Money Literacy

Isn’t Buying Unwanted Things a Social Crime?

Scene: INT: Pavilion Mall in Pune – 1st Jan 2020, Eve. Several mega-brand stores were witnessing encouraging footfalls. We visited a couple of stores.   There were plenty of products and brands on display. Most of the products we never used were attractively placed. It was tempting to buy several of them. We didn’t buy any but decided to buy some of them as and when the occasion … Continue reading Isn’t Buying Unwanted Things a Social Crime?

Best Owner

Are You the Best Owner of Your Business?

Mergers, acquisition, sell-off, buy out and takeover are common with large businesses and start-ups. Every now and then we read this news. However, there is no such large market for SME businesses. Selling a business is a good option in several circumstances. Holding on to it for emotional or non-strategic or non-financial reasons is not a good decision. A simple one-liner is when you can’t … Continue reading Are You the Best Owner of Your Business?

Business Growth

Do You Know You Are One Of The Hindrances To Your Business Growth?

“Only the paranoid survive.” Andy Grove, former CEO of Intel Every entrepreneur is out in the market to grow his / her business. Once you wear a hat of an entrepreneur, your vocabulary has some fixed words like capital, payment, customers, deal, business, growth, loan, market, marketing, and sales. Check what you speak every day and on every occasion.  You become a 24 X 7 entrepreneur. … Continue reading Do You Know You Are One Of The Hindrances To Your Business Growth?

Working Capital

All You Need to Know About the Working Capital and Business Success

Working capital mismanagement is one of the main causes why a small and medium business fails. This is also one of the main causes of industrial sickness.  Working Capital is considered lifeblood of any business. Understanding the key data affecting working capital, how impacts the business, how it can be better managed, what are the sources of working capital, cost of working capital all are very important aspects of the … Continue reading All You Need to Know About the Working Capital and Business Success

RBI ECB Guidelines

What You Need to Know about ECB for NPAs and Start-Ups?

Borrowing in foreign currency from an external source is a restricted activity governed by RBI.  For many years now I have met many entrepreneurs asking me to help cheaper money from a foreign source. Most of the entrepreneurs were not aware of ECB guidelines and therefore most were cheated by financial intermediaries. Huge advances were given by the entrepreneurs to these intermediaries in the hope … Continue reading What You Need to Know about ECB for NPAs and Start-Ups?

Excess cash Kills

How Can Excess Cash Kill Your Business?

Cash is King but it also kills. One of the companies hit the market with an IPO. Their Merchant banker advised them to raise more money than required. The issue was subscribed. Excess money they invested in unrelated business. That business could not succeed. The return on share capital could not match the market expectations. The share price reached below par. Since the share price was … Continue reading How Can Excess Cash Kill Your Business?

NPA

Is Your Business Suffering from Financial Cancer?

Mr. X, who was once a very dynamic entrepreneur engaged in the pharmaceutical business, is now under depression for many years. Family expenses and cost of two daughters’ education was borne by other close family members. His wife was doing some domestic work until both daughters completed their studies. Marriage of both the daughters was solemnized with the help of close family members. This is … Continue reading Is Your Business Suffering from Financial Cancer?

Opportunity Cost Decision Making

You Need to Know This Important Concept For Better Decision Making

When you opt for Cake against Ice-cream, you have sacrificed the experience of eating ice cream. When you opt for Watching TV over outing, you have sacrificed an enjoyable outing experience. Every day and in several matters, we choose one over the other choice. The choice we sacrifice in favour of the choice we make is the opportunity lost. This is why it is called Opportunity cost. This is … Continue reading You Need to Know This Important Concept For Better Decision Making

Key to Business Success

The Key to the Financial Success of Your Business

Every company aspires to become like Apple. Customers shall queue outside the store before the store opens, pay a premium price, wait eagerly for the next model, spread word of mouth, the product is a prestige symbol, huge company net worth, and mega market cap. To become Apple one can’t, ignore what Steve Jobs believed and said in the following quote. Customer Experience (CX) is … Continue reading The Key to the Financial Success of Your Business

Capital Structure

You Need to Know How Capital Structure Affect Your Profit

“Don’t spend Capital competing with people who are spending Profits.” Moffat Machingura The source of money you invest is very important. Do you do your business with own money or borrowed money?  Well, when you started the business, whatever source the money came from was welcome. But this has an impact on your business. The capital structure simply means the sources of money a company … Continue reading You Need to Know How Capital Structure Affect Your Profit

