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Opinion

In business of making money, what looks like loss is actually gain

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Business money loss gain

Mir Saqib

mirsaqibali@gmail.com

Business is primarily money. We are in business for making money that is precisely the sole reason or motive for doing business. Over the past century, the way of making money through a business has changed. It has made the orthodox accounting methodology as primitive and obsolete. Some businesses give instant money and some make a platform for the next stage which will lead to money. In some cases, cash flow is considered a profit.

There are a lot of facts and figures showing the 21st-century business model as dynamic and unpredictable to normal accounting systems and business logic. Most of fortune 100 companies in the 21st century have made asset appreciation or valuation of the company as major sources of making money irrespective of whether the business gives profits or not.

Amazon doesn’t make profits, but has ample cash flow and reserves to make the company run for centuries, and is regarded as a most valuable company of our times in the world. Again, remember they don’t make profits according to accounting methodology. Apple makes most of the money by conversion of goods and service and branding them as high-end products. Making huge money from is reflected and acknowledged by accounting methodologies. Coca Cola India didn’t show any profit till the end of the last decade but would spend a fortune of money on marketing and advertising. If the marketing budget would have not been there, the company would have surely been in profits but they intentionally did so and kept a huge marketing budget. If not spending so much for marketing, they could have shown profits which normal accounting would have suggesting but they didn’t prefer that.

Now, Coca Cola is the most valuable brand in India and is in making huge profits as on date.

All of the new-age companies are making huge money but all in different ways. As we said earlier we are in business for making money and these companies make it no matter it does sound valid and sane to accounting methodology hardly matters.

In the new way of looking at businesses, “what may look as the loss may actually be a gain’.

The horizon of business has changed, earlier trading was part of business, now trading is considered as a vague term, and has been sub categorised in infinite subsets. A few decades earlier, buying a product at Rs10 and selling at Rs11 was considered as a good business practice but nowadays buying at Rs 10 and selling at Rs 9 isn’t considered bad practice either. Imagine two competitors B1 and B2 selling same product, both having cost to the product at Rs 10 while B1 is selling at Rs11 and B2 selling at Rs 9. Over the period, suppose B1 makes a profit of Rs1000 and B2 books loss of Rs 2000 (B2 is selling at a low price so sales will be high compared to B1). As B1 will try to compete with a close competitor in terms of sale and will drop his prices for next period to Rs 10.5 and as B2 is already selling lower than the rival competitor, will increase to Rs 9.5 and this will lead to B1 making a profit of Rs1250 and B2 loss of Rs1500. Over the next period as competition goes higher and it’s difficult for B1 to remain in business so furthers drop price to Rs 10 and B2 also increasing price to Rs 10.

So from here, we shift in the balance sheet of both the business. B1 making a shift from profit to no profit and loss while B2 goes from loss to break even. B2 managing to cut losses and going to profit-making the company to go on while B1 who is technically in losses and has no option but to shut down before it starts bleeding the profits made for years.

So B1 made a total profit of 2250 while B2 stands with loss of 3500.

As now B1 is already out of business with anticipation of loss for next period, B2 raises the price up to Rs 11. Now B2 is a major player and taking sales of B1 and makes the profit of 3500 compensating the losses incurred before. Now with B2 market leader and revenues doubled from the last period (revenues will include B1 share also).

Now B2 has an open field, even outrightly selling the business will surely fetch many more than Rs 2250 (as last periods profits were 3500) which B1 made during the full business period. One selling at below the cost of production looked so naive and stupid. But, in reality in present-day competitive marketing, it is not really so. The way of doing business has changed and it has changed for good.

In recent times, most of the business is about acquisition and valuation. In the old business communities like ours we have so much emotionally invested in business we tend to forget we are primarily in business for making money. In modern economies, lending from a bank for business has taken a back seat and investment from various private entities has found the way. The main reason for that is fewer legalities and ease to raises good funds from private or personal investors.

The private investors have huge potential in the valley, providing about billions of rupees in form of fixed deposits are sitting in banks with return merely at 4%.

