My First Entrepreneurship

Commander C.Arockiasamy was an alumnus of the prestigious Indian Institute of Management IIM Indore. As a part of his Post graduate course in business management, he did one month internship with our automobile manufacturing company. He had written a very useful book for young entrepreneurs and Ex-Servicemen, who want to pursue entrepreneurship. He brought out his knowledge gained and the practical application of the same in developing his company. This book will serve as a guide for students studying MBA in small institutes to become successful entrepreneurs like him.

Jai hind   

All of us dream of doing something big or different in our lives. To do things differently, one needs to be the boss, the controller of one’s actions. We dream of becoming our own boss and attending office at our own will with no compulsion. One need not have to rush to the office. On getting late to the office and taking bull shit from the boss may not happen if you are the boss. I am no exception. Right from my childhood, I grew up seeing the likes – greatowners of big companies like General Motors, Boeing, and Dunlop abroad, the Tata’s and Birla’s in India. Being a Tamil speaking Indian, I used to envy the owners of TVS motors ltd, India cements, Raja Sir Annamalai Chettiar who established Annamalai University, AC Muthaiah Chairman of SPIC, etc. The desire to start a business of my own was burning inside me. My dream came true only at the age of forty-nine after my premature retirement from Navy in Feb 2007. In fact, my Guru during the infant days of my business was another Ex-Air force officer who started his business when he was 58.

The most unfortunate thing was I started my business venture in the same year when the great global recession 2007-2008 affected the USA and other European countries. Luckily, India and China were not affected as much as the American and European countries.

I came from a lower-middle-class family and my status was raised to class one gazetted officer after I was commissioned in the Indian Navy on the first day of Jan 1981. When I retired in the year 2007, with the fifth pay commission and as a commander, my total salary was around 37K with the take-home pay of around 20k per month. If you take the perks into consideration, then the CTC(Cost to the company) would have worked out to be around 50K.

Now I leave it to the reader to decide which class I would have belonged at the time of retirement. Yes, the salary was less compared to the high packages offered by the Merchant Navy and other corporate offices. I felt that I had just reached from lower-middle to middle-class level in my life. I could have left Navy in the year 2001 with a pension on completion of twenty years of service and then could have pursued a second career mainly in merchant navy. However, due to my personal problems, I could not leave the Navy in 2001. My father was very strict and insisted that I stay put in Navy until retirement. My father passed away in 2005.

 Against all odds, I decided to do my PG certificate in business management; a six-month residential course in 2006, at the Indian Institute of Management Indore. I am grateful to the mighty Armed forces for sponsoring defense officers for the first time to such a prestigious management institute of India. That time I was posted in a naval air station INS Rajali in a small town called Arakkonam near Chennai in Tamil Nadu. My son was in the seventh standard and daughter in fifth.The best thing that happened in my life at the lovely air station was that I learned to play golf and started enjoying the game. All my relatives were worried and advice started pouring in to tell that even if I do the course, I should not leave the Navy.

With a somewhat confused mind, I packed up my things including my beloved golf set and headed for Indore. The course was scheduled for April 03 to September 16, 2006, and I started the journey wondering whether I would be able to concentrate on studies after such a long break. The last major course I did in Navy was my specialization course in communication during the year 1987-88. I started the course coming first in the opening examination. We call it in Navy that I started with a bang, but in the end, I struggled to finish. With these kinds of thoughts running in my mind, I reluctantly entered the prestigious campus.

We all checked into our allotted rooms and I met all those who reported for the course from navy and went around meeting air force and army colleagues who had also reported on the same campus. My good friend Bhaskar alias Basu, who joined Navy along with me in the year 1979, was also there and it was a great strength for me. He always played a matured role in my life and the legacy continues. We all got ourselves acquainted with the hostel mess and had our first meal on the campus. We had a great time during dinner and shared a couple of drinks. Next day was 03 April 2006 and we had our initial briefing at 1000hours. Being the first course from defence services, we had some starting trouble with our syllabus and certificates. The director Dr S P Parashar, a dynamic personality, addressed us and introduced us to the faculty. Thereafter, we had a high tea at the end and wound up for the day. That evening, we went around Indore to explore the eating joints and other places.

