Motorcycle business known as “Boda-boda” has become a very accessible “last mile” transport service provider in almost all parts of Kenya. Youth Grow Smart Boda BODA [YGSB] aims to provide passenger and small/light cargo transport between Narok Township and greater Narok County region.
Motorcycle transport services are popularly known “Boda-boda” originated the early 1990s from Uganda through Busia town in Western Kenya and spread to adjacent towns, subsequently other cities in Kenya.
YGSB will target individuals and households who want accessible, fast and reliable transport service provider for all their transport needs within Narok Township. While the passenger transport sector is dominated mainly by matatus, these cannot reach to everyone’s doorstep since they operate from established and regulated matatu terminus. YGSB will focus on giving unparalleled customer experience so that we can always be the “top-of- mind” name for anyone who wants individualized transport services within Narok Township and greater Narok area.

Business Name: Youth Grow Smart Boda BODA [YGSB]Company Mission Statement: To offer unparalleled customer experience, in individualized transport services within Narok Township and greater Narok area.
Target Market: Individuals and households within Narok Township and greater Narok County region seeking individualized transport services including:
1. Persons looking for transport services to and from Matatu terminus
2. Individuals looking for light/small cargo delivery within greater Narok 

Industry/Competitors: Our main competitor will be other individualized transport and small cargo transport operators such as other boda boda operators, Marut operators, Tuk-tuk operators and taxi service providers.

Legal Structure/Ownership: We shall register the YGSB business name (sole proprietorship) to enable YGSB to open a bank account independent of the owner. We shall abide by all statutory requirements for operating a boda boda services such as motorcycle driving licence
and insurance covers.

The problem the product or service solves: In many parts of the country, transport is at best unreliable, crowded, accident-prone and very inconveniencing in terms of accessibility, timeliness and comfort. While motorcycle transport does not solve all the transport problems – and in certain ways can increase some such as accident risks, they offer access and convenience that their closest competitor – matatus, cannot match. In rural areas especially (such as Narok), matatu terminus are often miles away from homes and individuals have to walk long distances to get to them. For these people, boda boda, therefore, offers an alternative or even complementary transport service linking them from the primary public transport model – matatus to their doorsteps. Additionally, boda boda operators offer personalized light/small cargo delivery service for many households such as cooking gas delivery, collecting/delivering market products to markets and households etc. Because customers can establish a personal relationship with a boda boda operator, such bonds of trust can morph into individualized courier service relationships – where trust becomes well established between the two.

Any proprietary features that give you a competitive advantage: Safety & Trust, as well as excellent customer service skills, are the three critical ingredients that can give any boda boda operator competitive advantage over others. I will work to ensure that “a customer’s word will be my command” ensuring to deliver my services in a timely and respectful way for all the reasonable service expectations from my clients.

How you will price your service: Boda boda “floor” level prices are set by each of the respective boda boda bases. Charging fees lower than generally agreed prices attracts stiff penalty from fellow base operators. YGSB will, however, strive to meet and exceed client service expectation such that our price – standard though it may be, will rank as superior and highly competitive.

control have been unsuccessful, it is likely the government will continue to introduce these regulations. Fortunately, online transport applications such as safe-bodaboda are easing market linkage between customers and boda boda operators – which may well see the end of “bases”. This is likely to ease entry as all an operator will require is being duly registered as a provider with such an app. Unfortunately, this may reduce cooperation and mutual support that takes place between members of each of the “bases” especially when one gets an accident. The “bases” are social capital production centres, supporting members to save, mutual support during situations of adversity such as a death in a family, as well as security, particularly in reducing motorcycle theft.
Key competitors: Every business has competitors, and so does boda boda business. Our main competitors are individuals who prefer to walk, use a bicycle, matatus and taxi service providers. Our competition strategy is outlined in the matrix below.

Pricing: Prices are set by respective boda boda bases and strictly policed by the stations – charging lower fees than agreed is taken as undercutting fellow operators and an unfair pricing strategy. We intend to adopt the pricing guideline provided by the central base – Narok.