Investor and businessperson should be made aware that investing in any business is purely for making money, emotional side to it, should be realised, won’t be of any importance to business nor to the promoter or as we used to call him, owner. That’s the reason in modern economies, the one who starts an enterprise is called promoter of the business and not an owner of the business. The term owner has become very feudal.

Both investors and promoters need to educated about what the business is meant to do. And long term and short-term investors can be used to raise funds for the growth of the business without a huge cost to the business as would have the same investment raised from a bank.

Expats and non-residents should be made aware of business in the valley and effectively made aware of investment option available.

There is huge scope for venture funds which will facilitate the business and investors.

Cutting to chase, the business is eventually about making money. But sometimes the entity you sell is a product, sometimes the promoter is a product and sometimes the business itself is the product. Whatever it should eventually lead to making money. As we are in the business of making money.

Opinion

The Golden Flames Of Autumn Chinars 

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The Golden Flames Of Autumn Chinars 

 Syed Aamir Sharief Qadri

The Golden Flames Of Autumn Chinars 

When God created this planet he embellished it with myriad colours so that human beings can see, feel and embrace them in different seasons. In addition to cool and warm colours usually, it is the green and white that represent seasons in Kashmir. The changing season brings new colours and in autumn it is orange, yellow, brown and red shades that dominate the scene.

How beautifully Albert Camus described the loveliness of the autumn season in a single line when he said ‘Autumn is a second spring when every leaf is a flower’. Contrary to this thought, many say all beauty ends at the beginning of this season. They believe this season snatches life from green plants and trees to look everything dull.

I don’t know what autumn looks like in other places of the world but in Kashmir, it is dazzling owing to a presence of a good number of chinar trees. The glory of this tree is something unique. In its praise, a famous couplet by Allama Iqbal is very popular.

Jis khaak ke zameer main ho aatish-e-chinar

Mumkin nahi ki sard ho wo khaak-e-arjumand

(The dust that carries in its conscience the fire of chinar, It is impossible for the celestial dust to cool down)

It is quite amazing to see the dance of autumn leaves that appear vibrant while falling from tall trees. Just like some people are happy to get drenched in the rain during monsoons similarly a few like to dance with the falling of leaves in the autumn season. Indra Gandhi the third PM of India often used to come to Kashmir in the autumn season to see the picturesque fall of chinar leaves. 

Platanus orientalis, The plane tree called Chinar in Urdu and Boen in Kashmiri.  The long-lived deciduous tree is said to have originated in the Balkan area of the Mediterranean region. It grows well in temperate latitudes and is widely spread throughout Eurasia. This tree outside Kashmir is revered by Greek and Persian culture. Whether chinar has an indigenous origin or was introduced by foreigners in Kashmir is still debated in the academic circle. Once cultivated this tree flourished in the supportive environment of Kashmir. 

The mystic saints Sheikh Nuruddin (RA) and Lal Ded have mentioned the name of this tree in their sacred works. The chinar tree planted by Sufi saint Syed Qasim Shah Hamdani in 1374 AD at Budgam was believed by MS Wadoo author of the book “The Trees of Our Heritage” to be the oldest in J&K. But the ongoing census and geotagging of chinar trees show some chinar trees to be 1000 years old in central Kashmir.

It should be noted that we get enough references about the presence of chinar trees in the valley during the sultanate period of Kashmir. But we also know that the Mughals promoted chinar on a large scale. They planted a majestic chinar tree in the gardens of Kashmir and gave it the status of a royal tree which remained intact to this day. 

The world-famous Mughal gardens are known for their majestic chinar trees. The three well-known gardens Nishat, Shalimar and Naseem Bagh in the heartland of Kashmir are full of grand chinars. Over 1200 chinar trees were planted alone in Naseem Bagh by the Mughals. Outside the city, Mughals planted chinars in the gardens of Verinag, Achwal, Dara Shikoh Bagh, and Padshahi Bagh in the Anantnag district. 

