MISTAKES ARE GOOD, SO ARE LOSSES – ITS THE ONLY SOLUTION TO WIN

This is again something that we (parents, mentors, teachers etc) fail to tell our kids that its only natural to make mistakes, encourage them that they experiment, learn, and grow. That’s how a baby also learns to walk, he/she cannot even stand up, without trying to tumble & crawl

This process of constant encouragement must start from the very early formative years, at home, while attending schools, at universities, and at place of work – No one would mind if we enhance the selection criteria while selecting most deserving kids, even though its being most discriminatory, but its not going to hurt kids the way “negative, abusive, demeaning  remarks” do to one’s self respect

Every banker, charity knows the significance of developing SME businesses, and the benefits to reach out to youngsters at the grass root level, so if there is a genuine hunger, and desire to eat the best mango,  its only natural that we give all the attention to provide right nutrition & care to the tree during its entire life cycle

All I am trying to make charities, banks, NGOs understand, that this is the same formula they should adopt while developing SME & youth business ventures, please dont cut them down if they fail to bear fruit the first or the second or the 3rd time. All that’s required is our careful, matured evaluation to make sure that the person, we are putting our time & money on, is hard working, responsible, good family background, self motivated, ambitious, then committing little money on small 100 small businesses, in regular instalments is absolutely safe, much safer than dishing our millions to 1 corporate client

I have seen dozens of times, when SMEs, full of potential get verdicts against their life from banks on seeing small losses. It maybe a routine decision on part of the bank, but that person loses his/her hard work, confidence to stand again, leave alone losing seed capital, because the funding bank would have first right to reclaim its loan amount plus interest from sale of assets, which in some cases force an SME to give away their house to the bank as well

I ask all our champions SME bankers, what do we call this? an incompetent, untimely, irresponsible reckless business decision? or “good governance” and/or “risk management” as they call it? that’s being totally inhuman, taking hasty decisions at the cost of ruining business, country’s economy and above all shooting down the entire household

I am also addressing the so called “banking regulators”, the central banks & SEC, that please be very responsible & conscious of the consequential damages that each single family has to face, in the event their lending bank’s sword falls on them. We can always cut down on the risk exposure by lowering loan amounts, and even get focused on only taking up trading ventures with short turnaround cycles so we keep funds moving all the time, its like taking up a position between standard SME size & typical micro credit situation, it may enhance operational costs but its worth the effort as results are guaranteed

Again, we go back to the same solution, we need “father figures” and not just another 9 to 5 banker who comes to make money during the day, no matter what happens to the client. Smart bankers wouldn’t get offended by my harsh remarks, instead, its an opportunity to set right footing and take advantage of the wide gap, which may not remain there for long

 

 

Women’s role in the Development of a stronger & sustainable Society

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We (men) talk of women liberation, we hold seminars, organize events to project women the very best way possible.

We also preach democracy and education for our girls no different or inferior than boys, however in all honesty, we fall short miserably at home, contradicting our actions being projected outside

I wish to remain progressive without getting into unwanted criticism or throwing dirt on anyone, because its going to help us only when we start a healthy debate, identity our weaknesses to help one another constructively

The relationship between husband & wife is like 2 ends of a bridge; we cannot build a home unless we tie both ends firmly, and continue to strengthen the bridge by keeping love & affection paramount. It’s equally critical that our teachings and words of wisdom to our children compliment our actions

Most husbands let their wives handle and control all domestic matters solely without any interference, this ensures discipline and harmony perfectly. It’s important that we identify a potential high risk situation here, husbands at times get carried away to the extent of being disrespectful to their wives on petty homely issues, this attitude puts a dent in maintaining peace, leave alone putting children under stress. There’s something husbands should realize that they must assume greater responsibility, demonstrate maturity to handle domestic issues with a kind heart. However, this must not be taken as weakness by wives, its pure ‘submission’ to let the family continue enjoying the best environment. Husbands/fathers on the other hand would endup gaining more respect from wives and children alike. It means, RESPECT cannot be demanded by force, instead, we have to earn it, through exercising patience, tolerance and love ONLY

Democracy, whether practiced at home or outside, is an ‘ESSENCE’ of maturity, tolerance and responsibility together with high sense of “taking ownership” few points to ponder

A) we cannot abandon our family in a distress situation
B) we cannot just pick and choose good moments, we have to live through bad times as well
C) can we preach democracy, knowing we become dictators at home?
D) we cannot gain respect without being humble and understanding