Indore is located on the southern edge of Malwa Plateau at an average altitude of 550 meters above the mean sea level.It has the highest elevation among major cities in Central India. Indore’s financial district, based in central Indore, functions as the financial capital of Madhya Pradesh and the Madhya Pradesh Stock Exchange is situated here. People were very friendly and simple. Food was good and cheap and most of the people here loved eating outside with families. In fact, I was surprised to see Mc Donald’s outlet opened and operating there even before it was opened in Chennai. We had a great tour of the city.

Next day it was back to studies and the syllabus, hand-outs and reference books were given to us by all professors. We had core subjects and electives. The total core subjects were twelve and the electives were ten. The most interesting subjects to me were HR, Operations and Project management. The subjects, the assignments and the class tests kept us so busy that we ended up working almost for fourteen to sixteen hours a day. The assignments were to be submitted by 11:59 pm and we had to work hard until midnight. Still, we enjoyed as the subjects were interesting and were an eye-opener for most of us about business and its nuances.

We used to take up interesting topics like comparing the TATAs with Reliance. The honesty and integrity of TATA’s and Ambani’s business tactics were discussed in detail, Tata’s business ethics vs. Dhirubhai Ambani’s tactics. Ambani used to call a peon of government office as ‘sir’, justifying that he was the representative of the State/Central government.

 Our programme director Professor Ms Sumita Rai was a very compassionate and good guide for all of us. It was her passion and great guidance that made me start a business of my own later on,after completing the course. The best part of the training was preparing very exhaustively for giving a speech on various national and international topics.

Our course strength was forty officers including four lady officers. Notwithstanding the study pressure on weekdays, we used to manage free time on weekends and have fun. We used to go to Mhow (Military Headquarters of War) a big cantonment situated just 29 km from our campus. Mhow used to be the headquarters of the 5^th division of the Southern command during the British Raj and also the birthplace of Bharat Ratna Dr B R Ambedkar.

We all got a temporary membership in the officers’ club. Normally, Saturday nights we preferred to spend enjoying a few drinks with other mates. It was a beautiful club with a very picturesque lounge area. The best programmes we used to enjoy in the club were playing Tambola and dancing until the wee hours during the monthly dancing schedule. The best part of the food was the local delicacies. To name a few, the piping hot samosas with tangy chutney, the crispy jalebis, probably the best I ever had in my life.

For street food, we used to go to a place called Sarafa where we used to get lip-smacking snacks, namkeen, chaats and sweets like Peda, Rabdi, etc. till as late as two o’clock at night. More than all these, I enjoyed playing golf in the army golf club and the local Indore golf club. The Army golf club used to have a few natural and artificial water bodies and streams which demanded great precession and technique to hit a shot past them. I lost so many balls to these water bodies. Still,I used to finish with a handicap of less than eighteen. We started on Sunday morning with four members (Four-Ball) and normally tee off at 6 in the morning. After finishing nine holes(halfway), we used to have a breakfast break. No idlis, dosas and vadas but the famous poha, a popular breakfast option across the country, in MP, it is savoured much more. Made with flattened rice, onions, potatoes and seasonings like chillies, lemon and curry leaves, it makes for a light yet satisfying treat.

 

After that, we finished playing the rest of the nine holes by eleven, took a shower, and a chilled beer session followed by lunch in which the menu used to be palak pooris, pulao with paneer and chicken.

I met some of the local businessmen at the Indore golf club. They were wonderful human beings and the mark of their character was ‘humility’. Though they were doing big business and were millionaires, they were very simple and humble. With such lovely people around, I wished to find a job there and wanted to settle down in Indore. However, destiny or fate had some other role for me.

The regular students were very friendly and we had a social get together on one of the Saturday nights;fun-filled with music dance and the works. As part of the curriculum, we all went off for one-month internship at various industries and I was lucky to get Hyundai Motors Private Ltd. Chennai. I considered myself lucky to get acquainted with the esteemed successful auto manufacturers from Korea. It was amazing to see the roll of steel sheets entering the workshop, going through cutting and then assembling where it got into the shape of a car along with the engine and other accessories being fitted and finally being pushed to the painting section. The source was the steel plate and the end product was a car. The entire process was automated but supervised by manual workers. No wonder Chennai had become the Detroit of India.

