This article was basically supposed to be a lecture which I never gave to a very dear friend of mine, who is today a fairly successful businessman, but who could have become a business magnate.

The most important and critical criteria to succeed in business today is to trust someone whom you know can give you sound and unbiased advise about the financial decisions in the concern. In any business, growth is always a sub-set of the proper and intelligent financial planning. For example, if you want to increase the finance available to you from your favorite bank, you HAVE to first ensure that all the factor’s that are unfavourable to that end are first mitigated to a level acceptable by the bank. Normally, what happens is that when a man reaches a certain stage of personal financial comfort, he starts believing that nothing can ever go wrong, which is the biggest mistake any businessman can make. Personal financial comfort will always be maintained if the business that helps provide it thrives and prospers. My personal experience has shown that this is rarely the case, because the moment the business starts thriving, the owners are tempted to drain the wealth from the concern and fill their homes with wealth. Now you may not draw cash to drain the company, but putting a long-term liability by getting a luxury car financed by the company while being used full-time by the owner is a case in point. If you stop at one car, one can understand that one car is necessary to put up a show to impress customers. But when you start changing your car like you’d change your suit, without really bothering about the finance angle, it is your behind which is on fire, not the concerns.

Keep your outside liabilities low and your own capital high is the true way to succeed in business. In a scenario where the profits declared are done to avoid income-tax and not to maximise the concern’s income, and where money is borrowed at prohibhitive rates of interest, rather than making an effort to generate more funds available to the concern from friends, family and other trusted people, you are following a sure-fire one-way street down to hell!

This is where the trusted and dependable financial advisor comes in - make it a point to listen to him all the way and not part of the way, because remember, THERE ARE NO SHORTCUTS TO SUCCESS!!

Vikram S. Mathur

So what is the catch, then? Very simple