The Reluctant Entrepreneur: Travel

Today, a budding entrepreneur came to me for some advice. She felt that because she was starting small she did not have to think ahead. It is at the start up stage that she has more time to think, once the project is rolling there will be less time. By sheer chance when I started I got a chance to travel abroad for a conference. There was no doubt that in my mind thoughts that this was wasteful expenditure were flying all over.

Once in Singapore during the conference breaks, I contacted various moulders listed in the yellow pages and got myself three invitations to visit their factories. The visits were learning experiences. Consider this example. Back in India, I had seen moulding machines set up each with individual spaces and possible its own overhead crane. Here in a place where space was a premium, they were laid out side by side, just a meter gap between each, one crane serviced all 25 machines, similarly they was a another line on the other side. The corridor in the middle was used to service each machine, supply new moulds or take away ready parts, above the corridor was a platform with the RM feeders. In a space where in India I would have seen 6 to 8 machines, 50 were operational.

We used this thinking to good effect as we added machines in our factory. One vendor assuming we had no space refused to quote when asked. Later, he came to see how we had installed the machine we purchased from his competitor. The initial expenditure considered wasteful was actually an investment.

Over the years, this has become apart of my training. Visiting factories in different parts of the world and even India. India is also up there with the best compared to 20 years ago. When buying a large machine my french counter parts felt that we would have to also buy an automatic platform to load unload the moulding arm as was done in Europe. These systems are known to cost as much as the machine. A visit down under changed that perception. Australians seem to be more like Indians, have a jugaad mentality...they like us make it work with the most inexpensive means. In Australia they ran even bigger machines without the platforms, rather that climb up and work on an arm at a height, they inverted the arm and worked on it from the ground, brilliant. So my new machine does not have a fancy unloading station, we just work from the ground.

On the same trip, I noticed that after using a pneumatic gun to loosen the bolts, the nuts did not fall to the ground on the other side. Curious, since I had worked on retaining the nut in place without success earlier. These guys had over come my problem, I had tried to hold the nut in place by welding, however when the nut got damaged it was difficult to replace. They welded a sleeve instead and put the nut inside the sleeve, once damaged only the nut was replaced. Eureka.

Before I left for the Philippines to study, to me a factory had to be dirty, wires hanging grease on the walls floors, if there were pipes they had to leak and if there were oil sumps it had to drip. During the course I had an opportunity to visit factories practicing the concept of Kaizen. That was my moment of enlightenment, and I have never been the same again. I saw factories which were as clean as hospitals workers in white overalls. The advantage of white overalls was that if your overall got dirty it was a sign that there was a part of the factory that was not clean. I came back to India with a different perception, “FACTORIES CAN BE CLEAN”

The point I am trying to make to budding or seasoned entrepreneurs is travel and when I say travel I do not mean to sight see only, but travel to get a feel of how others do it and adapt accordingly. Get to a new place and thumb the yellow pages, there are always a few fellow entrepreneurs willing to host you, all you need to do is ask. The moral of the story travel is a great teacher. Bon Voyage

NOT JUST INTROSPECTION, ACTION REQUIRED,

• A variation to the same concept articulated earlier

Fr Savio's “Need for Introspection” in the Herald dated August 23 2013 makes interesting reading. I agree our education system needs some serious work, he highlights important issues but no solutions. The Catholic Bishops Conference of India (CBCI) has brought out an “Education Policy” which the Bishop is struggling to implement. The policy is aimed at delivering good quality education.

I disagree with his criticism of the no fail policy. It is a good system badly implemented. Fr. Savio actually provides the solution when he states that our “one size fits all” policy is the culprit. Unfortunately it contradicts his earlier position that allowing a student to drop an uncomfortable subject will hamper his growth later. The reason kids are not interested is because they have no interest in what is being taught. He asks, why are right brain subject being marginalised.

