Sunday, July 5, 2020

Profit – the first important goal of business by: Dhananjay Mahadev Datar

I frequently give business tips to the youth in my entrepreneurship awareness lectures. In one such lecture, a person asked me to describe the formula of my successful business in a single word. I immediately answered -‘Profit’. As everyone was pondering over my reply, I continued, “Yes. Every business must be done with the sole aim of earning profit and that too ethically. A profitable business automatically fetches success, expansion and prosperity. Your wealth is judged by how much profit you have in hand rather than how much your business volume is on paper.”

I have learnt this wisdom from my Sindhi friends in Dubai. When I was a new entrant in the business, I was living in an area where most of my neighbours were Sindhi businessmen. This community is acknowledged for their industriousness and trade aspirations. They enjoy business and life equally. I found every Sindhi house in the vicinity adorned with modern amenities and posh interiors and they would spend a large portion of their income generously on food, ornaments and other luxury items. But what puzzled me was if these traders ran their businesses with very low profit margin, how come they maintain their comfortable lifestyle? I asked this question to many of them but they seemed reluctant to share their trade secrets to an outsider. Finally after a long time of trust, I was successful in getting the answer from one of them.

He said, “Look, Dhananjay! It is not very difficult to understand. When business is your only source of income, you have to earn profit because your family depends on that income. We run our businesses for profit first and luxury and charity comes afterwards. We never let go of the profit even if it is as small as one Dirham. At the same time we try our hardest to retain the customers by offering them products at low profit margin. When they do come again and again, profit steadily increases. Remember- to succeed in business, never lose a profit and a customer.” I got the message.

Later, I taught the same technique to my elder son Hrishikesh. He was a student then. Some of his foreign schoolmates loved a brand of Indian cookies. Hrishikesh found a business opportunity in it. He purchased a dozen packs from a shop and sold them to his friends at a greater cost than the MRP. When I learnt it, I disapproved it and taught him how to earn steady profit ethically. I told him to approach the main distributor and buy a large quantity of packs with maximum bargain. When he
did the same, I told him then to sell each pack for its printed MRP. That way Hrsihikesh earned both, a handsome profit and a trust from his friends.

Friends, let us remember a quote by famous American automobile executive Lee Iacocca- In the end, all business operations can be reduced to three words; people, products and profit.

By: Dhananjay Mahadev Datar, CMD, Al Adil Group, UAE Bahrain,Oman Saudi Arabia & India.

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