My family was staying in the Naval Air Station at Arakkonam. From there, I used to start my day at 4am and did not like to bother my wife as she used to have a long day as a homemaker. I prepared my tea, completed my routine and reached the railway station by scooter at 5:30am to catch Chennai bound express from Kerala and reach a place from where I boarded the Hyundai Company bus. I used to reach the factory by 07:20 am, punch in the biometric system and had a sumptuous South Indian breakfast. The Koreans had a different menu and a separate dining hall where they had their own delicacies.

My boss was DGM-HR MrRajakumar, a very soft-spoken gentleman and a thorough professional. On the first day, he reluctantly asked me,“Commander, can you kindly wear a white shirt and black trousers because all trainees have to wear that uniform?” As I was still in services, I had plenty of black trousers and white shirts. The next day, I promptly reported in the proper uniform.

As a naval officer, seeing the life of submarines and ships, this was a totally different and interesting experience. Initially, I was attached to the HR department and learned the practical aspects of HR in a manufacturing company. Basics like planning of motivational lectures, group tasks, games, picnics and performance appraisals with incentives/increments for the employees. My next attachment was with the Admin and contract department where I met Col Inbaraj, a retired army officer. He was an officer and gentleman true to the core. He was the one who encouraged me and gave me the confidence to complete the course and take a premature retirement on the basis of superannuation. Another interesting character I met was a young HR manager by the name Sumeet Kharbanda. His young age dream was to join the mighty armed forces and he was very impressed with me. He came and visited our place in the Navy and now he is the GM-HR. Further, during the initial stages of my entrepreneurship venture, Col Inbaraj guided me to get some big contracts.

My next attachment was to the project management team. I was simply amazed by the way the team went about planning a new workshop for automobile production. They had the statistics of land survey dating back to 1900 AD. The place for the workshop was selected avoiding old water bodies. I remember our naval dockyard at Visakhapatnam, constructed on reclaimed land from the sea, which is sinking a few millimetres annually. I was interacting with the Indian and Korean civil engineers and I regret not having done engineering in my life. Those days (the late seventies) there were not many private engineering colleges and to get a seat was very tough and competitive.

My final attachment was to their sales and marketing team and their strategies. It was mind-blowing to see their marketing strategy, the supply chain of cars to South American and African countries. The Chennai port shifted their coal export and import to the nearby,new Ennore port because they wanted the Chennai port mainly catering the export of cars. Though I started my day at 4:00 am and reached home by 8:00 pm, I enjoyed the tenure and completed successfully my internship and went back to Indore.

Back to campus, we were busy completing the course and getting ourselves prepared for the most exciting part of the course, the campus interview. Big corporate companies like Reliance, TCS, ICICI and HCL were to come for an interview to select us for our second career. The discussions were all about which company, where and what would be our CTC (Cost to the company).

The entire course was divided into few groups and the discussions were on and on about the strategy of how to face the placement team. Finally, the D-day had come and all the short-service commission officers were picked up instantly as they were all in their mid or late thirties. We, the permanent commission officers, because of our age, were delayed for a few days. I got an offer from HCL but in Delhi. Relocating the family to Delhi would be difficult. The extreme cold in winter did not suit my wife and finally, I gave up.

With the newly acquired confidence and knowledge, I put up my papers for a pre-mature retirement from 01 Feb 2007. Meanwhile, I was contemplating the option of joining Hyundai Motors. My only reluctance was starting the day early and ending up late every day including Saturday. The next thing I found was working withKoreanmanagers could be a difficult proposition as they were not very friendly with us. The main reason for them to start their venture outside their country was the labour problem faced in their own country. They were very apprehensive about our managers and senior-level managers handling the issues of labour.

The alternate option was to try for a job for less salary. I succeeded in getting a job in a private security company by the name M/s Peregrine private limited. The managing director Manjeet was a retired major from OTA (Officers Training Academy) Chennai. He was a very dynamic and a shrewd business person who interviewed me in the month of January 2007. The interview was held in the old Adayar park hotel in Chennai. He was impressed and suggested I join on 02 Feb 2007 so that there was no break while starting my second career. Since I needed time to renovate my accommodation in Chennai, I could not join as he proposed.

