Bijness

We love what we do. Why else would someone put themselves through what we do in this life?

The Travel, The Hours, Inhospitable Locations and worst of all - the Idiots. After waking at midnight to catch a pre dawn flight - to get into a smelly car on a cold dusty airport and bump over 100 kilometres to the venue gate to be told by a voice behind a faded glass window ‘aapka naam list pe nahin hai !’

It’s humbling to see how many ways my (unusual ?) name has been mangled on a security list. Vibha Pulka, Baraf Puja, Giraffe Pochgaya; are standout examples.

And so it goes. We battle for our creative independence, trying to meet our clients expectations while dealing with so many hurdles to get to where we want.

That is our life and career and business. We do this as well as we can, simply to earn the privilege to get up and do it all over again the next time.

Ah - ha... WAIT! We have forgotten perhaps the most important element that will make our business and careers thrive - Investment.

In all our hustle and bustle of getting ahead I have seen so many promising enterprises drown under their inability to service their investments.

Hastily people point out that ‘What nonsense’ - their business still exists. So they have invested wisely. If that is your yardstick - then Good Luck and God Bless. But if the idea of actually making money doing what you love interests you, read on.

Let’s understand some basic concepts.

1. Turnover: This is the total amount of money our businesses earn in a year.
2. Direct Expenses: the expenses we incur that are directly related to the business we carry on.
Means that it is directly associated with a project.
3. Overheads: Expenses we need to make for the routine running of our businesses - telephone bills, rent etc.
4. Profit: What remains of our turnover after deducting all expenses and overheads (Incl. taxes)
5. Investment: Our spending on any item that will help us generate revenue in the future.

To effectively manage our businesses the manager must know on a week to week basis the exact total of each of the above heads -IN TOTAL. A good manager will also know how close the business is to the BUDGETED figures for the year.

For the manager to be truly coveted - he will know each ratio that the above heads has in proportion to each other; because that comes with the ability to tweak the operations to meet the business’ goals.

Too often I hear sneers of what a waste of time all this is. Give the figures to the accountant, pay your taxes and everybody’s happy.

If I have not already lost you I urge you to consider just one point. If you do get your balance of these concepts right - and are aware of the balance your companies need to maintain - you could save lakhs and hours of your companies time. Most importantly you could save your companies future.

In my experience the typical life cycle of an event business seems to be.

1. First Five years: Work Crazy Hours at crazy prices and make a name in the market.
2. Year 3 - 7: Make huge investments into people or equipment.
3. Year 7 - 15: Have so much equipment - No place to store it or have people to effectively manage it.
4. Year 15 Onwards: Get bogged down by details, owners lose interest, slow fade into just staying afloat. Equipment lying wasted and impossible to sell.

I see this pattern repeat itself countless times. Just a handful of companies have managed to dodge this curve.

More despairingly - I have not seen a single company being sold at a fair price to some young energy that has built on the founders past to grow into another form and stay on top of the market. Not one single company (that I know of. Please prove me wrong!) has managed stay on top of changing business cycles.

Which means that every company must spend its formative years learning the ropes of being a business. In my view that is the single reason why we have not seen a breakout success. Some event management companies have done it. Their present avatar is unrecognisable from what they were when they started out. Their owner or manager roles have matured into functions that have grown. Responsibilities that have enlarged.

How many owner managers of event technical companies can truly say that? Sure, as you have grown you may have more professional help. But understand that you are still making the same decisions you were making when you started. More worrisome the parameters on which you are making your decisions are still more or less the same.

Be true to yourself. If you are out of the cycle - You are blessed. If all of what I am writing is gobblygook - do yourselves and your businesses a favour. Ask for help. Be assured that you will benefit from the lessons you will learn.

It is a truism that a person that is technically skilled or creatively gifted is usually bad at maintaining accounts books. But I urge you to find somebody who can do them for you so that you know when, and where to invest your time and your money for maximum benefit.

Most importantly - know when is the right time to bring in the right energy at a fair price to carry your business forward so you can stay ahead for as long as possible.

My Best to all of you who undertake this journey.

(The views expressed by the author are his own personal comments and the magazine does not subscribe to them).