 Hi everyone, this is Sonali. Thank you all for coming out sometime for attending today's episode Financial Management to Help Unlock Business Growth. To all the attendees out there, please type in any questions you might have in the Q&A section and we'll try to answer as many as possible at the end of the session. I would now like to welcome our speaker, Mr. Gaurav Mariah, Chairman and Founder of the Franchise India Group. A very warm welcome to Thank you Sonali and thank you for hosting this webinar every week. Welcome friends and welcome to Business Sex Academy. This is the second series we've been doing. We finished one series of 30 episodes on how to value your business, how to scale, how to find an exit and how to invest into your opportunities. And this series was on a business course. We talk about one topic every time and today's topic is on financial management. And I would like to make it very interactive so you can use Q&A box. This is about a 30-minute session. We'll talk about how you can best achieve your financial management, how it is so important, especially for early stage and mid-sized companies. Business Sex is a platform of franchise India where we work with companies to help them to scale, help them to raise capital and also find an exit if they are looking at it. I do another webinar which is every Friday evening on exit planning. So that's also an interesting webinar if you want to be part of somebody who wants to look at planning to exit the business and getting the right evaluation that also can be very helpful. And there are many other webinars we've been done. This is a tenth series, a tenth episode. We've already finished the tenth one and so if you want to really revisit the nine previous episodes, they're all available on our Facebook group. So that's also going to be a helpful resource for you. So let's get started and let's understand financial management and financial management. I'll probably go and cover about seven different topics which are part of financial management. But starting with that, it's a certain model for what I call a combination of knowledge and disability. How you continue to build knowledge from a lot of data which comes from your enterprise and a company and how you continue to put a discipline on every single function of your business. It's also very important for you doing financial management for your organization, especially for smaller businesses. And it's very important in the early days you put some kind of a strong discipline in the structure and that would help you later when you start scaling the businesses. And we've seen a lot of times when you go from a relatively early background to go and scale. Issue is not about getting more customers, it's not about getting driving your top line. Always issue comes around how do you are financially designed as an organization and sometimes you run out of cash. So very important aspect and especially these days is how do you manage your cash flows? How are you managing your cash flows? How are you tracking your business performance on a regular basis? That's very, very important. What are your short-term and long-term plans which are very important? How you want to execute that and what it takes to really define those plans? We'll talk about that and also maximizing opportunities. Sometimes opportunities strike you and has a very short window to do that, which may mean that you will suddenly require a lot of capital for you to go out and maximize that opportunity. A lot of times you miss an opportunity because we don't have that kind of a bandwidth, both in terms of resources and our financial bandwidth that we will be able to do that. And in the current time, especially with the times which we are all living in, it's a very changing times. It's a very, every day you have a different circumstance to do that. Like for example, one of the businesses I'm advising, the last two months when the lockdown happened, they had absolutely crashed the sales, but we clearly knew that there was a very strong pent up demand, a very big pent up demand which will start from 1st of June and that company we really saw in the month going and building it up. But that would mean that they were absolutely planned that they won the lockdown, open up, their resources were there, their finances were there, their supply chain was in order. So they were able to maximize. I know there are competition, a lot of competition was there, which were not able to manage. They were just coming up and a lot of people really are doing that. In issues like these, what happens in our current environments, you might get short windows. These are windows of opportunities. And if you're not financially well-designed, you will miss these windows and you will not be able to do that. So you need to really keep up what I call a very, very strong and proactive approach. Financial management is also a combination of how do you really keep eye on your day-to-day management part? That's very important. And also on the broader strategic viewpoint, which means you have a long term viewpoint on that, but that has to match with day-to-day management. And you see even the larger companies, and you can take a classic example of Anil Ambani Group, you see they had a very strong strategic viewpoint on businesses, which means that they had a long term contract, especially if you look at the businesses like Reliance, Infra, Power and so on and so forth. They were very strong, long term view on that business. And that's why sometimes markets reacted very well for them, but they were losing on their day-to-day management and cash flows and so on and so forth. So the burn was increasing, the cost of capital was increasing and the businesses eventually were not able to sustain. So unless and until you create a combination of these two things, one is your day-to-day management and defining what is required and also a little bit on long term strategic planning. One question which I would really start with before I go on my seven points, which are part of the financial management, is a question which is very important. Do you think yourself, and this question is for everybody, you can answer it on Q&A box if you really feel that, how you are structured as an organization today and what kind of financial skills you have in your enterprise. And that's something which is very, very important. Sometimes business owners are running their own finances and they don't have strong financial skills