Monthly Archives: July 2014

Support, But Do Not Spoil

Posted on by
3

Just like I was  looking for moral and financial support when I started my career, many youngsters need support from people who are established. I have been an active participant in trying to provide similar assistance and support, to the best of my means and limitations, for the last 20 years.  It is a pleasure to share a couple of experiences I learnt out of my experiences on matters of financial assistance.

Majority of the people who seek help come with genuine repayment plans and fulfill their commitments on time.  It is always a pleasure extending support to persons with such an attitude. If the loan is for commercial purposes, there is nothing wrong for the lender to have a fair return, as the objective of the loan was to earn money.

If the loan is for an essential nature, I consider providing assistance ‘free of interest’ as getting them out of the financial strain is an adequate satisfaction.  But the borrower should realise that the lender has given the help depriving himself of the earnings that he otherwise would earn on that amount.

However, I have experienced that this ‘interest free’ tag has a  negative effect.   In such cases, the borrower instead of being grateful for receiving concessions, unfortunately, feels that it was his ‘right’ to have received that assistance.  In certain cases it was taken for granted as a gift.  Besides the borrower conveniently takes the repayment of interest-free loan as a last priority, as it doesn’t cost him to delay the repayments.  In most of the cases, the borrower avoids talking to lender as he considers it is the duty of the lender to ask for money.  In some cases, because of the relationship in question, the lender does not talk about it, converting “good money” to “bad money”.

Who is responsible for this?  The borrower?  No. My experience says, it is the me the lender’s fault, for very many reasons.

  • First of all, the loan given was emotion-based and not merit based
  • Secondly,  I mis-judged the borrower, in his attitude
  • Thirdly, I reduced the value of money, by giving the loan interest free
  • Fourthly, if the loan was given for non-essential purposes, I helped the borrower in  investing the funds for non-productive purposes.

Thus I was the one who spoiled them.  I could have been wiser in taking the borrower in confidence by explaining that I value my relationship with him and wish to avoid misunderstandings in future citing Shakespeare, “neither a lender nor a borrower be.”

Had I said a firm “No” and avoided getting emotional, I could have saved them and their deterioration in quality of attitude.  Above all I could have retained my relations with them!

Written: Badri Baldawa

Edited: Meeta Kabra

Who Was She?

Posted on by
9

I was driving alone from Abu Dhabi to Dubai on a Friday night in 1983-84.  It is a distance of 130 kms and a 1.5 hour drive.  At that time, the stretch of about 100 km from the outskirts of Abudhabi to Dubai World Trade Centre, was an isolated route.  The roads hardly had anything other than speeding cars plying at over 140km/hr.  It is a right-side-drive system in that part of the world.  That Friday night, I had a peculiar experience.

After about 20 kms from Abudhabi, I saw a lady standing on the roadside with her right thumb pointing up for a lift to Dubai.  She was wearing bangles made of white gold with shining studded diamonds.  Light from the headlights of the car reflected the brightness of the diamonds when she held her hand up for a lift.

She was wearing a white chudidar-kurta.  White – as white as you can imagine.  Shiny silk fabric. Silky white – neck to toe.  No part of the body were exposed except her hands.  I could not trace the face. I don’t remember it it was hollow at that time!

Normally, I would not give a lift to any one on that isolated route. But I don’t know why, I stopped the car to my right.  Though my car doors were auto-locked, she opened the door. It opened absolutely softly.  She sat in.  I continued driving.

She sat quietly. After a while I asked some question. She did not answer.  While I was still driving, I glanced towards her seat. She was wearing white socks, snow white, shiny sandles.

Funnily because I saw her legs resting on the neck support at the top of the seat next to me.  I quickly realised, it might not be really funny.  Where had her head gone?  It was at the bottom of the seat, with top of her bald head covered with a white scarf resting on the foot-carpet.

I glanced again, this time top to bottom of the seat.  It was clear to me she was sitting upside down.  Bald head, a long, long nose, eyes deep inside and chin projecting out!  There was certainly something seriously wrong!

I had the same thoughts you are having now.  I need to protect myself!

I had to take a pre-emptive step!  Who else could be better than Lord Hanuman in such situations?  In my mind, I started chanting Hanuman Chalisa. “Bhoot Pisacha nikata nahi ave, Mahavir jab naam sunave etc.”.  (If you chant Lord Hanuman’s name, ghosts will stay away.)

After a while, I glanced at her seat, though not at her.  She was still there.  I already had her company for about 50km.   No communication and it looked as if she was waiting for an opportunity to do something harmful.

I collected all my strength and started chanting again Hanuman Chalisa, this time loudly.  I kept repeating the loud chant.  After a while, the car stopped on the road side!  Waah Hanumanji!  I don’t remember having turned the steering nor did I remember applying the brakes.  But the car stopped decently, on the side of the road. She opened the door, got down, slowly walked away and after a couple of steps she disappeared.

Can someone tell me – Who Was She?