The only reason we have Apple and it famous “I” products is because Jobs took a course in calligraphy, the rest is history. Mr. Newman, the former Principal, famously said that he has no interest in maths and only uses it to ensure that he gets the correct change back after he has paid for his goods. So learning compound interest, constructions in geometry etc were water on a ducks back.

The Goa Board has addressed this issue through circular no 55. Only one school to my knowledge, Regina Mundi has actually implemented it. So far, three students have been allowed to drop an inconvenient subject and take another. How many Principals are willing to adopt this system which allows for tailoring of the course to fit the child.? How many are aware it exists.?

This is the basis of the National Open School where they offer both right brain and left brain subjects. The reason for Principals or Head masters shying away from tailoring is also mentioned by Fr, Savio. The school has to many administrative jobs, bal rath, midday meal, election duty and the like. This surely takes away the academic focus. Why not sub contract these jobs to an outside agency. Each school complex can be managed by one set in a centralised manner which is not impossible with mobiles, internet and computers.

Once the children begin to enjoy school they will stop misbehaving and labeling of “useless or duffer” will stop and along with it the rebelling. I recall when there was a “fail policy” coming to a new class and being joined by a few kids who had failed once or twice before and actually had no hope of ever clearing. It was a matter of time before they dropped out either because they began bullying and were rusticated or because they just grew old.

Now rustication is not an option and it is frowned on by Fr Savio. When it was available did it stop misbehaviour. We have laws, jails and courts do we have less crime. Bad behaviour is a symptom and not the cause. The cause is clearly wrong fit or choice of subjects offered. So we need rules and calendars just as we cannot do away with laws because there is crime.

What we as a society should be focused on is ensuring that the child is sufficiently trained to face life. Not all want or can become Doctors and Engineers. So if a child cannot or does not want say maths or language, so be it. Let him choose something else. Without maths he cannot choose engineering later, but surely such a student is sure he does not want that career choice, he may just want to become a good Principal, let him.

The Government needs to support Circular No 55 with options for courses in lieu of the standard menu. Once this is done, drop outs will reduce and smiles will be back.

The Reluctant Entrepreneur: What’s in a name

First published in The Business Goa

At the recently concluded Konkan Fruit Fest we tested our new positioning of placing many products using the brand name SHAKTI under a single umbrella. “SHAKTI for your home”. With this positioning many hitherto disparate products were aligned for the first time. While SHAKTI water tanks had a very high recognition and association with the brands values, viz: good quality, right price and timely delivery. Other products within the SHAKTI stable derived no such benefit. Infact feedback indicated that customers did not even associate the Brand with any product except tanks.

The concept trial was very successful and we learned that just using a well known brand name without a plan, even if it is your own does not guarantee transfer of brand value automatically. What we did essentially was point to the fact that SHAKTI also makes tanks, and emphasised the other products placing them around a home with the tank on the top as it is usually placed. In this way we were able to link the septic tank, the compost bins, dust bins, grease trap and planters using the line “SHAKTI for your Home”.

Before we did this we had decided to split our website into two websites, linked internally. While one set of customers know SHAKTI, they rarely relate to the Company name GMI Zarhak Moulders. On the other hand our OEM (original equipment manufacturer) customers viz:John Deere, VOLVO, Putzmiester, Atlas Copco, Godrej etc never refer to our brand and know only the Company name.

Earlier searching for our website shaktiindia.com was easy for our home products customers but the website made no sense to our OEM customers. This obviously led to confusion. Another aspect kicked in once a person reached our website, difficult to separate custom moulded parts which cannot be sold or specifications cannot be given due to restrictions on one hand and regular products on the other. Here again we see the complexity caused by brand and company name. We have decided to address this issue going forward by having two websites shaktiindia.com and GMIZarhak.com, both linked internally but each having information relevant to the customer segment it addresses.

The aspect of choosing a brand name was peculiar for us as it will be for everyone who chooses a brand name. We could have used some name associated with Goa, eg coconut or Maad or Talav or even SEATEX for that matter but we choose SHAKTI keeping in mind that the name implies strength/long lasting and is easily recognisable pan India which would be our long term goal. At the fruit fest there were many selling wines and pickles without a brand name, how does a customer who wants a repeat experience find the product later or recognise it in a shop. One brand name seemed to be associated with a famous cartoonist given the name and typeface, is there a connection?

