The cover story titled ‘Money To Blow’ in the business world issue dated 23.04.2012 is rather a different kind of problem from what you have been hearing about business men in recent time. http://www.businessworld.in/businessworld/businessworld/content/Mr-Piramal-And-His-38-Billion.html Rather than discussing the challenges of finding money, this talks about the problem of spending it.
It is a popularly known fact that Ajay Piramal made a rare deal which fetched him close to four billion dollars couple of years ago. But the cover story does speak a little about the way his business was built and made this valuable. If someone were to go into the details I am sure there would be tremendous learning for next generation entrepreneurs. But let me now turn the attention back to the dilemma that Ajay Piramal is supposedly facing these days.
With my little experience of working with enterprising entrepreneurs, I feel there are number of people who have faced and continue to face this less spoken of situation. The situation of having cash surplus as an asset on the balance sheet, albeit in differing magnitudes. And what entrepreneurs do at this stage actually leads them to either growth or stagnation.
From this short interview with Ajay Piramal, there are few things that stand out starkly. First is that he is not hurriedly finding investments to make. His interest in reducing the debt burden, his interest in buying back shares in the company , his constant search for purchasing future cash flows , his broad focus on core business investments, his new projects investments in the areas which are his strengths, his ability to find the right people to manage these businesses are few alternatives that are being considered. But amongst the many observations that one can make and take away, what struck me strongly as different from what most other entrepreneurs do is his focus on making investments in future looking projects, which have an element of risk attached.
Many entrepreneurs when they make a fair amount of cash lose their ability to evaluate and make entrepreneurial investments. Most of the reaped gains are spent on non-revenue generating or non-future looking assets. While Ajay Piramal’s case of the volume of money to be invested maybe rare, the dilemma of situation is not rare. What I wish to take away absolutely from this man’s approach to the situation are:
- Retaining entrepreneurial objectivity to business decision making
- Maintaining a Zen like approach (equanimity) in the process of handling the dilemma.
If one can practice these two irrespective of the size of the available surplus, one can make good entrepreneurial decisions which can lead to greater wealth generation opportunities. Isn’t this what an entrepreneur is supposed to do – create wealth to fuel societal development?