Here, I must mention, in my glorious service of twenty-six years, all I managed was a meagre two-bedroom Tamil Nadu Housing Board flat measuring 925 square feet in Chennai. I had to get it renovated for moving my family. The naval house we were living in was a luxurious two-story Bungalow. My salary was fixed at 35k against the other offers where I could have got around 65000 from HCL or Hyundai. But I liked the job because as a Regional Manager,I would be independent and I had a team which was very good. One young accountant by the name MrSampath was very dynamic, always willing to learn.

However, my wife and children could not manage with the two-bedroom house which reminded them of a pigeonhole. In fact, my wife was forcing me to join the navy on re-employment. Well, somehow, I managed everything because the job was very interesting. I had developed an excellent repo with my boss. I put into practice all the good lessons and business tactics we learned from IIM Indore. I had positive interactions with all the clients, took feedback from them and drew action plans and got the approval from my boss.

The biggest challenge in the security industry was the prevention of night duty personnel from sleeping while on duty. Weekly, once, I used to spend the night in my office for surprise night rounds. The problem reduced and my clients and boss were happy with my performance. I started learning accounting, which was a little different and complicated from the accounts I worked in the navy. It was Mr Sampath who taught me all the main elements of this business of the service industry. Things like service tax, provident fund (PF), employees state insurance (ESI), the rules regarding the contract labours and their eligibility, minimum wages, etc. The most interesting part of accounting was the profit and loss statement. Slowly, my dream of starting a company of my own was growing. I was afraid to share my plans with anybody including my wife and children as they would turn negative and suppress my feelings and plans.

 After spending three months in Peregrine, I put my resignation reluctantly against the wish of my boss. As usual, lots of advises and differences of opinions from friends, wife and relatives started pouring in to dissuade me from starting my own dream venture. They even suggested that I am a misfit and will be doomed. I will end up losing all my hard-earned properties in the business. Very close relatives mentioned to my wife that I can not manage the pressure of business. Nonetheless, I had other plans to prove them wrong. I chose this industry knowing very well that the initial investment was far less compared to the other industries. In four months, I worked in a fourteen-year-old company but had the gift of God to understand the complete nuances of the security industry.

A humble beginning of M/s Cosmo Protection Services took place in a small hotel on 17 June 2007 in Chennai.My all-time hero of navy, Commodore Shekar along with his heroine Mrs Malathi Sekhar accepted to grace the function. Mrs Shekhar lit the kuthuvillaku and inaugurated my first new company. She brought Laksmi in our life and we, as a family, are indebted to her. I personally felt the presence of my father and mother who were no more on that auspicious occasion in them our prayers and good wishes to them for a long life.I felt that they graced the occasion in the place of my beloved parents and I cannot forget that incident for years to come. I invited a few other officers of the navy including my beloved course mate and IIMbatch mate Bhaskar,my beloved corporate guru and mentor Col Inbaraj, a few other colleagues from Hyundai and my ex-company Peregrine. We had a wonderful lunch and with their best wishes, I started my dream company.

 My initial investment was a meagre desktop and uniform for the guards (partly recoverable); my registered office was my home. Even after eleven years of successful running, my home is still my registered office. The basic requirements for starting this company were first registering the company under the “Shops and Establishment Act”at the registrar of our zone. Then, the Provident fund (PF), Employees State InsuranceScheme (ESI), and the service tax registration. Wherever one goes for marketing, these are the basic documents which will be required. Another important document is your income tax returns.Normally,the previous three year’sincome tax returnswill be required. I used my naval returns and continue my company’s returns on the same name even now. This honestly includes all my assets including my pension.

I appointed one field officer cum operational manager (OPS). In fact, my company name, logo, profile and uniform were designed and developed by him and my son. Though my son was studying in the eighth standard, his computer knowledge was excellent. For me, he was a computer wizard. I learned MS-Word,PowerPoint and Excel from him.

I started with zero and went slowly to six security guards in two months. I convinced my wife and son that we had nothing to lose. Slowly, they started understanding me, and my son started preparing the monthly invoices. The field officer whom I recruited had vast experience in the field of security and I had to pay him heavily. He promised me to get lots of contracts but unfortunately, he could not do so in three months s

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o I had to sack him and find another candidate on lower wages.