For a start up it would be good if they can consider these lessons right at the beginning so that like us they do not waste valuable time before they figure out through experience. The first thing is to choose a brand name, better in my opinion if the name has some relevance to the values the brand wants to inculcate. These days it is advisable to use the internet to ensure your chosen brand name does not infringe on anyone else’s rights. Decide early if the brand and company name have to be linked, then design brand communication accordingly. When launching new products, decide early if you need new brand name or you will use the existing name and then tailor brand communication early, biscuit companies are a good example of using a different brand name for each category of product.

The bottom line is there is a lot of value in names brand as well as company, think hard and long early on, so that you enjoy the fruits for a long time.

NOT JUST INTROSPECTION, ACTION REQUIRED

• This was written in response to a comment by an educationist.

I agree our education system needs some serious work. I disagree that the no fail policy under RTE is suspect. It is a good system badly implemented. The “one size fits all” policy is the culprit. So allowing a student to drop an uncomfortable subject will not hamper the students future growth. The reason kids are not interested is because they have no liking for what is being taught. Why are right brain subjects marginalised in this day and age.

The only reason we have Apple and it famous “I” products is because Jobs took a course in calligraphy, the rest is history. Mr. Newman, the former Principal, famously said that he has no interest in maths and only uses it to ensure that he gets the correct change back after he has paid for his goods. So learning compound interest, constructions in geometry etc were water on a ducks back.

The Goa Board has addressed this issue by allowing students to take alternative subjects if the student cannot cope with a regular subject. A path breaking initiative. This is really the basis of the National Open School system, where they offer both right brain and left brain subjects. How many Principals are willing to adopt this system which allows for tailoring of the course to fit the child.? How many are aware it exists.? Only one school, Regina Mundi has actually implemented it. So far, three students have been allowed to drop an uninteresting subject and take another. The drawback is lack of study and testing centers approved by the Goa Board. The reason for Principals or Head masters shying away from tailoring is the fact that the school has to many administrative jobs, bal rath, midday meal, election duty and the like. This surely takes away the academic focus. Why not sub contract these jobs to an outside agency. Each school complex can be managed by one set in a centralised manner which is not impossible with mobiles, internet and computers.

Once the children begin to enjoy school they will stop misbehaving and labeling of “useless or duffer” will stop and along with it the rebelling. I recall when there was a “fail policy” coming to a new class and being joined by a few kids who had failed once or twice before and actually had no hope of ever clearing. It was a matter of time before they dropped out either because they began bullying and were rusticated or because they just grew old.

Under RTE, rustication is not an option and it is frowned on by all. When it was available did it stop misbehaviour. We have laws, jails and courts do we have less crime. Bad behaviour is a symptom and not the cause. The cause is clearly wrong fit or choice of subjects offered. So we need rules and calendars just as we cannot do away with laws because there is crime.

What we as a society should be focused on is ensuring that the child is sufficiently trained to face life. Not all want or can become Doctors and Engineers. So if a child cannot or does not want say maths or language, so be it. Let him choose something else. Without maths he cannot choose engineering later, but surely such a student is sure he does not want that career choice, he may just want to become a good Principal, let him.

The Government needs to support the Board in implementing its decision to “tailor” courses as per the students likes and dislikes, with options for courses in lieu of those on standard menu. Rather than duplicate effort, the Goa Government can allow students to pick subjects from the Open School Menu. Once this is done, drop outs will reduce and smiles will be back.

Portuguese Nationals of Goan Origin : A solution

First appeared in the Goan Observer

The 2012 elections opened the proverbial pandora's box. A losing candidate decided to test the law with regard to her rival's citizenship status. The idea being that if the citizenship rule could be used to disqualify the winning candidate then automatically as the runner up she could get promoted. Am not sure if the election rules allow such a promotion but till date there is no clarity. Wonder what would have happened if the complaints were against the winning candidates belonging to the opposition.

