Why is it difficult to blog consistently?

I have been rather inconsistent in coming up with new blog posts in this blog. But I admire people who are consistent more than those you exhibit flash of brilliance once in a while. I am just trying to analyse why this is happening to me.

Creative Activity - It requires one to be in best of moods, fresh mind, good amount of energy to keep the creative juices flowing. To think about something deeply enough to come out with a sizable rather meaningful post.

Micro-blogging - Advent of Micro blogging services like Twitter allows us to have half baked/shallow thoughts and yet share it within 140 characters. Then why think deep enough to come out with a full fledged blog post. To argue other way, blogs have been on a rise because of twitter as it allows people to share and converse on those blog posts better.

Changing Interests - My interest in cricket has been constant throughout, that is why majority of my blog posts have been on cricket. Though I am fundamentally passionate in business, my interest about various aspects of business have been changing. Varying from Stock Markets, Software, Marketing, Branding to now Manufacturing. Now I am setting up a factory for manufacturing coconut oil, once it is done my interest will change towards Trading (Copra Purchase and Coconut Oil Sales) and HR (hiring and managing people). One does not develop expertise in anything while his interests keep changing. To have original thoughts and write on a subject, one must be an expert in it.

Discipline - This is by far the biggest reason, why writing is so difficult.

Discipline is doing what we decided to do and not what we feel like doing. (Source).

We often feel like blogging about it when we think about something, but when we sit to organize our thoughts and write about it, we face writer's block. Then it takes discipline to write without quiting.

Writing is a work that matters, and it is our tendency to work on easy things that don't matter.

The first rule of doing work that matters. Go to work on a regular basis. - Seth Godin

Stage Fear - Though we write on the computer alone, there eventually is a large audience that will read it later. That causes fear in us as to what the reader will think about us. Will he spot our mistakes, deficiencies? We doubt our authority on the subject. Actually, what happens is the reader rarely gets into the details and he  mostly believes what is written :-)

Now, should I announce that I would like to write consistently i.e. once a fortnight.

India wins the Cricket World Cup 2011

Sachin Tendulkar kissing the Wold Cup India won

This post is to celebrate India's victory in The ICC Cricket World Cup, 2011. I can't control my emotions as I write this, with tears coming out all over my eyes. Though I am an ardent Test Cricket lover, this world cup victory (though in limited overs format) is my proudest moment as an Indian cricket fan.

Its my 50th post
Writing 50 posts has been a achievement for me as I have been writing blogs rather consistently for last 5 years on various aspects of cricket, business, my personal life and technology. All the posts have been about expressing my original thoughts and opinions. It was never meant to be a source of news/information about any subject. It will always be about me and that it why it is my 'personal blog'.

Dhoni - The Leader/Hero
I would like to single out Dhoni's captaincy and Kirsten's coaching as the most important factors for Team's success. While most of us try to achieve coolness in not preparing before an event. They did all the hard, dirty, uncool things like planning, preparation and practice.
Dhoni, a middle class boy from poorest state of Jharkhand, not known to have produced any cricketers before, no role model to look up to. Having ordinary aspirations like riding bikes, drinking buckets of milk, hanging out with friends. He has come a long way to be remembered as among the best sports leaders of all time.
Whatever Dhoni has been touching have been turning gold. He has taken India to No.1 in Tests for last year and half, World T20 Cup in 2007, now The World Cup, IPL 2010 and Champions League 2010. His midas touch is not just about luck, it is about his hard work, leadership, ability to deal with pressure situation with a cool head and it is basically his personality.
After this World Cup triumph, I would rate him as a bigger match winner for India even bigger than Sachin Tendulkar and Anil Kumble. As in a team game, I believe the biggest contribution a person can make is as a leader than as a batsman, bowler or a wicket keeper. A leader who gets the best out of the team is always more valuable than a specialist who does his job well.