GROUND PREPARED TO ADDRESS REAL ISSUES

STRONGER MOTHERS ENSURE STRONGER FAMILY VALUES – if Allah has entrusted the biggest responsibility on women to be responsible of carrying a child inside her for 9 months, followed by extreme pain during childbirth (science has proven that the pain is equivalent to fracture of 43 bones). Once the baby is born, mothers embark on a long journey that lasts nothing less than 15 yeas of round the clock devotion and care MULTIPLY BY THE NUMBER OF CHILDREN EACH MOTHER CONCEIVES – what does this translate into? There are several relevance to extract;

1) women are much stronger, mentally than men
2) responsibility, maturity, affection comes naturally to women (a decision taken by Allah Himself)
3) women have far greater ability to exercise tolerance and patience (again a Gift from Allah)
4) no one will debate that women are the best teachers
5) best listeners, counselors are women

Way forward… It’s time, we (men) stand up, thank and honor women with all our heart for being the sole pillar of existence in our homes, practicing love, patience, tolerance in our lives, being solely responsible for our children’s upbringing and utmost care

It’s imperative that women be given high ranking positions, we must take advantage of their better sense of judgement, consult them before taking key decisions, respect their opinion, see them as a blessing from Allah. This change in our mindset is not just going to ensure stronger societies, it will also lift depleting confidence in young girls who either endup being victims of our harshness or they become rebellious and get corrupted, morally. Who’s to blame? Our own shortsighted attitude, unfortunately

Let’s not defy nature, if Allah can entrust women with such huge responsibilities, its only natural that they be given their due share of respect, place in our societies, we treat them with kindness because what we do outside our homes is not even a 10% match against what’s being done inside

I request all responsible parents, children, youngsters to share their opinion in order to build resources and joint efforts to make this dream a reality

May Allah give us wisdom and strength to bring all of us together as one family of Mohammed (Peace be upon him) Aameen

Right Attitude – SMEs, Women & Youth enterprises must present themselves as opportunities rather than seeking Sympathy

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Mainstream corporates call it product development, market positioning, capacity building, the list is endless. However the minute small medium enterprises run by women, young entrepreneurs go out to seek business, they are being looked at as if there are seeking charity, this unkind behavior from mainstream players whereby they assist smaller businesses (if they assist as 8 out of 10th times they make excuses or simply get rude to the extent of showing the door)  have gone too far, that they actually believe, a huge favor is being given to the ‘less privileged’

As much as we condemn this situation, its also critical to identify the actual problem so we address and solve this never-ending dilemma. In my opinion, no one can abuse or be rude to us, unless we allow that person in the first place. It’s not difficult to relate this with today’s SMEs, its no secret that a small business owner lacks self confidence when he/she tries to meet a banker or a big customer to discuss business across the table – let’s question ourselves, do we stand a chance to make an impression? Not at all! It’s a non starter, the minute we step into a hifi office building, we get intimidated by our surroundings – its pointless to debate if its a deliberate move on part of corporate giants or its just an inherent shortcoming on the other side because bottomline remains, SMEs lose the race before its started

If I can be honest, the solution if all of us are able to identify would not only benefit small-scale businesses, its infact more profitable to bigger companies to work with suppliers and buyers with low overheads and less appetite. It’s a win-win situation for all

I’m taking liberty to address SMEs – why do we get intimidated? If we have confidence in what we are selling, knowing its also other party’s need, then we must meet on equal terms. All we need to make sure, we must be well equipped to speak the language other parties understand. I’m not talking in literal sense, we must study the mindset of the person or the company we are meeting with so we know their values and long term objectives. It’s like going to an interview with a relaxed attitude, knowing the person we are meeting is not our boss to be! It’s imperative to set playing rules upfront, when we meet a business associate we must be respectful but not at the cost of losing our own ground, meaning we demonstrate confidence and maturity with a clear message that being respectful is mutual

Realistic/Accurate Business Forecasts | SME’s lack of understanding & Possible Imbalanced Bank Credit

This is one area small business operators find very frustrating, leave alone getting excited to find out what they should earn in the new

year, in advance. Its a shame, banks claiming to be SME specialists fail to understand the root cause of this inherent short coming in majority of their potential customers. In my opinion, problem doesn’t lie in lack of understanding on bankers part, instead, its the “lack of responsibility” attitude which is only looking to attach “any forecast” to the applicant’s file just to satisfy documentary requirements. Few things that needs to be taken care of, either on bankers or SME operators’s part with only 2 benchmarks to focus on- CAPACITY & BUSINESS IN HAND