The current status is that the government has decided to drop the dual status citizenship cases against all involved for lack of evidence. Lack of evidence is surely euphemism for “buddy we want to do nothing”. Strangely after searching ( if they did search) for evidence for three odd years and not finding any against 500 odd suspects, the Government decided to open a fresh case against another individual who has been a thorn in their flesh. Does the government feel that pursuing a single case they have a better chance of getting evidence. Most likely it is a case of vindictiveness, different strokes for different people.

Goans feel that it is their birthright to acquire a Portuguese citizenship or passport because the rules in Portugal permit it. Portugal has allowed citizens and their progeny of its former colonies to acquire Portugal citizenship. Unfortunately or fortunately this was not thought of or allowed by the crown, read UK. Most inhabitants of Pondicherry have also got this facility from their french rulers and till today they vote by postal ballot in french general elections, despite being “indian” citizens. Most likely they vote in Indian elections too. No one has bother to upset the apple cart so in Pondicherry every one lives happily.

Goa too enjoyed this comfortable situation where many registered their births and followed the process of acquiring Portugal Citizen ship with no intention of actually settling down in Portugal. In recent years, the European Union has made access to the UK relatively a cake walk with a Portuguse passport. This prompted many Goans to move to what they see as El Dorado, a place of milk and honey. They have flocked there and this number is increasing day by day. This means that people from outside Goa have rushed in as they see Goa as a land of milk and honey, about this another time, it is another story. While it is understandable if those going to find their pot of gold our youngsters fresh out of college and looking at more opportunity. However those leaving are not necessarily young and whose range of possibilities in a new land are severely limited in addition to the handicap of acclimatising to harsh winters. This is a challenge for any Government to try an stem this exodus. Again another story.

This window of opportunity is not going to last long with the UK most likely going to stop this free entry by opting out of the EU. With the terrorist attack in Paris, the EU itself is considering closing the borders and restricting free entry throughout the EU. Border checks will be back. So this will once again mean that Goans with Portuguese passports are only going to use it as a status symbol and not actually leave the shores. The current situation does not allow them to use it as a status symbol, least their neighbour files an FIR as a means to hit back due to some domestic dispute. Recall the latest FIR's in a lawyer v/s lawyer row.

What can the Government do now, now that the issue has been raised by a selfish politician (are there unselfish politicians, another story) for selfish ends. The issue has to addressed. The Governments ostrich type (head buried in the sand) response is not going to help. Also using the situation to keep rivals in check or MLA's from the party loyal is not a long term strategy. Clarity has to be first priority of the State government as the situation effects many.

First we have to acknowledge we have a problem. India does not allow dual citizenship and that will not change, not in a hurry for sure. The central Government has already made its stand clear. Once a person takes up another citizenship, he automatically ceases to be an Indian citizen, there is no question of applying to be deregistered. Currently we have knowingly or unknowingly many foreign nationals of Goan origin residing in Goa/India but enjoying illegally the benefits of an Indian citizen. The problem with enjoying these benefits illegally is that it makes the beneficiary vulnerable to criminal prosecution.

Let the Government of India, citizenship is a central subject. Our Defence Minister can take up the case on behalf of these foreign nationals of Goan origin residing in India. Offer a six month amnesty and at the same time create an awareness about what the person can and cannot do, eg: surrender voter id, passport ration card etc. Undertake a drive to allot Overseas Citizen of India (OCI) card to such people so that they can now live peacefully without any issues like any normal Indian citizen but without voting rights or the ability to but agricultural land. Even if an amnesty is not feasible immediately, the NRI cell which is already in existence should and can be utilised to help those with Portugese passports to get an OCI card.

Another possibility is to give an option to those who did not realise the consequences of becoming Portuguese citizens, Show the how to apply again for Indian citizenship if they wish, fast track such cases. Obviously just throwing your Portuguese passport away will not be the best solution as it would make the person liable to future criminal prosecutions.