Dedicated to Sachin Tendulkar
Sachin, we know has achieved everything a batsmen can do in Tests and ODIs. 15000 runs and 51 tons in Tests, 18000 runs and 48 tons in ODIs at a batting average and strike rate well above par. And yeah, he hasn't scored his 100th International hundred which he will definitely score sometime. But what was missing from his cup-board was a World Cup.
Virat Kohli's famous words after the match - "Sachin has carried the burden of the nation for 21 years. It's only fair we carry him now".
He has done everything Team India had asked over the years and now the team has won him the World Cup, rather he has himself contributed by scoring 482 runs with 2 hundreds and 2 fifties all against Test playing nations in important games. Waited for 22 years and he knows its value better than anyone else. Ask an Australian player of 2000s, he will tell it very casually “Yeah, I was part of the World Cup winning team”. But to Sachin it is everything, despite having so many other things with him that nobody else have.

How we reached here
Not long ago, just 11 years back, Indian cricket had reached its nadir. Whitewashed by Australia 3-0, whitewashed by South Africa 2-0 at home, never won a Test Series abroad for 14 years and crippled by match fixing controversy. But we did have a bunch of supremely talented players.
Then came Ganguly Wright era when things started turning around. That match in Kolkata and The Series against Australia in 2001 set the tone and laid the foundation for future that we are seeing now. The players in Rahul Dravid, VVS Laxman, Harbhajan Singh, Sachin Tendulkar, Anil Kumble, Virender Sehwag and Zaheer Khan brought the team into a steep ascent. Now Gautham Gambhir and Mahendra Singh Dhoni form the core of this Champion Indian Team.

What this world cup will do for the team
Being good, talented, gifted, excellent, exceptional are all lesser when compared to being “Champions”. We have always known Indians as former, but with great leadership we have transcended to become latter i.e. Champions. Before the CB series win in Australia 2008, India has always been the best team in the tournament only to end up being runners up.
From now they get into any match as favourites, as world champions, no push overs in any conditions. They have the pressure to perform well and win games and series. More than the pressure it gives them enormous self-confidence and belief that they can win anything. Winning they say is a habit and the team will be carrying that habit.

What next?
India has some important tours coming up this year with the 4 Test series in England and a 4 Test series in Australia. India haven't won a series in Australia and South Africa but they have come close by drawing in the recent years. From a point 10 years ago where India would be happy to not get whitewashed, now they go there expecting to whitewash the opponents at their home. They won't be satisfied with just a series win with a 1 test margin.
Gary Kirsten tenure as Indian Coach is over. Ganguly and Kumble have retired. Tendulkar, Dravid and Laxman may retire any time soon. Sehwag, Zaheer, Harbhajan have reached 30s. We may face a similar situation like Australians are finding now. The next generation cricketers who grow up playing limited overs cricket may find it difficult to cope with the rigours of Test cricket.

Leadership Lessons

• Leader takes decisions, which may be against the popular logic, but ultimately he is responsible for his decisions. The buck stops with him. So, he should be free to take decisions based on his gut feel.
• Great Leaders in Alan Border, Steve Waugh and now MS Dhoni have been the practitioners of the saying Tough times don't last but tough men do.
• Don't try to avoid/escape pressure, deal with it. Indian chase had reached a point where they had things under control after a 100 run partnership between Gambhir and Dhoni, but there was still pressure with required run rate still over 6. Gambhir wanted to release pressure by completing his century quickly and also bring the required run-rate down. So, he went for a rash shot and perished. But Dhoni was willing to take the pressure and slowly pushed the game forward just 25 runs at a time. He showed his heroism of completing the game with a six only when it was absolutely sure that India would win, when they were only one hit away from glory and the ball was in the slot for that shot.
• It is not about skills and power, it is about the ability to handle pressure. Sachin and Dhoni have been handling pressure of 1.21 billion people. But Sachin has loads of talent too. Dhoni, except that he can hit those helicopter shots has no special talent as such.
• As a leader of my organization, whenever I am under trouble, I will always visualise Dhoni for the cool head he keeps under pressure.

Apple's Macbook Air - 13 inch - 128 GB

My present HP laptop is 3.5 years old and is pretty slow with Windows Vista ;-( So, it is ripe time to buy a new laptop. Now that I am setting up a new coconut oil factory, I am planning to include the purchase as part of that project itself. For industry purpose I have 2 Dell business desktops. For me as a C-Level executive, I need a laptop that is light and travel friendly, so a Netbook is better than a Notebook.

