taxi business will meet two key issues before they begin their first shilling. Below I will explain these questions:
When I first bought a used taxi from my grandparents, I repaired a mechanic in the suburb of Wandegeya. He "tugged" and told me he was in perfect condition. A week later, the difference raised some problems. Then the crankshaft had some problems. Finally, they came to these questions, but then the story of the witchcraft came.
A typical Ugandan reader was probably surprised that I had not raised the business and the question of witchcraft yet. It appears that many Ugandans firmly believe that witch travel to a doctor and the last white goat (and black spot) will be successful overnight if he can not distinguish (which he can use as dividends) and cash out of the sale (which he does not should be used until all the costs are resolved.) So the story of witchcraft is this; I offered John my cousin [not real name for obvious reasons] to be the taxi driver. The family gossip mill "dazzled" the taxi because:
* Day 1: Suspension interrupted
* Day 3: Crankshaft caused further problems
* Day 5. Day 7: A knock on the taxi by the taxi crossing the road in Ndeeba.
In the first month, when I was in the cab, I made only 7,000. Oh, I used to save the driver through the police station. I'm not one who examines the validity of the story of witchcraft, but it introduces the taxi business and the factors to consider if you want to invest.
First CONS (Of course)
1. Unethical Mechanics
It is possible that when I took the taxi for renovation, the mechanic I trusted for repairs gave me a pro-forma invoice for parts that were not installed or did not make the necessary repairs. How can I make sure that you do not know the complexity of a car and not mention a secondary taxi on Bungokho?
Of course, you can take this problem instead of Toyota Hiace (a taxi business in Uganda) to Toyota Uganda repair shop. Do not expect, of course, to pay for Shs. 7,000 repairs. Computer-based diagnostics are used and their mechanics logging system is used to bill an hour. Oh, and of course, new and genuine parts are being used, so remember that the used crank is the Mexican Cartridge on the Kisekka market. Based on the Toyota Uganda website, you can count on starting Toyota Hiace Model Shs service. 183 900.  2. The difficulty of revenue control
Unless the taxi itself or the installation of cameras, like London buses or national express buses in the United Kingdom, it is practically impossible to determine the number of passengers at any given time on a given route. I know that a lot of business owners get the problem by not paying the manager / manager wages, but they demand a fixed daily / weekly claim on the 6 days of the week, and Sunday is the "leader's day". The pilot's day will expire on the day you do not pay because all the proceeds go to the churches to keep the hold. This may work to some extent until the driver / conductor says "Mukama wange, walk to work etuletedde bizibu"
Then he resumes half of the agreed fee. How do you prove the leader's story?
Oh, there will be many such stories. Next time, the Uganda Taxi Operators and Leaders Association (UTODA) will destroy them and go back to the next day; The "search and shutdown" operations of the Traffic Police caused enormous delays on the following day with drivers' strikes. Of course, you, as the "Lord", can not be inhumane and continue to claim the fixed amount?
As you've guessed, if you're serious about investing in this sector, maybe you can find the carrier on board cameras. However, for the sake of simplicity and in line with the Ugandan norm, I therefore suggest that a potential investor insist on the usual practice of setting a "entrepreneurial" prize recorded on a given route with the driver. However, I would suggest that this rate be checked to confirm the different routes of the taxi.
3rd Initial capital and cost of financing
Thanks to a vehicle seen as a key asset in Uganda, it is quite common to finance this investment from commercial bank or leasing financing from companies such as DFCU Leasing Limited. In addition, many car rentals are happy to provide credit. You can get a decent used taxi (with stripe and fixed seats) based on Autsrader.ug's research information, approx. Around 17m.
Now the most important issue of financing costs. After Bank of Uganda raised its Bank Rate to 29% (in November 2011) to 29%, expect that commercial banks will raise their lending rates by 31% on average. Bank interest is the rate at which commercial banks can borrow from the Central Bank as the ultimate lender. The significant cost of financing – as we will see later – will have a significant impact on the expected return on capital
4. Over a Long Time to Realize Profitability and Return on Investment
I'm presenting an analysis of the estimated profitability of business.
It is estimated that the investor will buy a cab for Kampala and its suburban routes. I use the most common model, which is the "entrepreneurial model". According to the model, the driver provides the investor with an agreed daily amount fixed for 5-6 days a week, and the seventh day the driver / driver must make sure.