It would be quite interesting to call Srinagar the city of chinars. Besides Mughal gardens where chinars are planted in large numbers, one can see them everywhere in the city, on the banks of Jhelum, along the residency road and in the middle of Dal Lake. 

The entire region of Kashmir is dotted by shady chinar trees be it cities or hillsides. The kings mostly planted these trees in important locations. It was the common people especially Sufi saints who took it to the villages of rural Kashmir. 

A perfect example of beauty, this heritage tree is known for its gigantic size. Chinar is perhaps the only tree in the valley that can live for centuries. That is why the saying “Boen chi Gawah” which means chinar witness everything is very famous. This tree is a witness to history and holds a special place in the culture of this land. Under the shadows of this tree, many dynasties flourished. 

The beautiful design of chinar leaf is well acclaimed in the Kashmiri handicraft and wood industries. Every part of the chinar tree is valuable. The timber is used for making furniture, the bark is used as medicine, and from twigs and roots fabric die is made. Its leaves are used to fuel the fire pot locally known as Kangri. But above all the majestic chinar is known for its aesthetic beauty. The experience of walking on the red carpet lying under the chinar trees is pretty special. The sounds produced by the crunching of leaves under one’s feet are touching. With the onset of autumn, people throng to the valley in great numbers to feel the life-giving warmth of chinar trees. 

Boen-e-Shuhul, The cool shades of this tree are quite popular. In summer, people often take shelter under its strong and spreading boughs. Many people wish to be buried under the shades of this tree. Perhaps Sheikh Abdullah the author of Aatish-e-Chinar would have wished the same. Luckily he was buried in the premises of the historic Nasem Bagh on the shores of Dal lake in Srinagar.  

Despite being a state tree, protected by the legislation, the number of chinar trees continues to decrease. In the 1970s as per the official count, there were 42000 Chinar trees in Kashmir and that number has been reduced to a mere 5000 now. 

For some years now the government seems serious enough to promote heritage tourism by distributing saplings to increase the population of chinars in J&K. We should also plant chinar trees in abundance on chinar day which is celebrated on March 15 every year.

 To mark India’s 75th year of independence this year in mid august the govt announced to establish at Srinagar the largest chinar park in the valley by the name of Chinar-Zaar. The autumn of Kashmir can be made even more beautiful if the government take initiative to establish new chinar gardens in every part of J&K. 

A poet and writer, the author has done his MA in History from the University of Kashmir and MPhil from Punjabi University, Patiala. Presently, he is a freelance columnist. You can contact him at aamirsharief45@gmail.com

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Health

Lack of physical activity, stress affect well-being of children

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Lack of physical activities affect well-being of children

Need to impart healthy and active lifestyle among youngsters

Dr Taizeena Khan

Lack of physical activities affect well-being of children

Dr Taizeena Khan

World Health Organisation (WHO) defines health as complete physical, mental and social well-being and not merely the absence of disease or infirmity. At an early stage children not only need love and care, but also a proper road map for a healthy lifestyle. This road map should be devised by keeping in mind all the parameters of health and wellness. It should not only focus on the physical and mental health of our children but also on the social aspects of it. To achieve this goal we need to enhance the skills of parents. The health and wellness plan from the birth of a child will decide the future of our coming generations.

In recent years of my clinical practice as a physiotherapist, I have noticed more youngsters coming to me with musculoskeletal disorders. This abrupt rise of my younger generation patients, their lack of physical activity, unnecessary stress and lack of social set-up that could provide them with a platform to practice a healthy lifestyle at an early stage urged me to choose this topic today.

In recent years children as young as 12-18 years old have been coming to me with musculoskeletal disorders. While consulting/counselling these youngsters I have come to the conclusion that there is not only a lack of physical activities but also a lot of avoidable stress leading to the unhealthy choice of lifestyle in this age group these days.