12 Important Reasons SME Business Loan Gets Rejected

12 Important Reasons Your Business Loan Gets Rejected

I have seen the happiness on the faces of many entrepreneurs when I placed loan sanction letter in their hand.  But loan rejection is not a happy state. Availing of loan is most business’s need for growth, especially for SMEs.  There is a limit up to which promoters can invest own capital in the business. Beyond a point, they need the support of external sources … Continue reading 12 Important Reasons Your Business Loan Gets Rejected

Interest Rate

The Impact of REPO Rate on Your Pocket and Business

REPO rate reduction of 0.25% is making the Indian investors excited. Investors believe this will trigger higher off-take of loans, higher economic activities. In reality, cheap money only can’t trigger more demand or higher capacity built up. There are several other factors. However, in this post, we will know about the RBI’s interest rate management. RBI manages liquidity in the market and inflation with REPO … Continue reading The Impact of REPO Rate on Your Pocket and Business

26 Sources of Capital – All You Need to Know

26 Sources of Capital – All You Need to Know

Once upon a time Capital used to be the scarcest available source of the business. Now the talent has taken over the top slot and capital has become abundant. But as it comes with multiple choices, which source and which type of capital is relevant for the business is another challenge. All forms of money are not equal. “Money is always eager and ready to work for anyone … Continue reading 26 Sources of Capital – All You Need to Know

Fatal Ignorance

Not Knowing Financial Ratios Can be Fatal for Your Business

“The number one problem in today’s generation and the economy is the lack of financial literacy.” Alan Greenspan Alan Greenspan is not true for personal finance but he is also right for entrepreneurs. Entrepreneurs whose success is determined by financial performance many times do not understand the nitty-gritty of finance. According to a recent survey by the National Financial Educators Council Americans squandered $280 billion last year due to poor financial understanding,. … Continue reading Not Knowing Financial Ratios Can be Fatal for Your Business

Marginal Costing

You Need to Know How Selling Cheap also Could be Profitable

One plate Dosa at a restaurant costs Rs. 90/- which Uber Eats delivers to us at Rs.40/-   This is a huge bargain for us. The question struck in our mind is how Uber eats and Swingy can deliver food at a cheaper price than the price we pay at the restaurant? We believe it as a promotional cost either the delivery company or the restaurant … Continue reading You Need to Know How Selling Cheap also Could be Profitable

Asset Liability Mismatch

All Money Is Not Equal & Entrepreneurs Need to Know This

“We were not taught financial literacy in school. It takes a lot of work and time to change your thinking and to become financially literate.” Robert Kiyosaki M/S ABC Enterprise is facing a liquidity crisis. The bank has sanctioned them working capital loan. In an emergency, they used the borrowed money by way of working capital loan for buying land and machinery. Since the money required … Continue reading All Money Is Not Equal & Entrepreneurs Need to Know This

Accounting Data

Do Not Let Your Profit Figure Fool You

“Accounting is the language of business.” Warren Buffett Profit and Loss account shows the profit a business earns. But this could be illusionary if the entrepreneur is not aware of the accounting. Usually, companies play with the profit to satisfy the bankers and to evade taxes. This is a fine balance. For bank projected profit is important and for tax purpose deflated profit dishonest entrepreneurs … Continue reading Do Not Let Your Profit Figure Fool You

Cashflow Profit

Dear Entrepreneurs, Cashflow Is Not Your Money

One of my known entrepreneurs used to enjoy a lavish lifestyle, bought a costly car, indulging in family foreign tours, and everything peripheral was also indicative of good business and profit. After one year, I came to know that he defaulted on bank loans. His account becomes NPA, and several private loans recovery issues cropped up. His affordability of all the lifestyle he used to enjoy was … Continue reading Dear Entrepreneurs, Cashflow Is Not Your Money

Benefits of Shorter Cash Conversion Cycle

CCC is the Ratio Every SME Needs to Focus On

Your heartbeat, blood pressure, cholesterol all levels you keep under check. Though competitive business atmosphere makes it difficult to keep all these health parameters under your control. One business ratio though can help you to keep your above health parameters in check. Most SME suffers from a cash flow crisis. This is their daily struggle. The reason their health deteriorates is mainly be attributed to … Continue reading CCC is the Ratio Every SME Needs to Focus On

Indian Entrepreneurs

4 Reasons Why Entrepreneurs Need to Save

Story: Recently I saw a balance sheet of an entrepreneur whose business is doing a turnover of about US $ 15 mn and good profit. However, his personal Balance Sheet did not reflect any substantial investment other than his house. The loan of another entrepreneur known to me become NPA. He was making a reasonable profit for many years. However, he did not have any investments outside his business … Continue reading 4 Reasons Why Entrepreneurs Need to Save