Finally, the breakthrough came in September, thanks to my mentor Col Inbaraj. He had shifted from Hyundai to erstwhile ABN AMRO, now RBS,and gave me a contract which was run by my old company Peregrine. No favours but only on my merits and involvement in the profession. It was two supervisors and sixteen guards on two shifts. So, the strength of my company had gone up from six to twenty-four in three months. I was flying on cloud nine. Tata’s and Birla’s were coming in my dreams.

However, my mentor brought me down to mother earth by warning me that he was giving me the contract against other reputed companies and expected my personal involvement in running the show. I had not seen such a dedicated Fouji (Military man)in my life. I took it up as a challenge and started working on manpower.My great new field officer with full confidence promised me to muster the strength in a week’s time. Most of the private sector contracts, the client expect you to change the entire staff. They may give exemption to retain 20-30%ofthe old staff for the sake of continuity if they were really good. In those days,my competitors were the high profile companies like G-4, SDB Cisco with foreign investment. They could muster the strength in no time and start operations. We were preferred because our quotes were half of theirs. This was the primary reason small players like us could sustain in the market. My service charge was 8% against the big player’s charges of 15%.

After a week, my great field officer could muster barely two or three guys. I gave an advertisement in the local newspapers. The place of the contract was near the famous Guindy Industrial estate in Chennai.In those days, the most sort out security guards were from Assam. In fact, near the Guindy industrial area, there is a slum which was named as Assam colony. I used to sit in the colony early in the morning and try to catch the Assamese guards. That was the time they were either going or coming back from their duties. Some of them were living with their families. Finally, I managed to get one Assamese Supervisor Gogoi, and through him, ten-twelve guards. From the newspaperadvertisement,all I could manage was an Anglo Indian supervisor and a few Tamil guards.

Things went well for two weeks with a few initial troubles. In fact, Col Inbaraj clearly told me that I had to be present at the site every day. With great enthusiasm, I did exactly so and trained the guards, rushed to the spot where my requirement was there. Gogoi was a seasoned campaigner and an expert in handling the Administrative officers and the guards. However, the Anglo Indian supervisor, being new to the job, could not handle the pressure. One fine day, after two weeks, he just left the uniform on his desk and vanished without a word. I had no other option but to do the duty myself.Being the owner of the company, it would be embarrassing for me to do the day-duty so I did the night duty until I found another supervisor. However, I could not find a suitable field officer to handle the necessary affairs.

Managing daily operations takes a lot of your time and it eats away your precious time for marketing and expanding the company. Finally, I found an Ex-BSF soldier. He worked with me for almost three years and he became my man Friday. He was really good at handling clients as well as guards. From 2007, with a humble beginning,by Jan 2010, we expanded to almost 180guards. Some of our clients were RBS, Star Insurance Corporation, Tamil Nadu Salt Corporation, Madras Medical Mission (a multi-speciality hospital), Indian Maritime University, Nokia showrooms and three big apartments.

Then, suddenly, I lost RBS to SDB Cisco and the decline started. This is how the foreign-invested companies were putting small-time businessmen like us out of business. With a heavy heart, I missed and lost a good client. To add to the agony, my operations manager wanted to start a company of his own. It was difficult to find a replacement for him. The general trend in the security field was on the decline because of big players. Slowly, the people from Bihar started coming in as guards followed by guards from Orissa and a few other northern states.

There were some incidents of house-breaking, petty thefts, murder and rape caused these outsiders and the same was as usualexaggerated by local media to put pressure on Tamil Nadu police. Therefore, they introduced new policies and stringent measures for recruiting labour from outside the state. Big companies had their agents in these states and they could get police verification certificates, educational qualification certificates and could verify their address. However, small companies like mine could not afford all these verifications. We just went by whatever documents were available and recruited labour. Big companies had their training institutes whereas ours had only on-job training.