To a large extent, I believe that technology has also played a great role in this. No doubt that technology has become an integral component of our daily lives. Technology has, to a great extent, made our lives easier but at the same time, it has done that at the cost of our physical, mental and our social lives. This all begins when we as a parent make a choice of offering a smartphone to our 6-month-old so that we can feed him. Children are easily attracted to new toys and a smartphone with so many features is no doubt the best form of toy for them. It has a cartoon that speaks to them anytime they hit the button. The best fictional stories they could ever watch and everything they could get their hands on. Meanwhile, we don’t realize the cost of bringing this technology to them at this early stage of their life. We happily make our child technology-dependent too early for our own convenience, as it is not only saving us time in this fast-moving world, but we also think that we are making our child happy.

Physical inactivity in children is becoming a growing problem day by day and has been considered an epidemic according to research.

WHO reports that about 70% of boys and up to 88% of girls under the age of 10 don’t get the physical activity they need for their age.

Think back to the times when we were growing up as kids. How did we spend our time in school as well as at home? There were no computers, no smartphones, and almost no technology. There was a good balance between our books, TV time and playing games. We were encouraged to go out and play. We had more real friends than social media friends whom we could talk and discuss our stress with. We also used to spend a lot of time on our vacation with our extended family members, especially with our grandparents. We used to listen to their stories, the folk stories, their real-life experiences etc. I remember going on for long walks with my grandfather and on the way bothering him with lots of inquisitive questions about the trees, the birds, or whatever we saw on our way. This helped me appreciate nature, love animals and observe things keenly.

But times have changed. Children today are hardly seen playing after school or having a good social life. Pressure from parents to perform better in academics, more and more access to technology and lack of physical activity is leading to overall physical, mental and social problems in their lives.

This sedentary lifestyle arising due to various problems discussed above is the leading cause of childhood obesity, hypertension, cardiac problems juvenile diabetes, anxiety, aggression, depression and other behavioural changes and musculoskeletal disorders in children. Delayed growth and development in infants and toddlers are also seen due to changing patterns of raising our children and more and more technology taking over our burdens. In recent years, more infants and toddlers are facing delayed speech and learning disabilities.

Investing time and effort in early childhood development starting from infancy is pertinent to stop this epidemic and give our children the best life. Plan a proper balanced healthy lifestyle program for your child’s health and wellness.

Here are some tips to lay a foundation for the health and well-being of our children whose benefits last a lifetime.

·  Do not introduce technology to your children at a very early age.

·  Instead introduce games which stimulate their brains, e.g. educational and learning toys such as building blocks, numbers, shapes, colours etc.

·  Spend more and more time with them while they are still in their infancy. Read a storybook for them, this encourages them to read and write.

·   Feed them while they are observing nature and not offering them a smartphone, this helps them enjoy their food and develop their taste buds better.

·   Encourage them to feed themselves as soon as you think they are ready for it.

·   Encourage them to do small independent activities e.g. feeding themselves, combing, brushing, tying shoe laces, etc. This will not only help them stay physically fit but also independent.

·   Introducing a healthy balanced diet plan and avoiding junk food is imperative.

·   Regularize the feeding and sleeping time.

·   Encourage going to bed early and do not give them access to technology at bedtime.

·   Limit the technology, TV and video game time, e.g. you can allow technology time which includes any form of technology only 1-2 hours a day.

·   Encourage them to spend more time playing games with friends, and extended family members, especially grandparents.

·   You can also select a day to play with your kids e.g. weekends, this will help you bond with your kids and also help you and your kids stay physically fit.

·  Encourage them to spend more time playing outdoors.

·  Encourage them to spend time with grandparents, let them listen to their real-life experiences and learn from them, and encourage physical activity as much as possible.

·  Bond with your kids. Listen to them with open mind and heart. Do not put pressure on them to achieve academic or any other goals in life, instead encourage them to do well in life by giving them all the support they need.

·  Last but not least be a practical example for your own kids. Practice a healthy lifestyle and they will follow you.