in their enterprise, which means that they would have a little view on the business. They would not have a very realistic view and they would also not be able to create bigger possibilities and that's what actually small businesses sometimes struggle because they don't have those kind of skills. So be honest to yourself and really talk about that. Do you really have that required skills for a financial management and if not, then you need to engage somebody. You need to engage somebody who is a specialist, maybe hire a CFO. If you don't have a good CFO, then you probably would need to hire somebody as a consultant who can put some hours and there are a lot of good financial planners which are available in the market where you can work on a few hours with you every week to really talk about a lot of things which are required in your business. So that's our first point. That's very, very important to be very honest about seeing that do you have that kind of financial skills in the system before you even want out to put up a full financial management. You also have to maintain what I call the reasonable transparency because sometimes financial management looks like it is between the CEO and the CFO of the company and they just do their understanding and putting the viewpoint on that. But actually no, I have realized that financial management is taking every stakeholder in the part of the decision making. Unless and until every stakeholder is important and understands, then it will all pile up to a larger goal, otherwise it doesn't work. Like for example, you have a marketing department. If the marketing department doesn't know how to really go with the very firm idea of budgeting, what do you want to really budget for it, what do you want the outcome of that, what is your cost of acquisition of customers, all that is their discipline. So unless and until we clearly have all the departments and your employees are participating into the larger financial management, it would never work. It would never work. So even from a productivity, if you want to really be very open to your employees about what is the productivity expected from them, what is the cost of people which is we can afford in the organization, what kind of a throughput you want from every sales or business development person in your organization. So you have to have what I call the reasonable transparency. You cannot give everything out because sometimes there's a lot of confidential data, but there has to be a reasonable transparency which actually aligns people to for a larger goal. And that's something which is larger companies, public companies are very good at it. So everybody can read their financial statements, they're public in nature. So they know what their margins they're operating on, how they're going to improve their margins month on month. You need to also be putting some kind of a cultural input in that business, then only your financial management will work. The second part is about your business planning, how your business planning is stacking up, how you are really designed your business. What is your what I call short term and a long term goals? This is very important. Very, very clearly what is the short term goals from your cash flows viewpoint. Short terms are really driven from your cash flows. What kind of cash flows you would need to really get in your business and long term goals are much bigger on terms of the shareholder value or dividends you want to really achieve on the business and so on. And overall profitability or also building a larger financial just to make future opportunities and investment to do the opportunities and so on. And it's also part of your scaling up mindset, you know what how you really look at scaling up. Unless and until you have put your strong financial discipline don't even venture out scaling. I see a lot of people go into scaling up without even defining and checking their financial health and that's a dangerous situation to be in because you are scaling up with some kind of estimates and sometimes it gets overestimating what you can achieve in the business and doesn't work. So you need to really see your short term goals very clearly aligned that achieve those short term goals try to bring in some kind of a predictability in the structure and then go out and you need to also define very sharp objectives, objectives of your 12 month story, 24 months and 36 months. I would say put this very clearly for 12 months, understand, see the gaps, what didn't work, how it changed, how your budgeting changed that's all is part of a strong business planning. So now I'm telling my clients and say you have three quarters and hopefully if the third wave is not coming then these three quarters are very important to the plan but these three quarters are not about extensive growth. This is about sustenance. This is about sustenance and a very incremental growth but the next one year you need to start preparing for an exponential growth. If your business is good and you can really do that this nine months can set the foundation for your very high growth which you can achieve in the in subsequently the next financial year. So that probably would be your scale cycle and then in the next 12 months don't go and continue to scale but maybe bring in some kind of a consistency, some kind of a sustenance or what you've already achieved. So always try to do a little bit of scale, sustenance, scale, sustenance that's the way business should be done. So define your objectives, define your 12 month objective, 24 month objective and 36 month objective. What is your larger strategy? What are the assumptions you're taking in your business? And these assumptions have to be factfully coming from what you have done from historic data. So what is your historic data telling you how efficient your your in past would be? So sometimes unrealistic answers really come from you know entrepreneurs I'm working with, our clients I'm working with. So they give me a very different data which I can read and they're drastically trying to change that, right? Say for a cost of acquisition for a customer was very high at particularly and in three months they want to drastically change that. These things don't change that drastically. You can have a marginal or incremental improvement in every small aspect but you need to be very very sure what you need to do that. Also whenever you're doing your financial management do this very strong analysis on your