"I lost my job two months ago and I am going crazy with panic."
I am 30. I have a wife with two kids. My wife works as a secondary intern teacher with the TSC. I have been working in the private sector for the past two years.
My net salary averaged around Sh74,000 per month. My main expenses are rent at Sh20,000 and fuel at Sh8,000. I need help. I lost my job two months ago and I am going crazy with panic. I have Sh160,000 savings in my Sacco account.
I also have a 2007 Toyota Fielder that I have been using for my commute. I have sent out multiple resumes without success.
I am the primary breadwinner for my family as the intern money my wife is paid is peanuts.
What profitable business can I start with Sh160,000? I would be willing to sell off my car to top up capital.
Please assist me as I need to start making money again to keep my family afloat. - John
Chacha Nyaigoti Bichang’a, a financial coach at Chachanomics Consulting Firm and the author of Mastering Your Money
Even if you are definitely going through tough times, do not focus so much on the job you have lost. Think strategically and act decisively by exploring potential income-generating options.
1). Appreciate your current financial situation: You currently have Sh160,000 savings in Sacco account, a Toyota Fielder (liquid asset), a nonfinancial asset in terms of work experience in private sector for two years, a working spouse (even if with low pay but will be converted to permanent and pensionable terms in two years or less) and have low fixed expenses. This paints a stronger picture of your true financial and nonfinancial position than you can imagine.
2). Develop a crisis budget: Reduce spending on rent from Sh20,000 (27 percent) to around Sh11,000 (15 percent). Relocate to a modest house in the neighbourhood in the next two to three months. You have been spending Sh8,000 (11 percent) which you have to do away with as the car will be used for business ventures. The proceeds from any business launched should be spent prudently.
3). Prioritise creating immediate cash flow over dream business: You do not need a fancy start-up right now. You need to start a low risk small business that generates income daily or weekly using the assets at hand. Later on, you can scale up and think long-term. Explore the following three potential options.
Option one
Option one, use the Fielder to generate income: Enroll in taxi business such as Bolt/Uber/Little Cab especially if you are in Nairobi or any major town.
You are likely to generate Sh2,000 to Sh3,000 a day totalling to Sh50,000 to Sh70,000 per month. This amount is enough for rent, food and other basics.
You may alternatively approach private schools, NGOs or construction companies in order to get a contract for transport business which earns you around Sh30,000 to Sh60,000 monthly.
Consider also weekend hire and running errands like weddings, airport transfers and upcountry runs. You can make around Sh5,000 to Sh15,000 per week. This amount can keep your family afloat as you look for a job. With a small amount from you savings, you can also start weekend car boot sales services.
Option two
Option two, sell your car if necessary: A 2007 Fielder can fetch approximately Sh500,0000 to Sh700,000 depending on its condition.
Combined with your Sacco savings of Sh160,000, you will have an average total of Sh660,000 seed capital.
First, consider starting mitumba business. Start small with a capital of around Sh150,000 to Sh300,000. Stock items that move fastest like shoes, kids clothes or ladies’ tops. You will earn weekly profit of around Sh15,000 to Sh40,000. This business requires low skill, has low risk but has a high demand.
Second, start a cereal business of selling maize, beans and green grams. Buy in bulk from rural areas and sell in town. It will possibly raise a profit margin of 5 percent to 10 percent with an investment capital of about Sh100,000. You are likely to have a two to three weeks’ capital turnover as many Kenyan families survive on them.
Third, start a mini hardware especially near estates for fast moving items like cement, paint and plumbing items that are in high demand.
Option three
Option three, launch service business depending on your skill set (with low capital, low risk but high demand): This will include sales, Administration, ICT, Accounting, digital marketing and offer SME services. Use Facebook, WhatsApp groups and other social media to get clients. You may charge Sh3,000 to Sh5,000 per client.
In short, you need a business that generates quick cash flow to feed the family, pay rent and stay mentally sane. Engage in temporary ventures as you job-search.
Phase one, immediately use your car to generate income to cover monthly living expenses as you apply for jobs.
Phase two, if no job is coming by, sell the car and start a mitumba or cereals business that has high capital turnover.
Keep up the faith but put in the works and everything else shall fall in place. Setbacks do not define you. You have youthful energy and the ability to thrive despite the odds.
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