Here are a few reasons why the Macbook Air's 13 inch, 128 GB model is appropriate to me

• Adequate - Presently I use 15" monitor, I am not sacrificing by coming down to 13" as the screen resolution is better. I use this mainly for business, so no movies, videos, music and pictures that occupy most space. If required I can always store them in external hard drive. I mostly browse, email, social network, use spreadsheets and do word precessing. I only need basic softwares and Office tools. So the processor speed of 1.86 GHz, 2 GB RAM and 128 GB Flash Drive is adequate for my needs.
• Travel friendly - The whole device weighs only 1.3 kg or just 1.5 times the 1 litre coconut oil pouch. Present laptop is about 3 kg, carrying it with the charger was severe on my back. High battery back up of up to 5 hours means I can be more productive while travelling.
• Data is safe - MAC OS X is UNIX based and very secure. Also the fact that it enjoys much lesser OS market share, not many bother to write viruses for them. So, one need not buy a separate Antivirus software. Mechanical Hard Disk drive and Optical drives are absent, so that drastically reduces the noise levels, cooling requirements, power consumption and space. Hard disk is replaced by NAND Flash that has no moving parts and is less prone to failure. That means there is no need to constantly format the drives.
• Fast - Reviews say they boot in 10 seconds and shutdown in 5 seconds. My present laptop just takes 30 times longer! Use of flash drive for secondary storage makes a major impact with speed. Reading from Flash memory is almost as fast as that from RAM. Majority of the work involves reading like loading of softwares or data files.
• Experience - Based on what my friends have told me, Apple gives an ultimate user experience with simple and intuitive interface. It may take some time to get used to the system but once you get used to it, you end up being an Apple fan or an addict.
• Image - Owning an Apple products takes me to a different league, the group that is different from ordinary Windows users. Apple computers start from $ 1000 onwards only, and its competitors claim that to own an apple computer one needs to pay $ 500 Apple tax, i.e. for a similar hardware configuration in Wintel (Windows on Intel) will cost $ 500 lesser than that of Apple. Apple products are considered to be innovative, simple, intuitive, classy and user friendly. It will be a great feel good factor for me to use this product and to show it off to others ;-)
• Price - The price is close to Rs. 80,000 and is on the higher side. I spend a majority of my day with my computer. When I am spending so much on buying the best quality machines for the manufacturing process. Why not buy the best personal computing machine?

Significance of the number 1089

Every number has something fascinating and a unique property about it. One such number that came to my mind was 1089 when I was about to write (tweet) my 1089th status message on twitter.
The message reads (The tweet has been elaborated here as there is no 140 character constraint)

Take any 3 digit number, difference between first digit and last digit should be greater than 1. Reverse the digits. Find the difference. Reverse the digits in this number (difference). Add them to get 1089 always.

For example, let the number as 109, reversing the digits gives 901, difference between them 901 - 109 = 792, reversing the digits in the difference gives 297, adding them gives 792 + 297 = 1089.

This is not something that I discovered, I just know about this property through some source long time back. But I will attempt to show why this happens.

Let the random 3 digit number be abc. Its value is 100a + 10b + c
Reversing the digits gives cba. Its value 100c + 10b + a.
Difference between them assuming that a > c (for sake of simplicity of analysis)
|abc - cba| = abc - cba = 100a + 10b + c - (100c +10b + a) = 99 x (a-c)

Let, |abc - cba| = xyz (another 3 digit number)
xyz, then is a multiple of 99 i.e. of both 11 and 9.

Properties of multiples

• In multiples of 9, the sum of digits is divisible by 9
• In multiples of 11, the difference between sum of all odd and even digits is divisible by 11

In this case,

Since xyz is divisible by 9, x + y + z is divisible by 9 or x + y + z = 9 or 18. It can't be 27 or more.

Since xyz is divisible by 11, x + z - y = 0 or 11. It can't be 22 or more.