  • finding the right capacity to delivery each month – in order to pin point a realistic number
  • once capacity is known, see past months actual performance to gauge as to what percentage of capacity, been utilized
  • check for factors responsible in “under capacity” situation
  • set realistic growth, month-wise, giving room to progress steadily in order to reach optimum capacity levels – because if someone is hitting 10 laps, knowing he/she can do 15, there is no way one can achieve 15 overnight – small steps needed to gain good momentum

All above parameters are related to understanding & setting accurate capacity levels, lets look at the other side of the coin – “business in hand”

  •  no matter what our capacity is, bottom line remains that what volume of business does one have at the beginning of each year, so as to insert actual targets
  • being in this situation, one has to work backwards – since business in hand is known upfront, we simply divide it in months – again, 2 sub benchmarks, a) we divide business in hand by our own monthly capacity to establish realistic timeline to finish each job, or b) we get restricted time line from customers, in this situation, one needs to see what’s the best possible volume achievable given our capacity available each month – this will surely save us from last minute embarrassment & penalties in the event we fail to deliver promptly

While we discuss capacity & business, its equally important to establish accurate amount of gap between what SME owners has as his/her equity and what is there to be taken in bank support – this is critical, knowing no one refuses more money coming in – however in the absence of establishing accurate capital requirements, the ability to service bank credit remains a big question mark – it is therefore imperative for bankers & SME operators to realize the need to understand business credentials, in order to ensure sustainable growth, leave alone saving bank from losing out its capital deployed – its being most negative on bankers part to try seek beefy collaterals at the time of sanctioning loans, which in most cases is either business owner’s house or his place of work – meaning, if something goes wrong God forbid, bank would try to extract the last drop that is there to come out clean, lets not discuss what would happen to the business owner & his/her family

Its only being human to realize one’s responsibility to his family, friends, business associates – I don’t think that’s too much to ask dear friends

 

Democracy in Development of Emerging Economies – Its role in Progress, Socially & Economically

I have been wanting to write on the subject for a while, today while reading this blog http://blogs.cfr.org/coleman/2012/05/10/mobile-technology-and-global-economic-growth/ I am writing this blog more under a reflex action situation as I couldn’t even finish reading this article

Being part of the emerging economies, having lived, worked in developed economies also, its fair to boast my knowledge & understanding when it comes to judging if the glass is half empty or otherwise. Having said this, being a motivator, as I am, I just cannot see the glass half empty, so lets build a positive outlook while identifying inherent threats and short comings – like I always say, its good to criticise when you also give solutions

Whenever one talks of democracy, things that instantly ring a bell – freedom of expression, free judiciary, accountability, public services, sharing, vote the right person & the list goes on

In all fairness, are we witnessing progress in the name of democracy? do we, as men, give freedom of expression to our women? leave along giving them right to take a decision? why cant we understand that if a Mother can carry a baby to full term, spend sleepless nights, toil the entire day, keeping our wishes on priority, making home a place worth coming back each day after work – why cant we entrust them with giving us hope to make our countries our homes! irrespective of cultures, most families in 3rd world countries give priorities to their boys when it comes to education & health, it is the mindset that we need to address, make parents believe that girls are equally important, if not better

When we talk of backbones, we never visualize how well a country would evolve, if we target youths & women – they are our backbones, no house can turn into a home without mother, wife, daughters, & boys of course – why cant we see this happening on a macro level, and ensure long term sustainability across the board

Teachers, counsellors tell us, there is no shame to learn from a junior student or a colleague, so why cant be focus on women! its high time, we address the problem in its true perspective! let our women be given respect, confidence, allow them to express their opinion, encourage them to take decisions – always remember, women are better managers by default, they are disciplined, more matured – even science has proved that women can think of atleast 3 subjects at a time, men can do only 1 🙂

Why most SME Banks are failing worldwide as an Industry?

