A very senior channel personality asked me when I met him last week, “How do you think you can worry about thinning margins and still manage to not just survive long, but also thrive?”
He himself had an answer. His company is a corporate-focused solution provider and deals mainly in networking products, and one product of his own brand. And has been doing so in spite of relatively longer sales cycles and investments in training, risks of employee retention.
The question arose again when I met the owner-chef of a specialty restaurant, a masters is business administration and a webmaster in a technology firm before he decided to invest a few lakhs in the venture. In the past 3-4 years, he’s splurged on the d cor of the premises, continues to purchase authentic ingredients imported from far east Asia (inspite of costs that have risen over 300 percent), realised he can’t meet the taste-requirements of all who walk in, see an investment in promoting his “baby” sink. He continues to do well, only that some entrees in his menu might be made unavailable. He then has the time to spare to ensure he makes the best meals, some of which take 2-3 hours each to prepare. How’s business? “Damn good,” he would say.
There’s yet another business head who prefers running his business on values like profitability, efficiency, integrity and transparency. He’s investing in professionals to run his organization, even having a ‘Chief Information Officer’ a term only lately being accepted by corporate India to run his IT infrastructure. He is fighting the margin wars by sticking to distributing brands that can command premium. His six-year-old company has also won a few awards. Not at all surprising – he is an engineering graduate and an alumnus of the Indian Institute of Management. Even less surprising will be when he goes public, which he says he might consider in another three years!
What’s common? All these businesses are governed by relationships, long-term, mutually-beneficial. They’ve built their own “intellectual property” if their vision and the properties that they built could be called so.
They may also be the sort of partners that principals want to get into their fold, specially since they have begun looking for “5-year visions that match ours” as a criteria.