YOU CAN STRETCH THAT PROFIT MARGIN
– Radhakrishnan Pillai
(This weekly column will explore the relevance and application of Principles and Strategies of Chanakya as discussed in his 3rd Century BC treatise, Kautilyas Arthashastra, in Todays Corporate World)
It is but taken that a good business venture, or well-to-do person, has to have a good financial structure. Even Chanakya, centuries ago, believed that a good treasury is one of the strong pillars for successful businesses.
He had suggested,
He should secure an undertaking requiring little expenditure and yielding large profit and get a special advantage (7.13.31)
In other words: Control the expenses and keep an eye on the net profit or savings.
But how to become financially successful? Well, the following are some tips that will certainly help you in this:
- SPEND TIME ON BUDGETING
It is worth spending time on the calculations from the start. A businessman would need to calculate the time involved in the project and the numbers of persons required. A salaried person would be concerned with his goals and their financing. But both need to keep an eye on miscellaneous expenses that can occur. Finally dont forget to keep some extra money as buffer. If you are new to such an exercise take the help of seniors or experienced people.
- KEEP A DAILY CHECK ON ACCOUNTS
A discipline of maintaining daily accounts has to be introduced, especially in the face of deadlines and even routine activities. It may seem difficult in the beginning. But by doing that one will be in control every time. Successfully companies and persons always know exactly how much income received, how much expenses have been made, as well as the balance in the treasury on a daily basis.
- SPECIAL ADVANTAGE
Earn from your experience. If you are a niche player or a talented professional, make it a point to take advantage of the same and charge extra. Experts have the advantage of being rare in the market and lot of demand offers. This advantage has to be used! With less time in hand and more to deliver, it is better to charge the extra bit and mark up the profits. We see the celebrities doing that. So can you.
- CASH FLOW
This is the bottom line the most important factor to be taken care of. In any business or house, a regular cash flow is required. But the pipeline alone is not important, the conversion is. We have salaries/bills to pay, suppliers to be taken care and regular maintenance to be done. So be sure of your plan/path and build a model where the cash flow is on a regular and sustainable basis.
When financial stability is thus secured, you can take bigger risks, invest in new ventures and gamble a bit in unknown areas. For Chanakya and his book Arthashastra this was the basis on which a country became prosperous.
(The author is the director of ATMA DARSHAN, a company that provides services, including spiritual tours. He is a management consultant and trainer. Those interested in having his sessions in their respective organisations can contact him on +91-9820374796 / 9821152537 or mail to radhakrishnan@atmadarshan.com)
Read more:
Introduction of Kautilyas Arthashastra
Management Fundamentals in Kautilyas Arthashastra