Jose Thomas

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Tuesday 26th October, 2010



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Dear Friends,

Over the next few posts, I will be chronicling my experiences of starting up in America. From the
e-mails I’ve been reading, I realise that most of my readers lean towards being entrepreneurial in thought; hence I will be elaborating the process of how I was able to establish a business in the U.S and continue to grow it, even to this day.

If you have read my earlier posts, you would know that from a young age I had learned a very important lesson; which was to do business only in a straight forward and upright manner. With this in mind, here I was in New York, with $8000 given by the Government of India to establish an office, strictly following the conditions that were prescribed in the permission letter.
The conditions were very firm and any violation meant punishment under Section 27 of FERA.
Dear Friends, FERA was something that every businessman was simply petrified of in the 80’s. Thank God it does not exist today. Today we see that under the able leadership of our current political leaders, our country has come a long way in liberalisation, creating a highway for Indian businesses to go overseas, acquire or establish any business that was envisaged by the promoters.
When I landed in America in1986, this was not the case. We lived in a very suspicious environment. When we went out of the country, the Customs officials used to search our baggage and personal belongings to see if any foreign exchange was going out. The enforcement agencies were unearthing foreign exchange violations and punishing offenders. The more I read the letter permitting me to start an office, the more apprehensive and worried I became. As per the permission, we were not allowed to get into any association with associates in the U.S. nor complete any transaction without the prior approval of the Government of India. Friends, can you imagine this? We were not allowed to even borrow $ 100 from an American of Indian origin. We were all under a scanner.

With all these conditions, knowing fully well the difficulties, I decided to open an office here in New York. By this time, fortunately, one of my colleagues decided to move to New York with his family to help me establish the business. Between the two families, we had nobody to lean on but each other. Previously, whenever I visited New York, my importer friends used to meet me at the airport and take me to the hotel near their office, discuss business, take me sightseeing, entertain me and then drop me back at the airport. However, when I landed here this time, things were different. No one was there to receive me at the airport, no fancy dinners, no paid hotels, nothing.
I was thrown into a relatively unknown concrete jungle (New York) and had to fend for myself.
I couldn’t imagine what challenges were ahead of me, but I knew what I came here to do, and that was, to somehow make this a success.

My intention was to cut the importer and go direct to the processors for selling our block frozen shrimp and seafood products. Earlier I had written that these middlemen (importers) were very successful as they made huge profits standing in between the exporter and the final processor. I was pretty new to the business environment and I was too young. Even though I had a clear objective of establishing an office to avoid the importer, I did not know many things– including how to get the legal work done in connection with establishing an office and so on.

We rented an apartment in Flushing, Queens, a borough of New York City and managed to find an office space in 19, Rector Street (see pictures), down town New York City. We got the assistance of some friends and were able to quickly establish an office. We put communication facilities in place and bare minimum furniture. We were all set to go. By this time, we had almost run out of the capital that we brought ($ 8000) which we had to spend towards rental advance, purchase of furniture and so on… Today, when I look back, I realize how immature I was to go to down town New York to establish a company with just $ 8000 as capital. I should have started this office somewhere in New Jersey where the cost of establishing an office would have been much cheaper. But here I was anyway, I did not have much experience and thought that New York City was America. Huge skyscrapers, Wall Street -the world capital of financial markets, the World Trade Center, the Empire State Building, and the Chrysler Corporation among others. I always believed in thinking big and maybe that’s why it happened this way. A small company ending up establishing it’s little office in the midst of world giants. I had no car nor did we have any furniture in the house because we simply ran out of money. Both the families managed to lead our everyday lives in a very basic manner, looking twice at the price tags at the grocery store where we used to buy food. The struggle started. Daily commuting by sub-way to the city, not much help, very little money and there were even days when we didn’t know what we would do for the next day. I could have probably convinced some friend here to lend us some money but I was simply afraid as this would be a violation of the permission granted by the Government of India. I decided to face the situation because I had a clear objective. We battled every difficulty that came our way and managed with what little we had.
We focused on ways to get the business off the ground.

I had a factory in Cochin that was capable of producing and exporting shrimp. My business model was to eliminate the importer and go directly to the processor. To begin with, we hit road blocks as no processor would even answer our calls or agree to give us an appointment to meet them.
It looked like they wanted to do business only with their importer friends. So we tweaked our plan and decided to initially align with one of the importers in a joint venture. We identified a company that was not really importing from India but used to buy shrimp from South America.
We met and spoke with them and we struck a deal. The understanding was that we will produce the shrimp in Cochin, export it and the joint venture partner would do the formalities to import, clear health and customs and sell the product to the final processor, then we would share the profit (or losses) on a 50:50 basis. The company we started this venture with, was headed by an individual who knew the business but money was his priority. He was so tightfisted that he didn't even trust his own left hand going into his pocket.

We had no cash with us even to take care of basic needs, leave alone the fact that there was no furniture at home and no automobile as well. We shipped the first consignment, but back then, it took 45 days to reach the U.S as compared to 28 days today. So here we are, waiting anxiously for the first container to arrive, with no revenue in hand and expenses to meet. It was a struggle. I used to purposely go home late every night, just to avoid questions from my family, because I had nothing to bring home. I couldn’t even bare to look in to the eyes of my wife, because I knew I had nothing.
It was around this point I remember her asking me one night, “Jose, Can we get a dining table somehow? Because I am really tired of having meals on the floor.”… I had to fight back tears.
We had just placed our elder daughter at a kindergarten near my apartment and used up all our remaining money. Expenses began to mount. It’s not that we did not have finances back home in India, but that we wanted to continue in a straightforward manner. I asked my colleague, why don’t we go to our partner and ask him for an advance against the goods that were in transit. We checked and re-checked if this was a violation of the permission. Having no other option, we decided to take this calculated risk of approaching our partner since we were in dire straits. This guy was very reluctant to even talk about this subject; he flatly refused and gave us no money. Do you know what our request was? We only wanted $ 3000 to be adjusted against the first consignment. This money was simply to meet our day to day expenses till we saw some light. One day, while I was coming back, late as usual, from work, I noticed how the local grocery store near our apartment used to throw out a bunch of things every night. Among these, I noticed how they also threw out large cardboard boxes. Immediately an idea hit me. “Why can’t I take one of these boxes and use it as a dining table?” It wasn’t the perfect solution, but it worked. Something was better than nothing, and we finally had something to place our dinner plates on… I saw my wife smile after a long time… we were happy! This was a moment that further cemented our strong relationship.

After going back and virtually begging, we eventually did get the $3000 advance from our partner. This was a break. We managed to pull along till the first consignment came in and to our good luck, the goods were cleared and this importer partner could sell the goods to the final processor.
Within 90 days, we got the first share of our business dealing – approximately $ 10,000.
Friends, you see something here. I came with a capital of $ 8000, probably made a mistake of opening an office in New York City, finished up the money in less than a month, struggled for day to day needs and held on with the conviction of doing it and was able to bring in profits more than the capital within 90 days of establishing our business. I was thrilled and I started to see the road map ahead of me. But to my utter dismay, the road ahead had one too many obstacles as I continued my American journey, but more on this in my next post….

What do you learn from this? Set a goal that is achievable, chase it, achieve it and continue to raise the bar on your goals.

Signing off from the Big Apple. God bless America!

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