Navas Meeran: Exiting a business is not a bad idea

(Excerpts from Group Meeran Chairman Navas Meeran's interview on the Dhanam Titans Show)

My dad was a distributor, majorly into consumer goods distribution. Looking at so many products that he was distributing, one day he asked himself. “Why not a product of my own?”

As we were into distribution, we knew the basics of doing business. “Eastern Condiments” was a child of this thought process. Now times have changed. We can rely on technology, which supports growth. There is no point in having hundreds of ideas. My dad, M. E. Meeran, focused on filtering those ideas and selecting three or four and put them into practice. 

Business model

Those days we sold goods on credit. When we realised that it is not possible to grow this way, we adopted selling goods on liquid cash. So, when there was smooth clash flow, we could buy the raw materials on cash. This helped in getting the same at a reduced price. This, in turn made our enterprise more profitable.

Transparency

Transparency is “the” most crucial factor in business. If you are transparent, you will not have to bow your head before anyone. With investors, be it from outside or even from the family, you must explain the details to them in an honest way. This is true in the case of paying tax too. You can avail of tax benefits, but do not try to evade tax. You will not gain anything. 

Generational changes  

A generational change is a bit painful in a family business. But you can also do it without any heartburns. I grew up learning business lessons during my journeys with my dad during my residential school days. So, even as a child, I absorbed the nuances about Eastern Condiments. I knew about such situations when I entered the business. In a family business, do not poke your head into others’ space. Make a system and function within that system. You can evaluate how the business is going through review meetings.

You can take the opinions of others positively or negatively. If you treat it positively, you will grow. Take it negatively and you may end up destroying yourself. In a family business, the “let it go” approach, or the ability to compromise is crucial. Differences of opinion can destroy even well-run establishments. Even in a family business it is important to bring in professionalism.

Be careful about business expansion 

Do not forget the parent company when you start new companies by eating into its profits. People will approach you with tempting investment proposals. But the safety of the investment is your sole responsibility. Decide on the need to run firms simultaneously only after assessing it yourself. I could not do justice to sister companies in the Eastern group. I could take care of sister companies only after selling off the shares in Eastern Condiments. Now we are making efforts to bring in professional CEOs to streamline the functioning of the company. 

Exiting a business is not that bad

People had questioned the decision to sell shares in Eastern and take the IPO route instead. But there is tremendous pressure on us when we get funds through an IPO, we will have to explain it to people. Since I could offload 67 percent shares to another company and still be part of the company by keeping 33 percent, I feel relieved of the pressure. The funds we got thorough the sale of shares is for running Group Meeran. Our effort is to add value to the group. 

My dad, my teacher

My dad, E. M. Meeran was rooted in values. He passionately believed that the organisation’s growth was key to the well-being of those who depended on it. He would never tolerate it if anyone spoke badly to his employees. Moreover, if an employee made a mistake, he was big hearted enough to let it go.

He considered honesty as particularly important. Even if it was about an amount as small as Rs 500 or as big as Rs 5,000, his took the same stand. And if he were to get convinced about one’s idea, he would act at once.

Labour strikes

In the beginning, labour strikes were quite common. Networking with industry lobbies like the CII helped in overcoming them. This experience taught us that those with us should also benefit when the company grew and that in turn the company would benefit when the condition of the employees improved. In that way, a place like Adimali where Eastern was situated had people drawing hefty salaries. The company gave extraordinary facilities to the employees, and this led to an increase in productivity. 

The relevance of money

You need money to run a business. But how you get that is also important. If you borrow money you will have to pay interest. So, you must work on that. I feel that getting private investment is a good bet. But do not mix up the efforts to grow the company and getting the funds. The two should run parallel. You should also see to it that the growth will not retard during your efforts to get funds.

To entrepreneurs

When you start an enterprise, remain steadfast on the growth strategy. Bring in those who are good at execution and give them the freedom to work. Create an atmosphere where people can think creatively and work. However, in between all these efforts, do not forget to enjoy life. Make sure that the company will survive even when you are not there. Employees have the potential to replace us. Use their abilities to the hilt.