This is no secret that banks across the globe are eyeing small medium business customers since early 90s – but most of them have or are failing to make an impact, leave alone make money on this “niche portfolio” as they call it

In my opinion, they will continue to struggle or may just bow out of the race – what is actually needed, to even make a start, is to find the right set of minds (not necessarily bankers) who understand the nature of SME business operators, their inherent shortcomings, inability to develop hifi business plans, lack of exposure of international markets – another very important ingredient that we need to look while selecting our “relationship managers” is the heart, the desire to help those aspiring entrepreneurs desperately in need of a” mentor” and not just a commercial bank

It is critical that banks first send their managers to get trained, oriented to be able to tune-up to come down and be able to sit on the ground if need be, in order to let the person feel comfortable to share his vision with his potential banking partner

Folks, please, we cannot sell a Merc without an engine, and we cannot leave our home, aiming to travel, without knowing our destination – it really doesn’t make sense to try make the targeted “SME” speak our language, it must be the other way round, we need to learn to speak their language first- now, having tuned our bankers, its time we show them the road map so they have a clear vision and a good sense of direction to make a start – 2 things need to be focused on; CUMULATIVE IMPACT & CAPACITY BUILDING

As a finance house, one should stop looking at charging hefty mark-ups which we usually do to satisfy our risk managers and secondly, knowing that the customer doesn’t have a choice so whatever we ask, he/she will agree – that’s poor judgement – there are millions of ways to secure one’s credit, instead of charging a fixed percentage, we come out as partners, as take a percentage on each turnover, and help customers to do as many turnovers as possible – it must be realized that someone who has taken the initiative to be in business with all his heart, risking way over his limits, doesn’t have to be told that its high risk business, this will only kill his motivation – responsible, humble bankers, not smart bankers, if there are, would not let their small customers fall down by making their presence felt each day by being mentors, advisers, counsellors and a guide to show the path ahead

From risk management perspective, when we are spreading, say  a million dollars in 1,000 customers to do simple trading, who also come with their seed Capital of say $1000, our risk is well spread as the customer is also carrying half of the stake, we try to make sure there is atleast 1 turnover per month  and if expected profitability is, say 20%, we ask him to let us take 3% of total capital as partners, which would fetch us 6% per turnover, under a fully asset-backed situation

We achieve 2 objectives – we help 1,000 customers to give us a cumulative annual turnover of $24 million & cumulative gross income of $4.8million out of which banks pick up $288,000 on a credit of $1,000,000 or 28.8% pa – banks who are able to understand the dynamics, can visualize the infinite potential of ensuring sustainable growth and income from this small, yet most profitable clientèle

 

 

TRADITIONAL MERGERS & ACQUISITIONS: CAN YOUTHS BE BENEFITED?

NOT JUST A RECIPE, LIMITED TO BIGGER COMPANIES

Mergers & Acquisitions often relate to something which is only for major corporations in order to consolidate and further strengthen merged resources while bringing costs down significantly. Regulators such as central banks have used this tool to consolidate inadequately capitalized investment banks, commercial banks, mutual funds etc., which should not have been licences in the first place

Likewise pharmaceutical giants such as Sanofi & Aventis, automobile companies such as Mercedes & Chrysler teamed up few years ago along with other major corporations who opted to join hands with other market leaders rather than waste money on competition to gain bigger market share. Recently we have also witnessed major service providers such as Travelers Group & Citi Corp, then we have AOL & Time Warner. List of all major M&As can be seen on the right end of this blog

Post merger scenarios are not much difficult to forecast in bigger companies as they have ready markets, presold brands, deep pockets, access to strong market makers etc., which usually give them the leverage to come out much stronger while taking advantage of combined power of the merged entity. So everyone gets a portion of the bigger pie, including the small shareholder who sees growth in his value of shares as well as better dividend payouts

Having seen the better side of mergers, there is an equally challenging side which no one denies, that is the list of liabilities, claims, litigations, stuckup inventories etc., which experts may agree to overlook at the time of setting a fair price tag to the merged business in anticipation of handling such isseues without much of a problem

Lets now try to visualize a situation if we try to use only MERGERS in development of Youth Business for following reasons, assuming we team up 100 Youths in one project

a) per youth Investment of $5,000 doesn’t look adequate to gain much mileage in respect of getting factory supplies, no chance of getting price benefits, inconsistent supply chain, costly logistics, high selling costs etc., BUT when we multiply this with 100 youths coming in with more or less the same seed capital, this group stands at half a million dollars worth of seed capital, which would end up being a lot more potent, besides getting a team of 100 heads & 200 hands to work and push through for common goals & dreams – this scenario can make more business sense if banks could come in and offer low cost trade finance so the equity side gets complimented with equal amount or more in bank support – certainly food for thought