If x + z - y = 0, then x + z = y, then x + y + z = 2y

2y cannot be 9, it can be 18, so 2y = 18 or y = 9

If x + z - y = 0, then x + z = y or x + z = 9, this is possible

If x + z - y = 11, then x + z = 11 + y or x + z = 20, this is not possible

So, we can conclude that, y = 9 and x + z = 9.

Reversing the digits in xyz, we get zyx.

Adding the 2 numbers, xyz + zyx = 100x + 10y + z + 100z + 10y + x

Total = 101(x + z) + 20y

Substituting for x + z = 9 and y = 9, we get,

Total = 101 x 9 + 20 x 9 = 909 + 180 = 1089!

By the way, 33 square is 1089. 99 x 11 is 1089 and 121 x 9 is 1089.

Should I change my name to 'C'eshava?

While working at Tata Elxsi, we had a client manager whose name is now Chris Malakapalli. He is basically an Indian who went to US for his higher studies and settled down there. His name was Krishnakanth which was later Americanized to Chris.

Now my reason for changing (just thinking ;-) from Keshava to Ceshava is somewhat different. My uncle (@gmsbhat) in one of our twitter conversations suggested this because I have a liking for things that start with letter ‘C’.

Cricket/Cricinfo – I am a diehard fan of cricket which for me is Test Cricket and First Class Cricket. I now read and comprehend all the articles written in cricinfo. I always used to start reading the newspaper from last page where the sports section is covered, unlike others who read the 1st page headlines, political news, Page 3 etc. I wouldn’t just read all the words, I would also read between the lines, analyse, interpret and think about them. I pride myself in remembering the various statistics, records and results. During my school days, I used to play underarm tennis ball cricket from dawn to dusk. In my bid to learn overarm leg spin bowling I developed a unique Paul Adams style of delivery.

Coconut/Cocoguru – The business that I am into is about Coconuts.  The brand and company name is Cocoguru. I entered this sector because of the value Coconut offers. Also it is made easy by the fact that my father has already started coconut oil manufacturing more than 30 years ago. Every part of Coconut tree is valuable and is called ‘Kalpavriksha’. Coconut oil is the most complete oil, edible, cosmetic, medicinal and industrial. In short it is simply nectar.

Computer/’C’ – I am a Computer Engineer by qualification. I used to enjoy the course because my creative juices found good opportunity while programming in it. I used to write simple game programmes, simply browse through linux source code appreciating its beauty. I used to program them in ‘C’ language though I had learnt a bit of C++, JAVA, PERL, Shell script, html etc. Somebody used to call me K&R (K&R stands for Kerninghan and Ritchie, the founders of ‘C’ language), my name being Keshava Ram also has K & R in it. People who were jealous of my programming skills used to criticise saying I was only good at ‘C’. They think it is just about knowing the language, but I think more about understanding the computer hardware, proficiency in mathematics and logic, efficient use of Data Structures and Algorithms and writing clean code using the principles of Software Engineering.

Cycling – I love cycling even if we ignore the fact that it is a good exercise, environment friendly and economical. I had written about it earlier in my blog post.

Chess – I also like Chess and I claim to be an above average chess player. It is a simple game (64 black and white squares, 6 types of pieces with simple movements) with infinite possibilities. It is a game that tests a players’ strategy, tactics and competitive/combative spirit. I pride myself at having those strengths. Game has no dependence on little externalities like weather, location, time of the day, toss etc. Luck has no role, it is all up to how one plays in the given game. My biggest moment in this game is winning the VTU championship for college in 2002 at Ranebennur. I couldn’t pursue this game deeply because of lack of partners, as it was perceived as a boring game. Now I keep getting addicted and withdraw from chess.com

CAT – Getting into business has been my dream career. Being from a Science/Engineering background, I wanted a formal education in business i.e. MBA. I always believed in studying at the best colleges hence wanted to have a shot at IIMs by appearing for CAT (Common Admission Test). CAT has 3 sections – Quantitative, Logic and English. I was very good at first two but equally poor at English. I used to prepare for 80% of the time on English, yet achieve poor results. This was because of my lack of aptitude for the subject. I had made 4 attempts at cracking CAT and failed each time. Though my score kept improving from 88 percentile in 2002 to 97.5 percentile in 2006, my below par score in English would prevent me from getting elusive IIM calls. Each year I used to prepare sincerely despite my day job. I had made a lot of sacrifices in those 4 years for this purpose. In the final year I decided that I am definitely going to do an MBA even if it is not from an IIM. Now, I have no regrets about the choices I made.