While holding the proverbial “Sword of Damocles” may have advantages in the short run, the Government of the day will surely reap many brownie points if they actually go out and assist this section of Goan society and pave the way for their continued peaceful living in Goa.

Defexpo: Why oppose

First Appeared in Goan Observer

Today in Goa there are many issues. We have the silly amendment deleting the coconut tree from the list of trees under the Tree Act, we have the IPB being used to bypass all rules and foist upon Goa projects which would otherwise not seen the light of day. We have the MOI issue awaiting a decision. Despite all these pressing matters we have decided that our time and enery is best spent opposing the Defexpo at Betul.

The land at Betul would have been transferred to scamsters long ago by Babu under the guise of setting up a food park. At that time there were no protests? Now, the land is idle and if it can be used for a few days why not? The proposal to have the Defexpo at Betul was discussed at the GIDC board meeting. The details were sketchy at best. However, to my mind it was a good idea, better than giving it to some mega project which would take the land at a subsided rate and then transfer it to another at a hefty profit, a la Metastrips. As per the rules the metastrips land should revert to GIDC.

The Defexpo will draw businessmen who will spend money alot of on Hotels, Taxis and restaurants. They will also not do drugs or create a nuisance with loud music. Should it not be more preferable to the Sunburn or Supersonic festivals. No one suggested alternative sites or questioned why North Goa and not some other site in Bangalore etc. This despite the fact that there are fears of drugs and most of the visitors would surely be financially less well off than those who will come for the defexpo.

Ofcourse we know that the “fees” the EDM festival organisers pay is directly proportional to the opposition. Finally it happens, There were no jail threats issued to the protestors or those opposing the EDM's, so why did the Government decide to do it for the Defexp protestors is a mystery. Good sense has prevailed and the Government had changed tracks and is now having a Defexpo Education presentation to convince the opposition and address their concerns. This is better late than never.

While it is no one's case that Goa will directly benefit from orders generated at the defexpo given that the participants may be limited to just 2 or 3 companies. What is possible is that local players can meet those who are visiting and get subcontract jobs. Given that Goa Shipyard is in Goa, manufacturers of some components may prefer to subcontract to reduce transportation costs for some items. There is also a possibility that if the GSL orders are large enough and they can be given the order book position, some suppliers may decide to make locally to derive logistic advantages.

A large no of visitors will be foreigners, surely once they visit Goa, they may decide to return again with their families, so it can give a boost to tourism. To my mind, holding the defexpo has advantages which cannot be ignored. It is also a three day event and not something year round which would all for infrastructure to be set up.

The opposition is using the mistrust created in the minds of the population by the series of U turns taken by the ruling dispensation. So if people believe that the Defexpo is a precursor to something more sinister or having a hidden agenda, can they be blamed. The Government changed the tree Act to accommodate a booze manufacturing Company. The Government used a back door, the Investment Promotion Board to push through projects under the guise of eco tourism, by allowing change of land use prohibited under the TCP Act. They even passed a booze project which is not a thrust area as per the mandate of the IPB and that too in an orchard zone. The government of the day suffers from a trust deficit. Having the education presentation will be a step in repairing or building trust with the citizens, however a lot more will have to be done.

One will notice that Babu who is the sitting MLA is not very vocal, he is around but he is not leading from the front, that is being done by others, why? Simple. He has too many skeletons in his cupboard and so he has to be careful. Very careful. After all he was the one who wanted a food park in that land.

The other component that is driving the opposition to the Defexpo is the church. They are asking the faithful to oppose the Defexpo because they were not taken into confidence. Oh really now. Did the Church take into confidence its own flock when they alienated large tracks of land. Did they respond transparently to the questions of their flock or did they do what the Government tried, brazen it out. The church has lost it moral authority to question land deals, Vaxim is church property which is being converted for eco tourism using the backdoor called IPB. Does the Church feel responsible, can they stand with placards in Vaxim as they are doing in Betul. The church has to introspect hard inwards and then come out with all humility and accept it goofed up. They must agree that mistakes have been made in the past and in future more care will be taken and transparency will be the key. Then they will have the moral right to lead the flock against the unjust ways of the Government of the day.