In this model, driver / daily costs; fuel, daily and monthly UTODA charges, loading fees, KCC fees, stage fees, etc.
Summary of the Profit Position:
Monthly Revenue: Shs 750,000 (estimated to be 25,000 ShS daily for 25 days)
Repairs and Maintenance per Month: 183, 900 (Estimated Toyota Uganda Workshop Information)
Financing Costs: 439,167. (estimated at 31% of the interest rate for 17m, estimated at Bank of Uganda Banker in November 2011 and a 2% margin)
Insurance (3rd Party): 4,167
Monthly Net Profit: 122,767  Annual Profit (A): 1,473,200
Capital Expenditure (1994 Toyota Hiace, Used) (B): 17,000,000
Capital Equity (B / A): 11.54 years
the above analysis, forget your money in this sector. Of course, even at this stage, you might want to visit a witch doctor who might use your spells to let customers like the taxi for everyone and magically analyze the above analysis to get back in 1 month. [Please note that the last statement is made in jest and I wouldn’t expect a serious investor to consider witchcraft for business success].
5th Market Satisfaction and Related Steps
Too many taxis in Kampala or almost anywhere in Uganda. It seems everywhere you turn around, there is a taxi, so you do not have to go into details, but it's worth mentioning the industry's tendency. As there are too many taxis in Uganda, UTODA's many reports will ultimately lead to the policy surrounding the industry and then the many government initiatives to try to prevent new and old taxi parks in Kampala; and instead moving the taxi to taxi cabs outside the city like Ndee, it becomes a reality. As an alternative, we will eventually see the transfer of road buses instead of taxis, as promised by the mayor of Nasser Seya, Sebagala. And now the PROS
1. Equity of return on equity, assuming financing
The main advantage of this sector is that the investor will invest without charging borrowing costs.
Monthly Revenue: 750,000 Shs (estimated to be 30,000 ShS per 25 days per day)
Monthly repairs and maintenance: Shs 183, 900 (estimated to be Toyota Uganda workshop information)  Insurance (Third Party): 4,167
Monthly Net Profit: 561,933
Annual Profit: 6,743,200
Capital Expenditure (1994 Toyota Hiace, used): 17,000,000
: 2.52 years
From the foregoing, capital gains without financing costs will be reduced to 2.52 years after the moderate 11 years due to the first analysis. Insurance for Additional Financing
Assuming you did not borrow a taxi, the added advantage is that vehicles in Uganda prefer to borrow due to the fluctuation of the used car market. Alternative One-off Use
The advantage of taxis is that you can use it for one-time use, such as private charter or private investors, for example, for investors; the kids are in school, you are in a funeral; with me like in Uganda, who in 2005 encouraged me to accompany a taxi on the night to visit the "Mzungu" girl I was impressed with.
I think John's witchcraft is already working because when I came back to see her, I fell to her neighbor's wall when I tried to reverse the taxi to turn to the home door. I insist that this witch is in the workplace, and of course not the fact that I have no experience with driving a long vehicle.
Summarizing and Final Word
First of all the numbers.
* Capital investment (A): 17,000,000
* Annual revenue: 9,000,000
* Annual earnings (revenue excluding all costs and interest) (B) 1,473,200
(years of capital recovery) (A / B) 11.54 years
* However, if you do not have the funding cost, this return time is 2.54 years.
directly before investing:
* Appropriate entrepreneurial spending research. In Uganda, the preferred model is to rent a taxi to the driver / driver, it's a good idea to spend time on the various drivers and perhaps even on UTODA to create a decent price for your route and ensure that "mukama" wange "
* Considering cheaper financing options Too often ignoring the benefits of pooling funds from our family members and friends, which provides capital finance (interest-free credit) rather than degrading commercial bank loans
* A fair and reliable installer's duty
In principle, I expected business models where they can not understand or control the complexity of revenue recognition and can barely control costs to increase efficiency and so I'm a "no-no" sector.
E the most important advantage is the simplicity of revenue sources and may have led to excessive investment in this sector, including illiterate people [[financially] 19659002] If, therefore, the simplicity of this type of investment and the advantage that the vehicle is safe for further investment for borrowing, then you must invest in it, you only have to be able to provide the "differential tremors."
Source by sbobet