There will be many more 'C' words that I have been associated with, but the above mentioned words are the ones with which I have deepest association.

India is really the No.1 Test team

Just before the final Test of the India Sri Lanka series, I had written in my facebook status that India won at least one Test in every series India played since the Pakistan tour in Jan 2006. This includes even the series we lost in South Africa (1-2), Australia (1-2) and Sri Lanka (1-2). We have shown this consistency over a sufficiently long period of 4.5 years.
Even Australia doesn't hold this record as they failed to win a test in India  when they lost the series 0-2 in 2008. In the same period Australia has lost same number of series i.e. 3 to South Africa (1-2), Ashes 2009 (1-2) and India (0-2). Ashes 2005 loss though doesn't belong to the period under consideration.

India's next series is against Australia for Border-Gavaskar trophy in October. India will start the series as favorites, does it ever happen that Australia start a series as an underdog? Such has been India's form and dominance in Border Gavaskar trophy in which India won 10 and lost 10 in 26 matches, more importantly won the trophy 5 times out of 7.

Team composition-vise India has the best batting lineup that can only be imagined in dreams. Sehwag, Gambhir, Dravid, Tendulkar and Laxman are those players who complete the lineup. Need I say more about batting? Cool headed, smart, charismatic leader in Dhoni to add to his reliable wicket keeping and batting. Highest wicket taker (355 wickets) among the bowlers still playing in Harbhajan. Mature, accurate, dead wicket bowler in Zaheer Khan. Promising spinners like Prahgyan Ojha. Still bowling needs to improve to consistently get 20 wickets. But great bowlers are rare with any team in the world not just India.

I strongly believe success in Test Cricket is not about having players with great skill, India always had them. It is about how players react to pressure, their patience, concentration, intensity in the contest over 5 days, how team handles situations. India showed enough fighting qualities over the last few years.

Taking example of the last test at Colombo.

• Arguably the weakest bowling lineup created enough chances at took 20 wickets not by bowling the best deliveries but by forcing errors in batsmen due to sustained pressure.
• New ball spins and bounces more, but once the ball gets old it is easier to play. Indian batsmen smartly used this fact to their advantage in the run chase.
• Indian batsmen have this propensity to hit boundaries to score runs but when Sangakkara spread his field, batsmen curbed their natural instincts and collected singles.
• While chasing a tricky target like 250 and having lost 3 wickets, batsmen generally get into their shell, look to defend and survive, forget about scoring runs. But Tendulkar and Laxman batted positively, scored runs briskly to ease pressure.

This Indian team grabs most opportunities and doesn't snatch defeat from the jaws of victory. Earlier we have lost to West Indies chasing 120, lost Sydney Test with 5 minutes remaining and lost Chennai Test to Pakistan by 12 runs. Instead now, we have saved Napier test by batting for 7 sessions after following on, won Chennai Test against England chasing 387, just won Colombo Test chasing 256, drew the Lord's test with 1 wicket remaining. But we haven't been able to finish matches that should have been won - against Pakistan at Bangalore, against England at Oval and against New Zealand at Wellington.

Earlier India used to start a series as favorites, win the 1st test with ease, draw another test and somehow lose the final test to share the series that we should have won. Like at home against Pakistan in 2005 and England in 2006. Instead now reverse is true like in England in 2007, in Sri Lanka in 2010.

India does not have the best Win count or percentage as Australia does because India mostly plays in placid pitches or during rainy season when matches usually end in a draw.

Critics can say India reached the top by fluke (after winning home series against Sri Lanka) but India has stayed there for 9 months now maintaining a larger margin from the next best team.

Why VVS Laxman isn’t in the limelight?

