Managing cash flow makes a taxi SME more profitable

Managing cash flow makes a taxi SME more profitable.

Collecting your cash is not the same as managing it

 

When Mrs Elsah Maimela started her taxi operation in 2005, she didn’t think of it as being a small business and had no idea how important it would be to learn the business skill of managing cash flow.

 

“A taxi operation looks simple because it’s about taking cash from customers in return for getting them to their destination.

 

“But while money certainly comes in, it also goes out – to drivers, petrol and oil, maintenance of the vehicles, and, sometimes, to repairs. So, you’ve got to sit down and plan how you’re going to balance income and costs – and that’s not always easy.”

 

Mrs Maimela realised just how critical cash flow is to any business, not just a taxi operation, when she attended the free professional business skills course and her driver attended the free professional driving course offered to members of the SA Taxi Shayela Rewards Programme.

 

Shayela Rewards is designed to help taxi operators continuously improve their operations.“The two courses proved to us both that it is in our best interest to keep passengers safe by keeping the vehicles in good working order and driving them properly and according to the rules of the road. In doing so, we have fewer repairs to pay for, and that saves me money. Driving properly also means using less petrol and that also saves the business money.

 

“So, Shayela made me realise that owning taxis is not just a way for me to earn some money. It’s about being an entrepreneur and, therefore, if I use my initiative and make good decisions I can do more than cover my costs. I can actually make a profit.”

 

Mrs Maimela started her taxi operation after becoming ill and leaving her job with the municipality. She decided it was time to change her life by helping the people in her area, Rondebult in Germiston, with their transportation problems.

 

She started cautiously with one small vehicle carrying mostly schoolchildren at peak hours.

 

This gave her the confidence to expand to additional small vehicles. She soon discovered, however, that it’s difficult to make any profit with small cars because they carry so few people at a time. The cost of running the vehicle exceeds the income from it.

 

So, in 2007, she took the bold step of buying a 15-seater minibus. With SA Taxi’s product range, Mrs Maimela was able to get financing, insurance, and the ability to earn cash back with the Shayela rewards programme

 

Mrs Maimela now has four taxis, of which two are paid off.

 

“Being a Shayela member has also helped me pay my vehicle instalments because I get as much as R8000 a month cash back for ensuring that I keep improving my business,” she says. “Shayela pays me to be a better business person.”

 

To earn cash back on monthly credit instalments, Shayela members need to ensure that their instalments are up to date, they have taxi insurance, their drivers have attended the Go-Shayela training course (or they have a budget for their business), they have a working CarTrack Fleet unit, and, that they are keeping their Shayela promises, as displayed in their taxis.

 

Additional Shayela benefits, designed to help taxi operators with the management of their businesses, include a toolkit for their taxis, 5% cash back on purchases at Autozone, and the ability to earn up to R1 900 on adverts placed inside the taxis.