 

The author is a physiotherapist. She has done BPT from Bangalore, PGDMS from London, MBA from USA, MIAP. Besides, she has fellowships in Geriatric Rehabilitation, Pediatric Rehabilitation and is a certified women’s health exercise expert. She can be reached at drtaizeenkhanphysio@gmail.com 

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MSME

MSMEs: Backbone of Indian economy

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MSMEs: Backbone of Indian economy

Mohmad Iqbal Marazi

MSMEs: Backbone of Indian economy

                Iqbal Marazi

MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. It contributes significantly to the economic and social development of the country. But, the sector was among the most affected sections during the COVID19 pandemic.

It has been reported that lockdown induced the closing of thousands of MSMEs in the country, despite the government of India’s Rs 20 lakh crore covid response package. According to a recent report by Small Industries Development Bank Of India(SIDBI), two-thirds of MSME’s in India were shut for a period of three months or more in FY2021 and over half of all MSMEs saw a decline of 25 percent in revenue.

WHAT ARE MSMEs

MSMEs are micro, small and medium enterprises categorised on the basis of investment in plant and machinery and the annual turnover in accordance with the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. MSMEs in India have evolved considerably since independence. From being referred to merely as the small-scale industries (SSI) sector in 1960s and 70s, the MSME sector has progressed in scale and in the scope of business activities over the years. MSME consists of both traditional and modern small industries in India. Small industries are divided into eight subgroups: Handlooms, Handicrafts, Sericulture, Khadi And Village Industries, Small Scale Industries and Power looms.

 WHY ARE MSMEs SIGNIFICANT FOR INDIA’s DEVELOPMENT

MSMEs: Backbone of Indian economy

1) Acting as engines of entrepreneurship: The indigenous skills and grassroots innovations can be channelled into MSME business ideas as they require very limited capital investment, are low risk and are not bureaucratically tedious.

2) Completing the economic supply chain: MSMEs are complimentary to large Industries as ancillary units and form an integral part of the value chain by filling the localised gaps.

3) Equitably distributing the opportunities of development: MSME units provide source of income, in wide range of non- agricultural activities and provide employment opportunities in rural areas, especially for the non-traditional artisans and weaker sections of the society.

4) Encouraging inclusive growth via employment generation: MSME are the second largest employers of human resources, after agriculture. They are, therefore considered to be more labour-intensive and less capital-intensive. They provide gainful employment to marginalised sections.

5) Growing role in technology-intensive and rapidly emerging sectors: Indian MSME’s are not limited to small business only but are rapidly increasing their presence, like Financial Technology, Defence, Manufacturing and Space among others.

6) Aiding achievement of sustainable development goals: MSMEs produce products using locally available resources, both material and labour. These products and processes help in achievement of SDGs both directly and indirectly. Some of SDGs are as:

SDG1 (End Poverty) Alleviating poverty through micro franchising

SDG3 (Good health and wellbeing)

SDG6 (Sanitation for all)

SDG7 (Energy for all)

SDG10 (Reduced Inequalities)

SDG14 (Life below water)

India’s MSME sector contributes almost 30% of the GDP. Almost half of the exports come from micro, small and medium enterprises. In India around 20% of micro, small and medium enterprises are micro enterprises. More than half of micro, small and medium enterprises are owned by general category entrepreneurs.

RECENT INITIATIVES TAKEN BY GOVERNMENT OF INDIA FOR MSMEs:

1) Improvement in overall performance and quality. Raising and Accelerating MSME Performance (RAMP) is a world bank assisted central sector scheme. The revamped Zero Defect Zero Effect (ZED) Certification scheme.

2)Access to Finance, Collateral free loan 59-minute loan portal.

3) Access to markets, mandating PSEs to compulsorily procure 25% of their total purchases from MSME’s, International Cooperation Scheme, Marketing Assistance Scheme.

4) Technology Upgradation, Setting up 15 new and upgrading 18 existing tool rooms.

5) Ease of doing business, randomised inspection through a computerized random allotment, reduced environment clearance and certification burden.

The author is a PG student of economics at HNB Garhwal Central University Uttrakhand. He can be reached at iqbalmarazi999@gmail.com

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