It is a good time to talk about Vangipurappu Venkata Sai Laxman.  As he has just helped India win the Colombo Test with an important unbeaten century.

He is always considered to be part of the golden Indian middle order batsmen (Dravid, Tendulkar and Ganguly being other) but never as an Individual great like others. To me immediate association with Laxman is his monumental 281 and his stylish wristy shots on onside. He doesn’t hold too many individual records like Tendulkar, Dravid or Sehwag. But he is a good player in crisis situations and along with Dravid form among best batting partners in world cricket.

Those who hadn’t realised his value in the team realised it when South Africa toured India for 2 tests in 2010. He missed the 1st test and India lost it, he came back for 2nd test, scored a century and India won it. It is not mere co-incidence; he was the very reason for the difference in result.

Personal records

Unlike Tendulkar, Dravid or Sehwag who have plenty of Individual batting records to their name, Laxman holds no such records. His achievements are severely dwarfed by those of his partners.

• For a player who has played 113 tests, he has scored only 7415 career runs. To put that in perspective, Sehwag has accumulated 7039 runs in only 79 matches. The main reason for this difference is that Laxman bats at No. 6 while Sehwag opens.
• Laxman averages only 47, used to average 43 some time back despite 29 not outs. On a stand alone basis it is a very good average an New Zealand/England batsmen would be extremely proud of it. Again putting that in perspective of his peer’s averages – Gambhir – 53, Sehwag – 54 (with 5 not outs), Dravid – 53, Tendulkar – 56.

But he is among the best difficult pitch players and man to handle crisis situation. How deep can a crisis get than trailing 1-0 in the series and being asked to follow on? How has he responded, scored 281 and turned the series from the verge of losing 3-0 to in fact winning it 2-1 and start a cricket revolution in India.

His best knocks otherwise aren’t those big hundreds, they are those short little cameos on difficult pitches. Here is an abridged list of few such match winning knocks that people don’t easily remember.

• 54 vs South Africa at Ahmedabad on debut in 1996
• 69 vs Australia at Mumbai in 2004 to setup a stiff 4th innings target of 107!
• 79 vs Australia at Perth in 2008 to take India’s lead past 400
• 73 vs South Africa at Johannesberg in 2006 to help India win its first test in South Africa
• 50 vs South Africa at Kanpur in 2008
• 69* and 74 vs West Indies at Trinidad in 2002
• 65 and 66 vs Australia at Chennai in 2001 where he led India to a difficult 4th innings chase of 155
• 72* vs Pakistan at Delhi in 2007 where his partnership with Dhoni helped India match Pakistan’s 1st innings score

None of these knocks would help in improving one’s records but are an immense benefit to team’s cause. Yet is questioned about his team play as he doesn't bat well with tail.

Test only player

He has been stereotyped as a player who can only play tests. Many don’t remember his series deciding hundred in last ODI at Pakistan in 2004. But one or two innings don’t make you a good player. His poor running between the wickets is his weakness that justifies his omission from one day squad. India plays close to 40 ODIs an year and only 8 tests hence Laxman doesn’t fall into majority of fan’s radar.

Laxman is not known for big hitting as he has hit only 4 sixes in each format his entire career!

Money and Advertisements

He had a disastrous stint in IPL, with him as captain his team Deccan Chargers finished last. He also had an ugly spat with his team-mate Shahid Afridi who no where matches Laxman’s class and stature.

He had an option to be the Iconic player for the team and get about $ 1.5 million but opted out of it for $ 450 K to allow his franchise select players like Symonds for $ 1.35 million.

His reserved nature, lack of individual identity, typical south indian accent, sporadic appearance in Team India hasn’t helped him in getting lot of endorsements too.

coco guru - more brand elements

Update

The Logo for Cocoguru has changed to a simpler one.

Tagline - "Natural Goodness of Coconut"TM

• Reinforces that the brand is about coconut
• Coconut is good naturally for your health. We will slowly start advertising to dispel the myths about cholesterol in coconut.
• Brand delivers coconut products with minimal processing to deliver its natural goodness

Logo

Colors - Only 2 colors are used, they are green and white. White represents purity, innocence and coconut meat. Green represents natural, organic and environment friendly.

