FDI in construction business

A lot of foreign investors invest in Indian construction companies. And there are foreign architects who design homes.

That is fine. But they should study the Indian scenario and the needs of the Indian people and then design the homes. The modern apartments do not have grilles for the windows!! They would design an apartment with floor area of close to 2000 sq.ft. but there would neither be a pooja room nor a store room!!

A little over two months back a company with FDI in the construction business after negotiation entered into a contract with us for the supply of a quantity of air-conditioners. But they never made the advance payment. Around a fortnight back I asked them and they said the cheque has been received. When I sent my representative they didn't give the cheque. They said they would come and give it to us.

A few days later when contacted they said there is some delay in the project and that they would make the payment five days before they actually needed the machines and kept the delivery date open ended.

It is fine. We have not supplied the machines to them. But machines earmarked for them are lying in our godown and we are staring at them every day!!

A manager may say " Come rain or shine I want the job to be done. I want only results."
But there is something known as ground reality.
It is monsoon season and nobody would start any building activity right now. Also construction work here would not start before bhoomi pooja and this is usually done after Pongal. That is the practice.

Come on,  as prudent businessmen we should be able to foresee such eventualities!!

How to collect money!

Let us talk about how to collect money (as a wage).

The difference between a worker and a business manager is this:

Worker: He does his work and collects his wages.

Manager: He should give the work to the worker, oversee his working, raise the bill after proper paperwork, collect the money, put it in his company's account and then take his wage !!

A worker cannot become a manager (maybe a very few over a matter of time).

A manager should not act like a worker !!

"Everyone rises to their level of incompetence."
Laurence J. Peter, "The Peter Principle"

How I SNAPped a DEAL !!

How I SNAPped a DEAL !!
=====================
Everyone wishes to do on-line business these days.
Who doesn't want to?
A friend of mine wanted me to explore the possibilities
of doing on-line sales of air-conditioners via the bigwigs.
I know it won't work, but still....
Even I,  am a human being craving for more business!!
So what do I do?
Very simple, because these guys are dogging you every
other day on the mobile....
I asked one of the guys to meet me and discuss their proposal.
R.E. (Relationship Executive)
Oh what fancy names and jargon these days!!
R.E. Sir you have to register with us online and you are ready!
Me: And then?
R.E. You give us a list of items you have to be sold and the price you want for the items!
Me: (Wow!) OK, and then what happens?
R.E. If an item with you is sold, we come and "take it away".
Me:(Oh wonderful!!) But the price to be quoted by me will
be more than what you normally display in your web-site.....
R.E. (ha, ha) With our deals we may even sell you item for
Rs.1000 or Rs.2000  less than what we pay you....
Me: WHAT ABOUT MY PAYMENT?
R.E. It will be done in a fifteen day cycle.
(Note: When I buy a good from somebody, I am responsible for the payment. I have an address and I am available all the time. Here somebody wants to take away my item/s and says "it will be done")
Me: Thank you very much. I will let you know. (The exit door is right behind you).
More later....

Sales and money inflow

Sales and money inflow.
===================

I have explained on scores of occasions to my staff and at times even to some owners of businesses (not that they don't know)
that when I sell an air-conditioner for say Rs.30,000 and get the money.....  only about Rs.1,000 or so out of that can really be considered as MY money ( that is to say the company or firm's money). The balance of Rs.29,000 or so is to be used to buy another air-conditioner to be subsequently sold.

Many people don't understand or don't want to understand this simple logic. They think that they have "made" Rs.30,000 and spend it off.

Well, one can do that. But that Rs.29,000 has to be recouped by some revenue stream - by sales or service revenue. Very soon.

If one does not do this exercise then what happens? (a) The working capital will get eroded. (b) The money owed to suppliers will shoot up. What could happen "one fine morning" anyone can imagine. Let us not go into the details.

Some of the new-age dealers are very smart (like the on-line shops). They try to sell more and more of units at very  low margins or sometimes even with negative margin (to keep the revenue stream (so called!) flowing. Many are in deep waters for this very reason.

All of the business' fixed and variable overheads has to be met with the "margin" generated by sales and service and after that some thing more should remain as reserve/surplus.

Then and only then can the business thrive!

Companies ahead of their time invariably fail. In the early seventies Sehgal Papers Limited came with a bang manufacturing paper Napkins. But the company failed. The first holiday sharing company failed. (But they came back some years later). TVS group started a chain of convenience stores. But again it failed.
And now I came to know about India Plaza.
The list is endless.

Let him be there !

This is something which happened twenty-five years back.

I was handling an air-conditioners dealership for my friend.  There was an ace salesman known to
us who would at times give some leads to us.

One day I told him that we should ask the salesman to join our sales team.

My friend immediately (part jokingly)  told me, "No, never do that. He will work for you only when he is there.
If you take him and pay salary, etc. he will start working for someone else".

This is a very bad thing and was a rarity.

Unfortunately today I find that more than 90% of the staff are like this. They work for our company,
but they give better service and put in lot of efforts to the customers, suppliers and more particularly
the other dealers.

Alas, duty and dedication to the employer is totally absent!

International motor-cycle manufacturer - Sriperumbudur

An international motor-cycle manufacturer in Sriperumbudur wanted five dispensers.

After allowing a decent discount, I told them delivery would be free of charges provided the order is for not less than five numbers.

Then they reduced it to three numbers. Still, I agreed.

But, wait, they reduced the price by Rs.1000 for each dispenser.....stating that another dealer had quoted that price.

I told them my price was final, but they could reduce Rs.500 per dispenser and collect it from my showroom.

No reply from them.

We have call taxis. Soon, it would be better if we have call transport vehicles which would charge only from A to B and not for A-B-A. Also, some consolidation of goods may help improve sales......