Meanwhile, the Tamil Nadu police brought another order that all the security companies were to apply for a license from them. Moreover, they preferred only ex-servicemen/police officers as proprietors and Managing Directors. It was a big bureaucratic hassle and ultimately, many small companies had to shut down their business. The process involved inspection of the companies by Law and Order, CBCID, and Commissioner of the police departments. It led to convincing the authorities or ended up paying a bribe to a few corrupt officials. The clients were not willing to give a contract without the Police license.

The next sad part of the business was the Provident Fund contribution. As per the existing rule, the contribution was to be calculated on the basic pay plus dearness allowance. The employer’s share was 13.65% and the employee’s share was 12%. If I remitted the exact amount, the labour would get only peanuts. We would not be able to get even a single labourer if we went strictly by the rule. Therefore, we reduced the basic plus dearness allowance to 60% or so and paid less contribution so that their take-home pay could be more. Every month we had to remit the contribution before 20^thand submit the Chelan to the client next month. The payment would not be cleared without this Chelan. The inspectors from the PF office targeted us mainly during the festive season and we had to look after them to avoid observations and inspection reports. We had a meeting with the PF commissioner and he mentioned that they looked for only big fish, but the big fish found their own crooked ways to escape the net. Voluntary contribution or abolition of PF for the contract labour could really help the micro or small companies like us.

Next was the ESI department. I can boldly make a statement that not even less than 10% of the employees were benefitted with this scheme. It warrants that ESI would be beneficial only in case of death, losing limbs and major ailments like cancer, bypass surgery, etc. 80% of the employees did not have or even bothered to make an ESI card which authorised them free medical benefits in the ESI hospitals. My suggestion would have been - Abolish this and allow the proprietor to go for the medical claim and other insurances which are easy to pay and claim.

Thank God, before publishing this book, the reduction in contribution for ESI was announced.

I started planning for an alternate business and as luck would have it, I applied for BPCL’s company-operated petrol bunk in early 2010. They are called COCO(Company-owned company-operated) petrol bunks. They considered Ex-servicemen officers for the contracts. Along with me were sixteen other candidates including a few Brigadiers, a few colonels and an MNS lady officer. Three bigwigs of BPCL interviewed me and grilled me down. Since I already had three years of experience in the business, I could answer most of their questions. They checked my movable and non-movable assets and were happy. At the age of fifty facing a tough interview like this made me realise the great saying that age is just a number.

The initial contract was for two years extendable to one more year depending on the performance satisfaction. I lost twenty-six employees in my security contract but got seventy-two labourers and a few managerial vacancies. The petrol bunk was 24x7 and the average turnover was around 1000 Kilo Litters per month, both petrol and diesel including the premium high-speed diesel and high-speed petrol. At a time, eight cars and ten two-wheelers could be fuelled.

High-speed petrol is used for race cars and during the racing season, clients used to take petrol in barrels. It was a very satisfying tenure especially working for the profit-making PSU(Public sector undertaking).My house was just one kilometre away. Every day morning, during the change of shift at around 06:30 am, I used to come by my cycle. I mustered all the staff and conducted it like the Military style of the changeover, checking them for clean uniform, polished shoes, haircut and a cleanshave.

The outlet manager Mr Swaminathan was an honest and dedicated officer and an asset to BPCL. Though we had heated arguments and issues, the end result was for the betterment of the outlet. Together we caught some of the supervisors and pump operators who were stealing petrol in the night and dismissed them. These expelled labourers had some link with local goondas, who came with assault weapons like knives and swords in the night looking for me. Luckily, I was not there and they injured one of the night duty operators. He got a deep cut in his hand and had to be operated. We filed an FIR but they could not trace the culprits. In fact, it was very kind of BPCL to recognise my service and offered my wife a dealership in Chennai. Because of the huge investment involved, I could not follow it up.

I was struggling all the while to get a manager to look after the security and petrol bunk. I started losing my security contracts slowly and the petrol bunk contract also finished in May 2013. Slowly, I was losing my interest and planning for some alternative business. I have already mentioned that the two major aspects affecting service industry are PF and ESI.

