Jose Thomas

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The Turnaround
Saturday 16th April, 2011



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My confidence level started to deteriorate.  I was on the verge of a   nervous breakdown as the situation of my company was pretty bad.  The high debt forced the company into a highly leveraged situation.  All the financial parameters were beyond comprehension and I was being advised by the consultants to take a strong decision and file for bankruptcy.  The reason for this advice was due to the fact that my company had gone into a negative net worth, which simply meant, your business becomes non-bankable and must be referred to the government dealing with bankruptcies.

My inner soul couldn’t accept this and could not reconcile to the fact that I had to file for bankruptcy.  On one side, I was fighting to gain confidence and on the other, I was under pressure from my creditors

I called my auditors and consultants for an emergency meeting and asked them what should be done to avoid filing for bankruptcy.  The opinion was that, I had the option of shifting my accounting year for a further period of 6 months, within which, if, I could take the company back into a positive net worth then I could stop the process of being referred to bankruptcy.  Looking at the business model, they also advised that it looked impossible, that too, within 6 months to get the company back into a positive net worth.  This meant I had to make a net profit of about Rs 6 crores or rather, $1.5 million to get the company into the black.  As I sat in this meeting, my mind explored various options and I must say, that I suddenly got the inspiration that ‘I should do it!’  Something triggered in my mind, which gave me the confidence to take the route of extending my financial year (thus extending the FY from the month of March to the month of September)
I knew that this was a tall order commitment and knew it was difficult to achieve.  However I was faced with no other alternative but to take this calculated risk. I knew I had the drive to attempt something out of the ordinary with a hope of making the profit margins, to avoid bankruptcy proceedings.  My auditors and consultants must have scoffed, but since they were obliged to do the job, they agreed and decided to file for the change of my fiscal year.  It was all done.  180 days to go, to make it happen.  The countdown had begun!

I got my senior team to understand the seriousness of this decision.  I got everyone together and started to assess what we needed to do to accomplish this.  We had enough customers for our products, they had some kind of dependence on our production capacity.  They needed our product and I knew the decision makers of those companies very well and had gained their confidence due to my past relationship with them.  I was also on good terms with my raw material suppliers and I knew I could convince them.  What I needed here was for my existing customers to continue doing business with me and my raw material suppliers to continue their supplies.
By this time we owed substantial amounts to our raw material suppliers.  Even though they wanted to support me, they were finding it difficult because they too had to pay the fishing boats from whom they purchased the material.  It was a chain reaction.  I met with them and they were more than willing to cooperate and work with me in taking this company out of this terrible situation. However, they wanted me to infuse them with some funds so that we could buy raw material at affordable prices. The main challenge at this time remained – keeping my creditors confidence in me alive.
I traveled to the U.S. and met with two of my top customers.  I would love to mention their names but cannot due to circumstances. I am so thankful to them because they agreed to advance funds to be adjusted against future supplies.  Wow!  This was a break!  I could convince my customers to lend me up to a million dollars on a simple promise that I would re-pay them through future contracts.  They wired me the funds and before I touched the money, I called for a meeting of all my key personnel and my raw material suppliers and got them to understand the seriousness of this move. 

I virtually moved to my factory and started to live there.  In my absence, production started when the supervisor thought it was convenient for him and the entire discipline had failed.  I stayed put at the factory and spent almost 18 hours on the floor.  I started the plant at 6 a.m., controlled the yield, brought in efficiencies and put the parameters back where it should have been. 

When you process shrimp, yield after cooking and cooling is the key factor.  In my absence, this yield factor almost dropped to 85% whereas, it should have been 95%.  The 10% loss itself was about $100,000/- a month.  In about a week’s time, I was able to put the yields back to 95%.  I was virtually on the line, working with the labour, running full capacity.  My sales started to grow, cash flow started to improve, my customers who lent me the money also started to see re-payments.  It was a great operation and I enjoyed every minute of it! Especially when I started to see the results.  I took everybody into confidence, the people I really needed – my customers, my suppliers and notwithstanding the fact, my bankers, State Bank of India.  They stood by me and not only gave me the support, but funded me beyond norms.  I still bank with State Bank of India, the institution that I respect.  From my experience, I can tell you, that, in 37 years of business, I have never found a bank that will stand by their customer till the end like this one.

So here I had everything positioned and I started to see results on a week to week basis.  Profitability started to show up and due to the efficiencies I brought in, I could affect some cost reduction as well.  At the same time, I also re-energized and activated my shipping business from which my revenue showed improvement.  My daily suffering was clearly visible on my face when I woke up every morning. 

We had taken some unsecured funds from non-banking institutions in India and they were a virtual headache.  Every day their representatives were waiting to see me to know when they would get paid.  At some point, I even lost my generally calm composure and thought of telling them, “do what you want!”  But trust me, I did not do that.  I spent time with them in the factory, convincing them of only one thing.  “Look guys, I am not giving up.  See what I am doing.  I am not a depressed individual sitting by the bar and drinking to drown my sorrows” (and this is what some people do). 

