Every morning, without fail, Appan would share business advice with his sons. His business sense defined him. He lived, breathed and obsessed about business, morning, noon and night. His illuminating lectures were peppered with parables, proverbs, anecdotes and insights drawn from experience. One by one, my siblings would sidle away, leaving me as his sole audience. I didn’t mind, because I liked listening to him, and remember his observations to this day. Of the many things I learned from my father, financial discipline was – and remains – of the utmost importance.
He repeatedly emphasised that “finance is the lifeline of any business”, so a “core understanding of finance is mandatory if one wants to become a great businessman”. To that end, a sound grasp of numbers was essential, he said. He could mentally tabulate the income, expenses, assets and liabilities of all of the various businesses he operated. Numbers were his best friends. He was a great believer in frugality (except in his charitable efforts) and kept his personal expenses to a minimum. He did not allow himself any luxuries.
“Pala thulli peru vellam” (many a little makes a mickle), he would say, exhorting us to keep track of even the most trifling expenditure. And when it came to negotiating prices with his suppliers, he was uncompromising, no matter how small the amount involved. He acted as if he were as accountable as any of his employees, rather than the proprietor of the business. Later, I learned through experience that this approach not only helps in cutting overheads but also in inculcating an awareness of financial controls and discipline – not just with respect to employees, but for my children as well.
Appan taught me a measured approach to business decisions. “Aattil kalanjalum alannu kalayanam” (measure is a treasure), he would say. To this day, I have no hesitation in committing a fortune to a new venture, but the return on investment, in terms of my personal well-being or that of my business, is meticulously calculated beforehand. I am not risk-averse by any means, but again, my decisions when confronted with a speculative proposition are based on a careful reckoning of the projected outcomes.
Another of my father’s tenets was financing through loans. At a time when the middle class was deeply conservative borrowers, he was not averse to debt. The umbrella business was highly seasonal – although manufacturing went on all year around, sales were largely limited to the rainy seasons (Kerala has two monsoons: June to August, and October to November). This put a lot of pressure on working capital. So, Appan would raise funds to accelerate umbrella manufacturing before the rainy season through borrowings. This included “key loans” from banks and personal loans from various sources. As soon as the season was over, the money accruing from sales was used to settle with his creditors.
I remember how restless he was until he had repaid every last loan. Paying creditors on time, preferably before the due date, was his abiding principle. As a result, he pointed out to me, they did not hesitate to lend to us again. This translated into long-term trust and work associations. In short, he taught me that debt is not a liability if the funds are used wisely for the business. This learning was to prove invaluable later in life.
When I wanted to expand my business but was strapped for capital, I took a series of tactical and strategic steps to attract loans in order to fuel our company’s growth. The expansion of my business has always been on the strength of borrowed money. Conversely, my father was cautious when extending credit to customers, although it was the norm in the umbrella business. Having been faced with several bad debts during his entrepreneurial career, he didn’t believe in it. “Cash is gold. Don’t give credit; it is a bad practice,” he would say. Once, Jos got into trouble for giving credit to a customer he did not know.
“Who is this person to whom you have given credit?” my father asked.
“His name is Moustache Antony,” replied Jos.
“What kind of name is Moustache Antony? Who is this person?”
“His first name is Antony and he has a moustache,” explained my brother, adding, “we have his signature.” Jos was thoroughly nervous by this time.
“Fetch it,” my father snapped. The customer’s signature turned out to be illegible. “Can you make out his family name?” asked Appan.
Jos shook his head.
“Then how will you recognise him?”
“By his moustache?”
My father laughed. “One day, the moustache will be gone. Then, won’t the money also be gone?”
Jos had no reply, so he just hung his head. I took no satisfaction in Jos’ discomfiture – after all, any of us could have been in his shoes. I had made my own share of mistakes. But I internalised the lesson Appan had sought to impart to his sons, and have always been cautious when extending credit.
According to Appan, the four pillars of a business are: quality control, rigorous compliance (everything has to be done through legal channels, in strict conformity with regulations), price discovery and excellent customer service. He never compromised on the quality of products.
Every aspect of umbrella manufacturing, for instance, was explained to his workers in minute detail so that it was clear to even the meanest intelligence. I remember his training sessions, during which he would pick up a sample umbrella, open it and explain the quality parameters. He would point at the canopy. “Look at the cloth from which it is made. See the mark. This is first-class Century mill cloth, so not even a drop of water will go inside. Now look at the iron frame, with the long ribs and the short ribs. This is a frame made by the Champion company. It will not bend easily. Here is the shaft. It is chromium-plated, so it will not rust,” he would say.
To sum up my father’s philosophy in a sentence: he put business before self.
After my academic career came to a premature end, I began to work with my father full-time. As always, I was the itinerant one, ever ready to hop onto my motorcycle in pursuit of some task or the other. I worked hard, but I also played hard, and managed to find time for travel and adventure. One of those exploits remains etched in my memory forever.
Excerpted with permission from Spreading Joy: How Joyalukkas Became the World’s Favourite Jeweller, Joy Alukkas with Thomas Scaria and Nidhi Jain, HarperCollins India.