Third and most important aspect affecting the service industry is the service tax and the latest GST. Because of a few culprits,it was like a mass punishment for the rest of the honest owners. My heart is bleeding because of this burden on small-time owners like me. In fact, I quit my company for an alternative job because I paid a 100% service tax. Not only I but also at least 60% to 75% of the owners pay their service tax due properly. To be honest, if a company pays GST as per the existing norms, it is bound to run into red. If I have to write the anomalies of service tax, then I’ll have to write a separate book. To make it brief and to put it in a nutshell for the new and upcoming entrepreneurs, I am sharing my agony of paying service tax in detail.

When I started my company, the service tax was 10.20%. It was hiked to 12.36% in 2015. The initial rule was that you remit the service tax after you receive the payment from your client. For a layman, this means that if a company is raising a bill for one lakh it, will add Rs.12360/-as service tax and remit the amount to the government after receiving the same in your current account. For accountability, the service provider has to file a return half-yearly. This process was manual.

For a vast country like us, having millions of service providers, it became a Himalayan task for the service tax department to monitor the process. Many service providers started taking advantage of this lacuna. They collected service tax from the client and put it into their packet. When the process was manual, more than a million service providers did not even remit one rupee though they had registered in the Service tax department. The concession in payment of service tax to the government was given to the service provider to cater to the delayed payments. The collection was low and created a huge deficit in the revenue received from service tax collection. The rule was changed to paying the service tax dues by 20^th of every month. This rule was brought in by the finance ministry because of the low collection of service tax and the minority of service tax defaulters.

The problems faced by the service providers are that if you do not get the payment from the client by the 20^th, you still have to pay the service tax dues from your own funds. This leads to taking overdraft loans, etc. Things were not improving and again the noose was tightened with a new rule being enforced. As per that, you have to pay the service tax dues by the 5^th of every month. Most of the clients were only interested in PF and ESI Chelan’s, as this directly affects the labourer’s interest and as a principal employer, they were equally responsible for that. Whereas the service tax part of payment did not affect labourers and the clients much so it was all left to the service provider and the service tax department.

Next came another hike at the end of 2015 and the percentage was raised to14. To add to the agony,the latest rule regarding service tax before GST was implemented that the day you raise your invoice, your liability starts for paying service tax. This rule came as a big blow to the service industry and small-time people like me were the worst affected.

Here I would like to mention the name of a few defaulters and briefly analyse the damages they have done to the innocent and honest entrepreneurs like me and so many others.

The first one is Mr Lalit Modi of the IPL fame. Whatever misappropriation he had done before going into his hideout, the main loot in that was the service tax collected from various agencies like TV channels contractors and so many other agencies running into 600 cores plus and the same was not paid to the government.

The second major defaulter, the king of good times Mr Vijay Mallya. Our great media only highlighted the bank loan issue. If one gets into the Kingfisher airlines accounts, the loss to the Service tax, PF department and the unpaid employee’s wages would add into much more than the petty amount of loan he had taken from the banks.

The investigations started on the defaulters by the government and are going on without any outcome. In fact, we are still struggling to bring them to our country. The latest to follow the shortcut was Mr Nirav Modi, and the legacy continues. Most of us know that all of them had some kind of political support and without that, they would not have imagined even in their dreams to do something like what they have done. A God-fearing honest man would never attempt such things.

Here I remember and recall the rise of Singapore and the little nation’s hero late Prime Minister Mr Lee Kuan Yew. He said that he had two options and I quote:

“Either I get corrupted and I put my family in the Forbes list of the richest people in the world and leave my people with nothing ORI serve my country, my people and let my country be in the list of world’s best ten economies. I chose the second option.”

Unquote, Indian Politicians (most) said there were two options for us too, but the second option was already taken by the Singapore PM.

Yes, friends, we need a few more Abdul Kalams and a few PMs like Mr Lee.

Most sincere payers of service tax end up taking overdraft and paying service tax. Further, the PF, ESI and wages to the labour are being paid on overdraft or from the cash reserve kept by the owners. Talking about the delayed payments, both private and government agencies called the service receivers are at fault. As far as the private agencies are concerned, some of them mention in their initial contracts that the payment will be considered only after ninety working days. If you read in between the lines, the holidays will work out to be another ten-fifteen days or so. That means you have to survive for four months paying wages and statuaries like PF, ESI to the labour and the service tax.