Other: Because pricing guideline is provided by the “base”, we shall instead use our “brand” to advance our competitive advantage. We shall ensure that we provide a highly customer-centric value proposition, emphasizing timeliness, trust, and high sensitivity to safety to attract customers as opposed to offering competitive prices.
We shall join the Narok Central Base because it is convenient to customers, its proximity to public transport – matatus (whom we aim to offer last-mile connectivity) and its proximity to major businesses in the township (who require transport services for their purchased cargo.

Start-up Expenses & Capitalization: Prices for motorcycles appropriate for boda boda business range between Kshs. 105,000 –200,000. There are also several financing options available in the country. Most of the options require that one to make an initial deposit and pay the balance through daily/weekly/monthly instalments. There are many financing options available, ranging from established banks such as KCB bank, Mogo, Bimas Kenya, Human Rights & Science Kenya etc.
In deciding on the choices one will use, there is a need to consider not just the initial down-payment but also the interest charges over the period of financing. Below we present two available options – Mogo & Bimas (these are provided as a guide only since actual costs are arrived at after the
providers evaluate client’s risk profile).

Financial Plan: Cash flow projection – Weekly Our research shows the likely revenue scenario for different bases. It is no secret that some stations are more competitive than others – which explains why they also have many more boda boda operators as well as high-level initial base entry fee. Below is actual weekly data on five bases:
Base Monday Tuesday Wed Thurs Friday Saturday Sunday Total
1 2000 1500 1500 1000 3000 1000 800 10,800
2 1000 1500 1500 800 2000 1800 800 9,400
3 1500 2000 2000 2500 500 2500 2800 13,800
4 1800 1000 3000 1000 1000 1000 800 9,600
5 1500 700 1000 800 600 400 2000 7,000
For our planning purposes we shall use daily averages from the 5 bases within greater Narok County region, well aware that boda boda revenues are a function of idiosyncratic factors that are unique to a particular base and individual operators:

Day Monday Tuesday Wed Thurs Friday Saturday Sunday Total
Weekly Projected Revenue
1,560.00 1,340.00 1,800.00 1,220.00 1,420.00 1,340.00 1,440.00 10,120.00

In terms of costs, our research indicates that there are two main cost drivers for boda boda businesses. These are fuel and service & repairs. These two cost centres are in turn a function of distance travelled and quality of driving by the rider. More sensitive boda boda riders are likely to incur less service and repair costs than the more aggressive riders. Our research indicates fuelling costs are the highest recurrent costs followed by services and minor repairs in that order. Weekly fuelling costs average at Kshs 2,200 or Kshs 8,800 monthly. At the same time, services are undertaken every ten days at the fee of Kshs 600 or Kshs 1,800 monthly, and other repairs average at Kshs 250 weekly equivalent to kshs 1000 monthly. We, therefore, project that monthly income from operating activities to be Kshs 40,480 less fulling costs of Kshs 8,800 and service and repairs of Kshs 2,800 leaving us with net margins of Kshs 28,880.
It is from these net margins that we shall plan to pay for financing at an accelerated rate of Kshs 14,853 monthly such that by the end of 12 months we shall have cleared all our debt. In essence, then for the first year of operation, our net profits are projected to stand at Kshs 14,000 monthly.

Source of Capital: There are many providers of financing for the purchase of boda boda motorcycle in Kenya, such as the three we have highlighted above. While Mogo requires a daily minimum payment of Kshs 350 after having to pay a down payment of Kshs 25,000, KCB bank, on the other hand, offers a loan at 14% interest rate plus 3% service charge. We propose that instead of getting a loan from them, we shall approach HR&S to give us a loan of 170,000 which will be adequate for us to buy a good motorcycle valued at Kshs 170,000 plus Kshs 9,000 comprehensive insurance and personal accident cover. We shall then seek Kshs 9,000 financing from other welwishers which would require us to make minimum monthly repayments of Kshs. 14,853 only and clear the loan balance within 12 months.