Written: Badri Baldawa
Edited: Meeta Kabra

 

 

Admirable PM – What A Vision !

Posted on by
2

In a TV presentation, I learnt that our Prime Minister Mr. Narendra Modi had his Master’s degree in Political Science. Though I couldn’t confirm it from elsewhere, it was mentioned that Mr. Modi wanted to go to the US for further studies.  He had his passport ready.  But then changed his decision and finally did not go. The reason given was stunning.  It wasn’t visa or finance related. Then what was it?  Give me a minute; I will get back to it.

As the younger members in my family were growing older, obviously  their education and other requirements increased. To cope with the increased need for income, I decided take up a job overseas in 1977, till a majority of my responsibilities were fulfilled.

I was out of India for 9 years.  This gave me many advantages.  Besides the financial earnings, I got exposure to the world, gained confidence in negotiating international deals and made good friends.  This helped me a lot when I started my business later.

As my responsibilities reduced and my wife and I wanted our children to be brought up in the Indian culture, we decided to return to India.  As pointed out by our friends there, it was a challenge to come back and settle in India.

While staying abroad, I was completely disconnected and lost touch with my social circles and our community in India.  For my fellow Chartered Accountants and professional friends I became an outsider and on my return, I realised I was unaware of the latest changes and developments in India in professional matters.  Internet and websites did not exist then.

Given the choices between business, employment and professional practice as a Chartered Accountant, business was my first choice without doubt. I always had a burning desire to run my own business, experiment with business and watch the outcome.

My overseas exposure, no doubt, helped me gain a lot in business.  But then I had to pay a price.  I lost something important in life; to remain connected with my people.

Who knows, had Mr. Modi gone to the US, he would have lost touch with his people, with us.  The reasons Mr. Modi gave for canceling his plans to go overseas was along the following thought, “I decided not to go out as I wanted to be in contact and in touch with my people!”

He had his full attention right from the beginning for His People.  That has added to his energy now.  We are sure to grow.  Admirable foresightedness!  What a devotion to His People!

Author: Badri Baldawa

Edited: Meeta Kabra

 

Expanding Business? Take care !

Posted on by
6

Expanding Business?  Take care

Expanding a medium size business needs to take care of certain tricky problems like expanding business vs infra-structure for increased activities and safety of capital already earned.    .

Any business is run to make money, of course, in a fair way.  Once a business starts earning money, the owner wants to make more money!  He realises soon that expansion or diversification of activities are the solutions. This invariably needs infrastructure which in turn needs further investment.

Expansion of activities also means a bigger uncertainty in revenues. Any unnecessary investments in infrastructure might eat up on the profits and liquidity, including that of the current business.  While, without taking business risks, it is close to impossible to expand business, an expansion without proper infrastructure is suicidal.  Therefore the owners have to adequately balance strategy between expansion of business and additional costs of larger infrastructure.

4-5 decades ago, our family business went through a similar balancing act or lack thereof.  The reasons stand good even today.  My dad owned iron ore and manganese mines.  He was as good at looking for and selecting remunerative mines as he was at obtaining Government permissions to operate those mines.  He started with a small mine of a few acres and expanded to 9 mining leases. From the records, I found out after his death that just two of them were as big as 1064 acres!  These could have been sources of unimaginable and unlimited revenues.

He was the lone manager of this enterprise.  Infrastructure for expansion was not planned.  We, all his sons, were still students.  Management was not adequate and therefore the controls on the resources were inadequate.  If controls are missing, the funds would go missing too!  The entire business turned out to be unremunerative whereas it should have earned multi-millions.  It was all due to inadequate infra-structure.

My son Anand, who earlier was in UK, took over operations of my business over a year ago. He wanted to expand and diversify the business.  His first thought was about infrastructure.  He spent almost a year in planning and building additional infrastructure for future activities and wisely limited it within affordable means.  We occasionally felt that the business could be managed without additional infrastructure, but learning from my dad’s experience, I was very happy to support him.

I have seen some not-very-large businesses that they were very successful when they were small, but failed miserably when they expanded.  On analysis, it was clear that the main reason for their failure was that only the value of fixed assets was taken as investments and funds for expansion were arranged accordingly. The need for working capital for day-to-day activities and transition costs were ignored.  This is extremely important and is a significant amount in most businesses.

A businessman I know, failed to notice another significant problem. “When one heads towards the top at top speed, he had to ensure that he doesn’t drop down”. At whatever height one is, it is a human tendency to assume that the peak is yet to come.  But one cannot judge when one is at his peak. Therefore, to be safe, at every stage of climbing, one should secure themselves from a fall.

How do we secure that?  Simple, set aside a good percentage of earnings for a rainy day, a saving for safety from failures.  Do not put entire capital at risk. For any reason, if expansion investment is lost, at least you are left with a base capital to survive for future.

These are some of the lessons learnt while analysing the reasons for failures of some of the prosperous businesses while undertaking expanded activities.

Take care!

Written: Badri Baldawa

Edited: Meeta Kabra