Brand name in different lines - While the name appears in packaging especially bottles, there is constraint on width or horizontal space. For 8 characters in cocoguru to be in one line, the font will have to be small. Also people may have a hard time to read and remember cocoguru continuously. So, the break up into 2 lines.

Wheel - Wheel is among the best inventions by man. So, it will suggest that the brand is innovative. Spokes are so designed to show that the wheel is rotating and the brand is progressive and moving forward continuously. Circle also represents the cross-section of coconut.

Ribbon - Ribbon is used to give a platform to show the tagline. Ribbon represents silken grace.

Corporate Logo

SRI is the recursive acronym of Sri Rama Industries. Similar to OIL for Oil India Limited and GNU for GNU Not Unix. The colors brown, green and white and leaf are meant to symbolize agriculture oriented business.

Does buying pre-owned machines save investment/costs?

When setting up a new factory like I am doing now, one is often confronted with a dilemma, should I buy new machines or buy pre-owned (second hand, used) machines at a lesser cost?

Used machines are ready for sale by those who have either shut down their unit or expanding/modernizing their unit. Many times they have not been used for long time, in good working condition and available at half the original price. Such offers look very attractive and is tempting for many cash strapped entrepreneurs. My dad and I visited a couple of such Oil Mills in Kochi and Kangeyam and we were pretty much convinced about buying them out because of the following reasons

1. Quick Project completion - To setup a factory with new machineries requires the lengthy procurement process i.e. Seeking quotations, selection of vendor, negotiations, payment, time for making the machine, transportation and installation. Also buying of accessories for the integration of the machineries to form a production system. For used machines, time till installation is significantly reduced because all the machines are already available at one place.

2. Investment size reduces to 50% of the budgeted investment. Extra money remaining can be used as working capital.

Within a week of this I visited Chennai for a Packaging exhibition and stayed at Raghuram's place there. While discussing my idea, he advised caution. He told me to focus on setting up a state of the art factory with latest machineries. Also he pointed towards the depreciation I can claim. His ideas then didn't affect my opinion. But later while travelling back, I started thinking deeply about what he told. And I came up with the following reasons to suggest that it is not that attractive despite the apparent attractiveness.

Investment - Assume used machineries cost 50% of that of new one.

1. Bank Loan - Banks don't easily give loans to buy used machines, they are comfortable funding machines where the supplier is a manufacturer and has quotations to back the price. Required margin money on machineries is 25% of its value or the bank funds 75% of the machine. While for used machine the buyer has to have 100% of the value or 50% of that of new one. So, initial cash outlay for new machines is 25% vs used machines is 50%.

2. Subsidies - Taking the case of my project of setting up a coconut oil mill. Coconut Board gives 25% subsidy on total investment, Directorate of Industries and Commerce (DIC) gives 15% subsidy, there are a few other incentives also. In short about 40% of total investment is subsidized by government. To get subsidy the industrialist must have gone for bank loan for funding. Both banks and government fund only for new machines. So, it is 50% for used machines vs 60% for new machines scenario. Used machine's advantage is only 10% of the total value.

3. Depreciation - Claiming depreciation on assets helps in showing the investment as an expenditure, this helps in saving tax to be paid on profits. Assuming tax rate of 30%, for new machines 30% of the cost of machines can be saved in taxes while for old machines 30% of 50% value i.e. 15% is the tax saved. So, new machines help in saving 15% more tax than old machines.

After considering Subsidies and Depreciation alone, new machines have 5% advantage (-10% subsidies + 15% depreciation) over used machines! This much is sufficient to answer the question raised in the title of the post. Wait, it is not over there are lot more things to talk about in favour of new machines.

Features - New machines have more and better features compared to the old machine. More importantly, the buyer can get those features that suites his requirements.

Efficiency - New machines would be more optimised than old ones and they will perform better, faster and with lesser power and consumables.

Maintenance - New machines are less susceptible to breakdowns as compared to old machines. Some of the problems encountered with older models would have been sorted out with later versions. That means lesser downtime, better productivity, lesser cost in buying spares and service.

