Saturday, January 31, 2009

The economic crisis and how it affects my enterprise

I am just trying to breathe after a staggering Rs21,000 cash flow only loss in this month January 2009. I must point out that this loss has not provided a salary for me or for that matter even lunch money, so I have to live on charity! I was hoping that my woes were over, but it seems that they are certainly not. I will show in detail all the items of my loss when I have analyzed all the components. It is something I don’t need to be ashamed off or proud of its just fact. As I am a UK qualified Chartered Accountant, I can have the auditable figures, out within a minute of the month ending, something not possible for any other enterprise on earth!! Or at least I like to think so. Show me I am wrong!

Of course if I include depreciation or amortization, the loss would be three times. I need a reserve of at least 75K a month just to be able to set aside funds to maintain the capital of the business at the current levels. So in reality my business is wasting away and not actually growing. That’s a horrifying thought as that was not my intention.

Apart from the normal problems I have encountered in production and the added problems this year of falling prices of King Coconuts, and Coconuts due to a glut in the market, I have to face a whole new problem partially caused by the economic crisis.

I have complained sometimes nauseatingly about the unreliability of my staff, who never turn up for work, with excessive absenteeism. Surprise! all decided to come to work this month with near perfect attendance and then claim the attendance bonus I used to offer. That was counterproductive as attendance fell, so I decided to abandon that incentive. I am now so grateful that it was removed as I realized that the perfect attendance was due to them not having any other source of income, with other providers of income being unable to give them the odd jobs they became used to. Those households are also suffering a cash flow problem themselves.

It sounds funny but it is no fun to me as it hurts my pocket more now, as there is no goal congruence between the workers and the employer. The workers want to maximize income, even if they don’t work, and I have to maximize profit. Actually if I cut 25,000 in wage payments, I could probably get into a break-even, meaning some are paid for no output! Making me sound like a big fool to employ the unemployable!

If you think I am just complaining, I have a worse report from a company I am advising: an Organic Farm, which employs 65 people. For the first time in 10 years under the current ownership, the farm has perfect attendance, and so all the workers draw the perfect attendance bonus of Rs2,000 each per month. This has resulted in the company having to pay out an additional 100K a month for wages. Tea their main product fell in output from 600kg in December to 200kg in January due to the drought conditions. So the loss ballooned due to lack of product and ballooning wage payments.

What both these examples show is that people take advantage of (I would go as far as to say exploit) the reliable employer in hard times and ignore and almost stick it to them in good times, by finding higher paid short term work and using their main job as insurance!

11 comments:

Bluegrass Pundit said...

If this doesn't make you want to fly to Washington and slap your legislator, nothing ever will. Congress gives itself a $93,000 raise to stimulate the economy. It must be nice to have that kind of extra petty cash laying around. Instead of tightening your belt in this recession, wouldn't you like an extra $90,000? Never mind the record deficits. Never mind that ordinary Americans are struggling to pay their bills. Our Congress thinks it is far more important to be able to dole out perks to itself.

Anonymous said...

Hello !.
might , perhaps curious to know how one can manage to receive high yields .
There is no initial capital needed You may begin to receive yields with as small sum of money as 20-100 dollars.

AimTrust is what you thought of all the time
The company represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with affiliates everywhere: In USA, Canada, Cyprus.
Do you want to become a happy investor?
That`s your chance That`s what you desire!

I feel good, I started to get income with the help of this company,
and I invite you to do the same. It`s all about how to choose a correct companion who uses your money in a right way - that`s it!.
I earn US$2,000 per day, and what I started with was a funny sum of 500 bucks!
It`s easy to get involved , just click this link http://zikypove.arcadepages.com/lunupemu.html
and go! Let`s take our chance together to feel the smell of real money

Anonymous said...

Hi !.
might , probably curious to know how one can collect a huge starting capital .
There is no need to invest much at first. You may begin to receive yields with as small sum of money as 20-100 dollars.

AimTrust is what you haven`t ever dreamt of such a chance to become rich
AimTrust represents an offshore structure with advanced asset management technologies in production and delivery of pipes for oil and gas.

Its head office is in Panama with offices everywhere: In USA, Canada, Cyprus.
Do you want to become really rich in short time?
That`s your choice That`s what you really need!

I`m happy and lucky, I began to get real money with the help of this company,
and I invite you to do the same. If it gets down to select a correct companion utilizes your funds in a right way - that`s the AimTrust!.
I make 2G daily, and my first investment was 500 dollars only!
It`s easy to get involved , just click this link http://mixijiru.100megsfree5.com/zulojyq.html
and go! Let`s take our chance together to get rid of nastiness of the life

Anonymous said...

"I have just hit my fifties and I have established a very comfortable financial position. I am a financial consultant for a highly successful international brokerage house, but it has not always been that way.
I have experienced hard times, particularly when I was younger, and it was then that I developed the bedrock of my financial resources, The Winning Way which is on offer on this web site. Once that system took off the old adage of money makes money has never been more true. The instant cash flow gave me the opportunity to try out a trading system, 100% Profit In One Year which is also on offer here and this accelerated cash into my account like there was no tomorrow.

www.onlineuniversalwork.com HOME BASED WORK

"

Anonymous said...

Good day, sun shines!
There have were times of troubles when I didn't know about opportunities of getting high yields on investments. I was a dump and downright pessimistic person.
I have never imagined that there weren't any need in large starting capital.
Nowadays, I feel good, I started to get real income.
It gets down to choose a correct companion who uses your funds in a right way - that is incorporate it in real deals, parts and divides the profit with me.

You may get interested, if there are such firms? I have to answer the truth, YES, there are. Please be informed of one of them:
http://theinvestblog.com [url=http://theinvestblog.com]Online Investment Blog[/url]

Anonymous said...

tired of comments like "Good night! " or buy antibiotics online. Then write to me at icq 75949683256...

Anonymous said...

I love you.

Anonymous said...

In a way.
---------------------------------------------------------
Signature:buy levitra professional online gmr

Anonymous said...

It can hardly be so.
---------------------------------------------------------
Signature:buy lipitor online tnvyf
lexapro 5mg pgosc

Anonymous said...

Do you minԁ if I quote a couple of your posts
аs long aѕ І proѵide cгedit and sourсes back
to youг webpage? My blog site is in the exaсt ѕame
агea of interest as уours and my ѵiѕitors ωould reаlly benefіt frοm somе of the informatiοn you provide here.

Please let me know if thiѕ alright ωith yοu.

Thank you!

Mу ωebpage - Payday Loans Online
Take a look at my blog Payday Loans Online

Anonymous said...

L'amore A 100 g. El coraz n toma las riendas de los retos emocionales a los que nos enfrentamos diariamente, para que as? S, depresszi, szenved? You begin to understand the ways and means of filling voids with holistic effulgence and beneficial energies. It is also important. Body Rub sex is not a result of past meritorious actions. Day spas are body rub also quite popular, as it might make them mad or it might hurt them.

Feel free to surf to my web-site: tantric massage in London