Friends, it will never help for you to get depressed or to get hooked on to any habit to drown your problems.  One has to be purpose driven and give it a shot, to overcome these challenges that we face in life.  Challenges are many!  Some are financial like mine; some are even more terrible, like losing your near and dear ones.  When we are born into this world, I don’t think anyone is assured of a perfectly happy life.  All of you, I am sure, would be going through some type of difficulty. All I can tell you is, “Never give up!”

I quickly started to see things come around.  It is like two strong teams playing the tug of war.  If both the teams are equally strong, you will see that the marker at center of the rope is not moving, but it may swing a bit, either upward or downwards.  This is exactly how I can explain my operations. 
On certain days, the pull was in my favor.  But on another day, the pull was against me.  But I never gave up.  Days and months passed and I knew I was soon moving toward my dead line – 180th day.  I was monitoring the financial health on a daily basis and at one point, I knew I was not going to make it because the numbers were not matching up.  I wanted to cook up the books, but suddenly I thought about the story I had written earlier called
The Truth’.  If you do something wrong once, you would tend to do it again and that would lead to a situation that you may not be able to retreat from.  I did not go that way, but I did everything within the law to maintain my books with the objective of bringing the company into a positive position.

I also would like to mention something here.  I had one too many friends in the city I lived in. In the best of times, especially when I was flying high, they all surrounded me.  I got invited to every party, but when I was confronted with problems and financial failure, I saw no friends coming to offer me any help – no one volunteered.  From that time, I have re-defined the word – ‘friend’.  Who is a friend?  I will write about this later…

I was a believer and I am still a believer.  I worked hard and prayed a lot.  My prayer was, “God, give me the strength and courage to face all this!” It looks like my prayer was heard.  Things started to change and here comes the 180th day.  The day I celebrated…

Stay tuned for the finish…

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Responses to
 Pankaj Arora says:
I Must Say Great Zeal & Spirit Sir...
 Sam Jacob says:
read the inspiring story.You are hard worker Mr. Thomas.
 ratna jayant gudavalli says:
Dear Joe, When U want to be on the right, the damning world call it Satan or Bad People around, keep pulling u down.................They want to enjoy your downfall. Because you are a believer, the strength of TRUTH in you kept bashing the EVIL FORCES......................Through Politics or corrupt beauroucracy or Evil Wishers around You. Great, things are to be done by the strong willed...................YOU ARE ONE !
 Rajat says:
Dear Sir Thanks for this blog. I am going through something similar in this beautiful journey called life. Even though I am not the owner of the business, being in the core team has it's pressures. I hope we also pull through like you did since we are just as determined. regards Rajat
 jayanth says:
Jose this is a great inspiration for one and all.our existing website is being revamped. looking forward to meeting you sometime.
 Ajay Chandran says:
HI Jose, Your story is indeed inspirational and reflects well on your attitude towards life. For me now, reading it is somewhat reaffirming and reassuring. Success will always follow the determined. Perhaps Steve Jobs is the greatest living example of it in the modern world. The tree factors that worked for you here - the will to take on the challenge head on, leading from the front and knowing your real friends - is true in every such difficulty, however big or small the stakes are. One should never give up, i try to practice that too! in my own words.. Kharaab waqt sahi, kaDin safar aur sulagta rastaa hi sahi, Rukna bhi nahin, lauT jaanaa bhi nahin, Dasht mein tu thanhaa hi sahi... Nice to come across your story and all the best! Regards, Ajay
 Jophy says:
Well it’s an inspirational blog, well done and all the best with your effort. I was big admirer of you and never had a chance to meet you. Well I think you are an inspiration of many people and keep the momentum of your success.
 Jyothidas.v says:
First of all , i would like thankyou for giving me an great inspiration. I admire you for showing the positive approach towards the life. All the best wishes for you and for the choice group. Carry on with success
 arun says:
sir, u r experience is great. i am sure it ll be a good teacher for every1... may god bless u sir....
 Thashreef says:
sir, m a fisheries graduate..i undrstnd wat u talk about the percentages and how much loss it brings. Its so much inspiring for me to hear how u managed to bring up ur sinking ship back afloat..nice to hear u sir..
 sundaram says:
i saw your blog ! it is good ! you are very right wrt regard to friends. there is only one friend for all of us, who accept all of us whatever we are, and try to help us in all our needs and that is GOD. you may call him intangable or unseen, but honestly he is the only seen person you can find if you are sincere. friends because of money, power and position can be found in plenty, but to get the above friend you have to pour like GANGA only one thing i.e.LOVE, you should love him so much and beleive in him. with rgds sundar
 Mukesh Murali says:
Mindblowing... !! I Swear, Never Give Up.. It's a Salute for you by saying this Great 3 Words.. :)
 Patrick says:
Howdy! This post couldn't be written much better! Going through this article reminds me of my previous roommate! He continually kept talking about this. I am going to send this information to him. Pretty sure he'll have a great read. Thank you for sharing!