The government agencies are not far behind, the delays will be three to four months initially. Why all this? Because of the fact that the competition is so high. To put it very crudely, it is a cut-throat competition. What is the way out? The way the government is bringing in stringent rules for paying wages, statuaries and Service tax must ensure the payment to the poor service industry by both government and private sector agencies cleared in a stipulated time. This is a humble suggestion as my experience in business is very little and my knowledge is very shallow.

Still, I feel I am a successful entrepreneur in spite of all these hardships, struggles to collect payments in time from tough clients and overcoming bureaucratic hassles, etc. Here is what I have achieved as the sole proprietor of M/s Cosmo Protection Services:

The average income per month was raised from a meagre 50k to around two lakhs. The maximum number of labourers during the year 2010-2013 was 203 and my income touched around 4 lakhs per month. During my tenure as a proprietor from June 2007 to December 2015, just in eight years, I bought an independent villa for 54 lakhs, an independent office for 22 lakhs, developed my ancestral houses spending around 20 lakhs and bought a vacant piece of land on my wife’s name for 8 lakhs. I bought gold for my daughter around 500 grams. I gave my son and daughter a good education and both of them became engineers. All tax has been paid without any delay from company resources and the EMI for my house loans are paid without any delay.

No regrets whatsoever. We have to change, avoid taking shortcuts and not encourage corruption. Many of us can become successful entrepreneurs. With start-ups and entrepreneurship booming easily, India can become a superpower soon. If you chase money, it will run away from you. If you develop good business practices, the money will chase you. I wish all young entrepreneurs a successful business venture.

The man who decided my destiny was none other than DrAPJ Abdul Kalam. The first time I heard him and met him was in Vishakhapatnam as a young lieutenant when he was the chief of DRDO. I was so impressed, like millions of his followers and youth of India that I wrote a small poem in Tamil about him and sent it to him.To my surprise, he appreciated the poem and sent me a thanks letter.

During my course at IIM, I saw him at an interview after he returned from the famous Harvard University visit. I quote “When I asked the students what you are planning after your studies, I was surprised to hear the response from most of the students that after studies, we want to become entrepreneurs”. This prompted me to write a letter to the legend of our time and I did so. Promptly, the reply came and I quote “Commander, don’t lock yourself under the luxuries of a cosy corporate job, try to become an entrepreneur and give employment to our countrymen who are in need.” I shared it with my beloved naval course-mates and a lot of friends. I am happy to share with you readers just in the process of making his dream come true, I have been running M/s Cosmo Protection Services for eleven years now and was able to give employment to an average of 11x200=2200 staff and livelihood for their dependents as an average of three each 11x600=6600. This means 8800 to date.

I passed the baton to my beloved wife, son and daughter, and the legacy continues.

Dr Kalam is a man of vision, motivation and a saint not only for me and millions of youth of India but also to the entire world. If we Indians leave the negativity happening around us and follow positivity, then we are bound to become a superpower. And our beloved leader’s dream will come true soon and it may not be as expected by him in 2020 but soon.

Before I conclude, a self-introspection revealed to me that I accepted my limitations in running the venture singlehandedly and left the company for my wife to manage. In fact, now I am totally out of any part of my company. For a small timer like me, paying GST before getting payment from my clients was the biggest challenge. In recent times, we learned that for a big timer like MrVG Siddharta, the pressure was from the Income Tax department. Every finance minister tends to set a target through tax collection; the new FM is no exemption. All said and done we have lost a very enthusiastic entrepreneur who brought down the coffee culture of Europe to our country and truly a lot of things have been done over a cup of coffee.

 The recent display of aggression by the government for tax collection and GST, brought with the good intention of regularising business across the states, has not done justice to the cause. On the contrary, small straightforward businessmen like me and so many others in the country are down. Thank God, I realise this and good sense prevailed over me with the warning bell ringing in time that I am safe. Who knows, I would have faced a tragedy of losing my life had I continued to do the business against all odds?

Finally, the richest place in the world is the graveyard where millions and millions of human beings get buried with their rich ideas without implementing them. I am satisfied with my venture and implemented all my business dreams and knowledge to make it successful. Now my dreams are to write down my experiences and pass it on to society. By doing so I can go to my grave satisfied without any unfulfilled dreams.