capabilities and expertise. Sometimes you are predicting something much higher but you lack your capabilities and expertise. If that is also not available in the system it will not work and that's why I say call the MWM, master what matters. Master what matters will mean that you need to really pinpoint and connect all the dots in your business before you even jump on to your financial plan. Third part after business planning would be to really define financing for your business because where is the fund going to come for how much you can do from internal accruals which means that you have predictability of next six months or 12 months on terms of what kind of monies would come within the business which means from internal accruals and what you would have to raise. This is very very important aspect of your entity and most of the times if you're not really designed to understand what kind of financing is required for your business you will never be able to achieve your business plan which you predict. So it's very important to really keep the eye on how you would really design financing and sometimes you're too late to define that. You're too late because if say your business needed something in the Q4 you should be working right now because you need at least two quarters to really bring that kind of financing. It can be through debt or in equity but you need at least two quarters to do that planning then only you're having or you would probably have to have a plan B if you are not able to get that kind of piece. So it's very important that you really define what kind of financing at least in the next 18 months to two years which is 24 months your business would need and where it is going to come from and don't overestimate sometimes your internal accruals. This is also another problem. A lot of time we get into a scale journey, we start growing the business and we overestimate that we will be able to do our internal accruals would support that and I've seen a lot of people especially in this COVID period a lot of good companies have collapsed because they were overestimating their own performances and because of the performances and everything was shut they were not into it. They were on a restaurant operator which I'm trying to advise and try to restructure their business model. They have about nine restaurants which are almost finished to start and but they have run out of cash. They don't have cash, they don't have abilities to finance that business so they have a risk of losing all that KPEX which has been designed put in that business going into drain and they have also built some liabilities because not pay your trenders and a lot of other issues. So it's a difficult situation to address that and so at a valuation we are taking a big haircut to do that. So how are you going to be financing your business is also very very important. It's also a combination of what I call a flexibility and control. How you bring financial flexibility, how you are able to really change few things which is required and how you can really accommodate maybe a strong investor or a financer in your business that would bring in some kind of a financial flexibility but you need to have a very strong business control. You cannot lose that control on that because especially when you're raising, when you're raising it becomes even more important that you put a very strong business controls on it. Because sometimes it's expensive, it's expensive to raise capital. Once you get that capital, if you don't keep the business control in right sense, it can be even more disastrous. Losing your own money is one thing, losing somebody else money can be even more stressful and painful when you do that. So you have to very clearly understand what is your financial strength telling you? What is your current books are telling you? How much leverage you can hold on your books? What has been the past track record for you on a performance to handle that I think this would bring another important question. If say you're going on debt and you're taking some kind of debt, then you need to really see that is financial cost your business can afford? Not on a short term but a long term basis, can your business afford that kind of cost? And this is also another problem especially for a lot of mid-sized manufacturing companies I've really seen them operating in such a thin margin and it's a very competitive world. They're competing with their competition on a very, very small margin and they take a lot of debt on that. If you really see these a lot of export-oriented organizations which were working on a very small margins, while export would technically mean that you can work on a larger arbitrage and bigger margin because there are so many players in the market and doing the same kind of job in different developing countries. So your margins have become very small and you're only doing the job work margins and then you pile up a lot of debt on the business and your cost of capital would never justify. And so it keep rising, keep rising, keep rising and you're trying to justify by your sales volumes and so on and so forth but eventually at a one-to-one time it'll give up. It'll give up and if any decline would happen, if any decline would happen. I've also seen companies sometimes keep jacking up even public listed companies, keep jacking up their shareholder value and leverage that value over debt component and as they would reduce their equity value out there, the bankers would come after you because they want more collateral to support your business and that's where it starts and down done. A lot of companies have actually gone down the drain just because of this mismatch, this mismatch of their cash flows. They were over predicting their capabilities to bring that and that didn't have. So also that brings another point, what is your financial risk? How much you're putting on the block as a risk? What is your personal finances requirement? And this is another big problem. Whenever you're doing your two things which are running in same time, one is your business, what patience is your business showing and what patience you as an individual are showing. That's also very important. What is your personal finances telling you what kind of requirements you have? And sometimes your requirements are immediate and then you start pulling up from your business and business is not ready to give that dividends to business owners. And I've also seen a lot of startups have failed because