Bodabodas (Motorbikes) have become part of the Kenyan transport culture. You find them everywhere from the big cities to the most interior areas of the country. This demand is creating a lot of opportunities for riders. Hence, Let’s look at how you can start a bodaboda business in Kenya.
The growth in demand for these services has created jobs for thousands of Kenyans in the entire value chain. These include the riders, sellers, and mechanics. Currently, the country has over 1 million bodabodas with this number growing by the day.
However, there are various things that you need to understand before starting a bodaboda business in Kenya. These are critical in making business decisions.
Benefits of starting a bodaboda business in Kenya
1. The low initial capital required – The cost of owning a bodaboda is lower compared to its peers such as a car. This makes it easier for the majority of Kenyans to own one. However there, is still an option of buying a second-hand one at a lower price. Some of the other costs included license and registration fees which are minimal.
2. A wide target market- The small nature of bodabodas allows them to operate almost everywhere. This makes it easier to do business across the country. In an actual sense, they have an advantage because they can easily reach areas where normal public transport vehicles can’t. A Key example is areas with narrow roads.
3. Little marketing costs– A bodaboda business does not require any marketing costs to attract customers. Bodaboda riders look for customers on the road, and the marketing is done in person, good customer relations are all that is needed to retain customers.
Disadvantages of a bodaboda business
1. Slow business during the early days- During the first, you should expect slow business before getting a good customer base. It also takes time to master aspects such as pricing and routing. However, this gets better with time.
2. High accident risk– The accident rate of motorbikes remains high in the country. This is mainly due to factors such as carelessness on the road and poor infrastructure. The only way to minimize this is to ensure you put on the right gear and follow the traffic rules. Bodaboda accidents also tend to be more severe due to the lack of advanced safety measures that are found in other modes of transport such as cars.
Now that you know the pros and cons of the bodaboda business in Kenya let us look at the steps involved in starting a profitable bodaboda business.
1. Identify your business niche.
There are various areas you can specialize in as a bodaboda operator. These include transporting passengers or doing delivery business. However, delivery is mainly limited to urban areas where there is a good market requiring delivery. Delivery mostly involves goods and food.
If you choose to transport customers, you become your boss and it is up to you to look for the customers. Most of the commercial bodaboda riders usually operate as ‘bases’. These are ‘groups’ that operate in a specific location. You can also call them SACCOs.
If you choose to operate your business in a big city such as Nairobi, there is an option of joining online platforms such as safe-Boda, Bolt, or Uber.
They help to connect you with customers and in return, you pay them a commission. Their model mimics that of online taxis.
In the delivery business, some of the most common food partner platforms include Glovo, Jumia food, and uber eats. The platforms connect you automatically with a restaurant once a customer makes a request.
Just like transporting passengers, you get paid for every delivery made. Hence your niche will be heavily influenced by factors such as location.
2. Market research
Based on the niche that you have chosen, perform intensive research to better understand the business model.
Every business model has its unique operational problems and benefits that are different from others. Some of the key issues to identify during the market research are the legal requirements, the bodaboda specifications, and the market dynamics.
All these factors will help you identify whether you are suitable for this business model. Some of the ways to do research are by engaging those already in the business. They have some key guidelines that would be of importance to you.
Performing market research helps prepare you psychologically for what to expect in the bodaboda business. Finally, you get information related to cashflows. Some key information is necessary when planning.
3. Create a business plan
A Business plan is a key tool that helps to run your business. It contains all the key actions and timelines necessary to make the business successful.
Your bodaboda business plan lists out what you want to achieve with the business and the actionable steps you will take to get there.
Some examples of the business plan content include the area of operation, time plan or the operating hours, customer target, and financial management targets.
In case of difficulties drawing a good plan, you should engage the services of a professional. However, this may come at a cost.
4. Get the Startup capital
Some of the major capital requirements when starting this business are buying the bodaboda and getting the necessary legal documents such as a license and insurance.
However, in case of limited capital, you can opt to take up a second-hand bodaboda that is still in good and usable condition.
On average A bodaboda in Kenya costs between Ksh 55,000 and Ksh 150, 000 depending on the model.
A second-hand one could even be lower depending on the condition and negotiation skills.
Another option is to get a loan for purchasing a bodaboda. This is possible through the various financial institutions across the country. However, you ensure the installments and interest rates are favorable for the business.
5. Acquire the necessary licenses and permits
For you to operate in this business, you need to have various licenses and permits. Some of these are unique to the area of operation. Hence, you should visit the local county offices for clarity.
Some such as the delivery business may require you to have a business registration certificate. Check out How to Register a Business Name in Kenya.
Other necessary documents include having a riding license. To get it, you need to pass a riding test with the NTSA.
6. Get insurance
Insurance policies are required for all vehicles and motorcycles operating on Kenyan roads making it a must-have.
There are many insurance companies in Kenya that you can engage. However, you need to factor in issues such as insurance costs and reliability before settling on the best one.
Operating without one exposes you to legal liabilities and possibilities of loss in case of an accident.
7. Choose your operation location
Having identified the best bodaboda locations when performing market research, should be an easy step for you.
Some of the best locations are places with high human traffic such as bus stops, junctions, food and clothes markets, and supermarkets.
If you are in the delivery business, you should position yourself around hotels and restaurants that offer these services.
Most of the traders in the food and clothes market use bodaboda operators to transport their goods to and from the market. Hence, this is also a strategic area to position yourself.
8. Start business operations
This is the final process after you have met all the requirements. At this point, your job is to implement your plan fully.
The average daily income from the bodaboda business in Kenya averages 500- 2000 shillings. The amount of income depends on the business location and business type.
With consistent income, you should consider adding the number of motorbikes to make more. However, you need to factor in the costs of hiring additional riders.
It is also good to note that it takes time to grow your customers. The income could be lower in the early days but pick up once you establish an as wide customer base.
Just like every other business, some elements such as hard work and patience will also determine the level of success.
Learn more on the Secrets of becoming a successful entrepreneur.
Costs breakdown of how to start a bodaboda business in Kenya
- Motorcycle purchase –55,000 -150,000 shillings
- Fuel costs- 10,000 shillings monthly
- Registration fee- Ksh 1,000 for a sole proprietorship and Ksh 20,000 for a company
- Insurance costs- 5% of the bike value
- Repair and maintenance- Ksh 2,000 monthly
The bodaboda business in Kenya continues to grow yearly. As the demand for transport services expands, so will the opportunities in this sector. Hence, the above factors are some of the areas to consider in how to start a bodaboda business in Kenya.
As long as you operate as per the law, treat your customers well and manage your business professionally, there is doubt of success in this business.
To recap, the steps involved in starting a bodaboda business in Kenya include:
- Identify your business niche
- Perform market research
- Draft a business plan
- Raise the required startup capital
- Get the appropriate licenses
- Purchase the relevant insurance
- Select your preferred bodaboda location
- Start operating your business