There is lots of work to be done and lots of areas where we as citizens are being short changed, let us focus on those areas and not get distracted and waste our efforts on small things. Defexpo does not deserve to be opposed just for the sake of opposition.

The Reluctant Entrepreneur: Credit

FIrst appeared in Business Goa

Recently I went to a store where I go regularly to get consumables. This time I need some items which were more capital in nature. I asked the owner if he would accept my cheque. He said he does not accept cheques but I could go to the ATM next door and withdraw cash.. Since it was upward of 20K I was reluctant and two, I am ATM challenged. So I did the next best thing, I drove to another store, a few kilometers away, he accepted my cheque and concluded the business.

Is this not a dilemma entrepreneurs face day in and day out. Are there any easy answers? Is it dependent on an ability to take risk especially when the supplier has no way of checking credit worthiness of the customer quickly. In the above case on can say the the first supplier lost business, on the other hand what if the first supplier has burnt his hands giving credit. That would explain his reluctance to give credit or accept a cheque, he may have decided it is better not to give credit and lose the business (read profit) rather than give credit and lose money (read cost and profit).

Bad creditors add another dimension, ie heart burn. One has to keep calling them up, a non value adding activity. Relationships usually sour if the time taken to recover is more than what was committed. Very often we see a sign announcing credit is given to only those above 80 yrs accompanied by both parents. Does this mean “Credit” is a bad word?

First we have to accept CREDIT is part of the business system. How we handle, how much credit to give and for how long is dependent on experience and policy and can vary. There is a myth that supplier credit is the cheapest as there is usually no cost. Believing this myth everyone tries to maximise it by delaying payments which is not the best way to do business or build trust. Ask any defaulter, they will have a hard time getting suppliers to give them material, and if they do it will be at a higher price.

There is a big cost but unseen. Customers who misuse the credit system are most likely to get effected in times of shortages with the supplier preferring better paying customer. Suppliers factor the delayed payment and adjust prices accordingly. A customer who delays payment usually scarfices his ability to negotiate. More importantly the customer should expect his consignments to be delayed. In short supplier credit is not cheap.

We have seen suppliers support us during the times we had cash flow issues because in good times we ensured payments were made in time. Once the cashflows eased we would bring the payment schedule back on track. It actually works both ways. We believe in doing anything for our customers, and customers must do one thing for us, PAY IN TIME. This must be applied to the supply chain, there the company is a customer and supplier is looking for ontime payment.

The best way to do business in in cash. At the end of the day when you close your sales book there is no outstanding. The second best way is to give credit. Be clear of the payment terms you are offering. We used to give our dealers a credit limit based on monthly sales, what we forgot to add was “Rs30,000/- or 30 days which ever is earlier”. A few dealers when asked for payment would say but we have not crossed the limit even if the payment was outstanding more than 30 days. BE CLEAR

Customers agree to pay on a certain date. If there is a default, then next time the credit facility is withdrawn with the clear remark that earlier promise was not honoured. A PDC is another way to go. This is because the laws are now more in favour of the depositor in case of dishounour.

The chinese method which also acts as an instant credit check with an unknown customer is by offering a discount say 2% for cash payment in lieu of 30 days credit. This translates to an interest cost of 24%. If the the customer cannot go out and borrow @ less than 24% p.a (today interest rates vary from 12 to 18%) from those who know him, it means you were better off not giving him credit.

An entrepreneur must know that the decision to give or not to extend credit should not be made at the spur of the moment, it must be well thought out and must become “policy” for that Company. This ensures that employees know exactly how things work and what has to be done. Do not change the policy based on the size of the order. The owner who refused to accept my cheque had a policy in place and more importantly respected it, irrespective of who and how much.