“Gumamit ka ng power of leverage. Put a system in your business then teach a person to operate your business para di lahat ng effort mo eh puro na lang naka focus sa isang bagay”
Jeepneys are undeniably the most popular mode of transportation in the Philippines that truly symbolize Filipino culture, innovation and artistry. Indeed, this pangmasa transportation continues to dominate the streets of the country. No wonder, a lot of first time entrepreneurs and businessmen are venturing in the jeepney business. But before you enter this lucrative business, understanding the basics of managing a jeepney is a must for starters! Here’s how Mike Estera made his jeepneys thrive despite the ups and downs on the road.
Before entering the jeepney industry, Mike, 26, did a lot of entrepreneurial things as a child. He recalled how he was delighted when consumers stop by his small barbecue business on the sidewalk every summer during his youth. Aside from the small barbecue business, he also co-managed their sari-sari store with his siblings. He even sold homemade leche flan and hand soaps to his classmates back in high school. At a young age, he learned a lot of valuable lessons that helped him up to this date. The experience has taught him how to make the money work for him and be competitive only to himself.
While working as an Aircraft Engineer in Davao, he met a woman who is now his wife and eventually started his family life at the ripe old age of 22. As a young father, Mike thought that his decisions made career advancement difficult and personal growth became secondary because he needed to put his kids before anything else. Mike never planned to take the entrepreneurial route but he liked the idea of being his own boss and the freedom that comes with being a businessman. Three years later, Mike took the leap and explored the road to entrepreneurship through a jeepney business.
“Kaya jeepney business kasi mekaniko rin ako…mas gusto ko ginagawa ko kaysa pumasok ng kumpanya. May financial freedom…at naging inspirasyon ko mga anak at asawa ko,” Mike said.
To succeed in this industry, one should examine several factors to get the most of his investment and to maximize his profits. Depending on your budget and goals, decide whether it is practical for you to invest on a brand new jeepney (P400 000 to P750 000) as opposed to a 2nd hand (P150 000 to P200 000).
A brand new jeepney may be pricey because of some additional costs such as insurance, and registration but it only requires minimal maintenance that can save you maintenance fees in the next 5 years.
On the other hand, second hand jeepneys are affordable as prices vary depending on how you negotiate with the previous owner. Although, it may be a lot cheaper, the cost of depreciation and maintaining the vehicle (tires, oil, brake linings, clutches, etc.) is high. Mike said that ROI may be faster for 2nd hand but he also stressed that one should be meticulous before buying. He suggested to consult to 2-3 mechanics before buying and check the machines and other parts as well.
Mike remained resilient despite the difficulties that he encountered in building a long term and sustainable business.
“Una, mahirap humanap ng matinong driver at mechanic. Pangalawa kung papaano ka gagawa ng sistema na hindi ka nila maloloko. Pangatlo, mga biglaang gastos at pangyayari na di inaasahan… kinakailangan ng magaling na pagdidisisyon at matinding disiplina dahil ako ang boss so pangangaralan ko sarili ko”, he said.
He said that one should be extra cautious when hiring a jeepney driver. Choose someone who has driven a jeepney before and already has a driver’s license. Do background checks and ask for necessary documents like his driving records, references and NBI clearance.
If you are entering a boundary system contract, you have to establish guidelines and rules that include your boundary rate, driver’s route, working hours, usage of the vehicle and who will be held liable for loss, damages and other fortuitous event.
A jeepney driver’s take home pay depends on his work route and boundary rate. An estimated net income per day ranges from P300-P400, and thus, a monthly net income of P 9 000-P12 000.
Later on, Mike learned to manage his drivers effectively by treating them as his business partners. Constant communication is key in building trust and you have to explain the rationale behind your strict policies. Joining them on the road from time to time is also a great way of evaluating their performance. You can also give tips and advice for a more convenient route and help them where to locate the cheapest fuel.
Indeed, staying in this competitive business requires the ability to deal with setbacks. Mike thought of quitting the business when he suffered from financial losses one night after a deadly jeepney heist in Davao. He said that in order to succeed, one must be prepared with these unforeseen events as there are additional costs for repairs and replacement of stolen parts.
3 years later, Mike now owns 4 jeepneys and has 5 drivers working for him. Mike continuously works for his vision of managing more jeepneys to help more drivers earn a living and help their families. Mike’s road to entrepreneurship has taught him to be resilient and to stay on the course.