Saturday, August 4, 2012

Are there any lessons from the death of Mr. Lalit Sheth ??

Our heartfelt tribute to Mr. Lalit Sheth (Owner of Raj Travels). This is very unfortunate incidence and shaken many who are in business world.

Are there any lessons entrepreneurs can learn from his sudden and  tragic death ?

Well I think many.

Borrowing is easy but its servicing of debt and repayment of debt drown many families. Be it farmers in interior Maharashtra or entrepreneurs like Lalit Sheth, unmanageable debt is a killer.

We have many many cases of NPA and over borrowing and situation is close to alarming. As long as cash flow is sustained (not necessarily profit) one would not realise the gravity of situation.

How analysis of viability of the project is critical and me too kind of approach is disastrous. I have also known many such cases where entrepreneurs merely on the basis of gut feel ventured into the project , borrowed heavily than the project can sustain and ultimately  they had to sale their even their personal assets , faced legal battle to save their mortgaged home and suffered socially enormously.

Lenders and bankers are also not playing proactive and supportive roles while lending and during the tenure of the loan. They have access to the critical data and can very well play a vital proactive role more than just collector of interest and then filing suit when something goes wrong.  Prevention of foreseen disaster is a joint responsibility.

This kind of financial status is also very difficult to manage socially. There is a club run by a CA made up of entrepreneurs who are facing bank’s action and whose assets have become NPA. This kind of club helps their family members to realise they are not alone and learns how to face the reality and even come out of the same also.

Having a strong internal CFO is a must these days. I know many entrepreneurs in SME segment who do not understand the reading and implication of their balance sheet. Its very dangerous. Entrepreneurs must know their financial status i.e. actual and not fake as shown to bankers /tax authorities. Alternate MUST have CFO, absolutely dependable and proactive. He must see problem coming, warn the management /owner and know the corrective measures. SEBI is making efforts to spread investor education on a large scale but there is also strong need for entrepreneur education.  Everyone is working for money but ignorance about its PLAY is wide spread.

Last but not least, I do not know what is the brand value of the Raj Travels? Must be very high. Such a great asset could have been leveraged to taken care of liabilities, atleast some.  This is where CFO or Investment Banker can be of great help. Do you know what your real assets are !!!

This is written merely with the public information about Mr. Sheth’s grave financial situation we all have from news papers. No advice or analysis of his real situation. This write up might benefit some readers.

Wednesday, August 1, 2012

Who is Speaking ? You or Your work?

Either you or yr work has to speak up. Yes either MUST speak. 

There are two kinds of brand building for all : self and product / services. 

One is self promoter by its sheer nature or strategy. Aggressive advertising , marketing , self promotion , self talk etc. Making all out effort to be known among the target audience. 

Second way is to do a kind work that speak for it self. It also requires speaking but here work speaks. Users of the work will speak and spread the word. When a company creates scintillating customer experience, its customers speaks. There was a saying that it is the best selling author and not necessarily best writing author who sells. However in times of powerful social media its the best writing authors will become best selling. Only sellers without the best content will be difficult now. 

It is not always necessary that best sellers are not best content wise, however when users speaks rather than self /company , people believes most. Self sellers can be successful but when work sells - person and product not only reach up to the top but command respect also. 

We have two shining examples of person whose work always spoke more than the self and they are on the top of their class : Guess?  

Mr. Amitabh Bachchan and Dr Manmohan SIngh. Both r introverts , speaks less but cud reach to the top , sheer for the kind of work they did. You may add examples on both side. 

Are you or your work speaks more than you?