You probably have been seeing a person running a taxi business since you were in primary school some light years ago and wonder why he seems to be more or less stuck in the same financial state, bar upgrading from an old rickety Toyota Hiace to a Toyota Quantum. The reason is that he still hasn’t realised that he is not just running a taxi, but a small business, Bonisile Makubalo, director of corporate affairs at SA Taxi,a gateway financier of minibus taxis,says. “When a minibus operator realises that he is running a small business he begins to accumulate the means to expand.”
Makubalo believes an impulse for expansion should be developed amongst grassroots entrepreneurs, which should see them move from a hand to mouth existence. Through applying this mentality, some ambitious taxi operators have opened spaza shops or expanded into the small businesses that surround and serve taxi ranks, he observes. “Alternatively, some operators choose to expand their taxi fleets.”
Sound organisation attracts funding from financial institutions, says Makubalo. “Whatever the operator’s method of extending his business interests, there is invariably a point at which he puts away money and, thereby, becomes an acceptable risk to conventional financial institutions. He then matures into having access to funding for a business rather than simply funding for a vehicle.”
Perhaps taxi operators underestimate their role. Taxis are a vital cog in the economy that should not be underestimated, explains Makubalo. “Each taxi operator is a micro business that contributes to the functioning of the entire economy. Don’t underestimate the work they do in getting 15 million people to work every day; taxi operators are key to the way the formal economy operates.”
While acknowledging that most operators are astute managers of cash flow in a cash based industry, Makubalo believes gaining an understanding of an income statement and other business fundamentals, would give them the tools with which to measure and, therefore, improve their success as business people.