Warranty - New machines come with one year warranty, few free services, installation and training.

Life - New machines have longer life and gives more time to realize value out of the machine.

New machine will give peace of mind (most precious commodity) to the businessman and allow him to concentrate on his business than on the machine. This enables him to keep him ahead of the competitors and better serve the customers.

Similarly, throughout my professional course (BE and MBA), I have always bought new text books and have never been a fan of photo copies or used books.

Does it make business sense to pay taxes?

We see most businessmen do everything they can to avoid paying taxes (I don't mean tax planning as per rules). They common reasons they cite for this are

• Our field is very competitive, other's don't pay, then how can we pay?
• We already have very low margins, if we pay taxes we will make losses
• Anyway the money we pay in taxes are wasted, then why pay?

They are right. There are also other real challenges in properly paying taxes.

• Need to maintain full accounting system - requires knowledge of accounting & tax laws, paying the chartered accountant for his services, dedicate a staff for book keeping.
• Tax officials still claim bribe even when you maintain 100% accounts. Problem is that the bribe amounts are higher than when you don't maintain 100% accounts.
• Many customers are not willing to pay the tax.

Despite all these challenges, I contend that it makes perfect business sense to pay taxes. I will stay away from moral or ethical issues here. I won't say that we need to give back to the society/government etc. My main point is that not paying taxes gets the business into a vicious cycle and severely hampers its growth prospects.

1. Consistency and Simplicity
Maintaining full accounts gives you consistency of Data. You can show the same figures to anybody be it the bank, VAT, Sales Tax, Income Tax, Investors and Management. If somebody asks for your Sales data, you don't have to worry as to who is asking it. With this consistency comes simplcity that allows you to focus on important business issues (how to increase customer value?, how to reduce operating costs? how to get the best out of employees? etc). Instead of worrying about how to escape that government official, how to manipulate data, how do we explain this inconsistency to them etc.

2. Fund Raising and Valuation
Valuation of the business is directly proportional to the sales, profits and assets. Declaring less of them to avoid taxes undervalues your company significantly when you look to raise funds. E.g, if you profits are 1 crore and tax rate is 30%, valuation is taken as 10 x profits. When you declare 1 crore profit, you pay 30 lakhs in taxes and business is valued at 10 crores. But if you instead declare only 10 lakhs as profits, you pay only 3 lakhs in taxes (saving 27 lakhs in taxes) but getting only 1 crore in valuation. In a bid to save 27 lakhs in taxes you lost 9 crore in value.

3. Doing business boldly
When you don't pay taxes, you need to hide your assets, hide information, do only cash transactions. In a bid to hide from tax officials you importantly hide yourselves from customers/prospects. You can't advertise, you can't transport your goods, you fear government officials.

4. Use Government Incentives
Karnataka Industrial policy this time gives Subsidy on Capital Investment & Interest payments, has no tax on electricity and no APMC cess for a few years, no stamp duty, no conversion fine and so on. All these incentives can be claimed only when the records are proper and necessary licenses are obtained. The value of these incentives are much more than the money paid in taxes.

5. Paying Tax doesnot make a Profit making business into a loss making one, it only reduces the extent of profits slightly. VAT introduced in 2003 is such that you only pay tax on the 'value added' than on the 'value sold'. So the tax paid in inputs can be offset from the tax to be paid for outputs which significantly reduces your tax burden.

6. Gives you a correct picture of your business
"You can only manage what you can measure". Accounting gives you that measurement and hence a clear picture about the health of the business. Getting into the details will let you know what went wrong and how it can be corrected. Pilferage & thefts are common problems businesses have to face, inconsistency in stock date will give necessary signals. If proper
records are maintained, the owner/manager need not be physically monitoring the activity, he can delegate the responsibility and just check for accounts at the end of the day. This frees the management from day to day operational issues, allowing him to focus on strategy and growth.

I heard Bharath Goenka of Tally in a talk saying

The life of the business reduces significantly with every mal-practice it does.

You don't be ethical because it is good to be but because you are selfish