the personal finances of promoters or founders actually pushed them to sunk a lot of money out of their startups and the startups were not able to sustain. That's not part of a good financial health also. So very importantly put a very holistic business strategy for the business and then only you will be able to do that. That brings me to the fourth point, which is very important point is whenever you're doing a financial management, financial discipline is extremely, extremely important. Wherever you're raising money for, even from your internal pools it is coming from or an external sources it is coming from, wherever it is designed to go, it should go there. That's extremely important. Otherwise, if you change things, at least the external investors don't like it. And that's why I sometimes feel that keeping a very strong financial discipline is very, very important. There is a good saying, it says capital is part of your wealth, which should be directed well to so that it can create further wealth, which means that it's very important. Where are you putting the money? Where are you putting money would be very, very important and how you really design that. Sometimes you put monies into things which cannot create what I call the right kind of impact for your business. And I've run a business particularly, we were old school marketing company and we used to use a lot of print. There was a particular time in 2015, 16, I don't know how many of you have seen that, but franchising there was running this full page ads in Times of India and so on. We were on this ride of building the brand equity and so on. And later we realized that we were spending about 35% of our total turnover in actually in marketing, which means that 35% was just pure marketing. It's not even cost of acquisition of customer, it was pure marketing and then you had cost of sales and so forth. So if you really see, while we were creating a huge amount of brand equity, but that was not converting completely into sales because it was a consulting company, it's like a KPMG and ENY goes every day and puts full page ad, while you can tell people that you exist, but it did not make any sense to that. So sometimes you have to be very rational in your financial discipline that you're not going out. And this is one of the areas which I like, sometimes people who start with a business plan and they stick to business plan. They stick to business plan, sometimes it would be difficulty, but they would not change unless and until there are strong compelling reasons to change that. Then from the fifth point, which is what I call the financial control, how do you really bring a strong financial control? That's very, very important. And this is where the business owner can go wrong because business owner is very clearly linked on two things. He's always looking on the sales, how my sales is growing, numbers, which is my revenue and sales coming in the company and also his cost structures. So he was always trying to control the cost and he's doing that. These are very broad indicators. These are very easy indicators you don't have to really do that, but there is much more deeper into that and which I call budgeting. Again, there is a good saying is that budget is telling where your money is going or where money should go. Instead of wondering where it is going. So that's very important. If you don't write a good budget about your business, even every single month, you have to have an annual budget and then you have to have a very strong monthly budget. It should define very clearly your growth cycle, demand generation cycle, how your demand is generating and what is every single smallest thing which is happening in your business. And sometimes it looks very easy for an entrepreneur to be in control of his finances because he's almost looking at everything, but it's not true. You need to have a specialist. You need to have a specialist who can draw this whole thing in a very systematic way and this might change. This might change. For example, in last one year, we've been working with many companies and I felt and I've worked this strategy very well. I looked at their budgeting structure and in the conventional time, there was a cost of occupancy, which means that you are paying rentals, you have premises on lease and so on and there are other things were happening. So like I was advising one company which has both businesses, they have retail business and they have online business and when all things are going on, the retail business was not doing well and obviously retail was not predictable. So I actually told them to close a lot of stores and use that money in building their online business and shift that business model. So sometimes you need to shift your one head of appeal, which is taking a lot of load and restructure that. It might not be critical at this moment and you cannot drop your margins. So you might have to shift that in your budgeting and move it to some other head, which is more in demand at that stage. Say for example, sometimes your cost of talent has to go higher because you're now not getting talent at that level, which means that if your cost of talent is going high, where are you moving that extra percentage in the cost of talent from which part? What you can reduce? Can you reduce your marketing? Can you reduce something else? So you need to be creative in your design of structure that how you can move something from there and also when you are working on your budgeting, you need to really also accommodate a lot of deviations which can happen. Deviations can happen from delaying your payments. It can also, deviation can come that you need to maybe do a next level of innovation of your product because the competition has suddenly come up with something which you need to also do. So there's a new development cost which can certainly fit your business model. It can be also over reliance on something which you were thinking that it will always happen but didn't happen, which means that you're sometimes working only on few set of customer base and you are overly reliant on that and they certainly for other reasons are not available today. Like a lot of companies which were too dependent on four or five corporates and were advising an exit for a travel company out of Chennai which had actually about five big companies and these five companies were giving almost all the billing for their travel. Now, this company is absolutely stuck. Money's are stuck. They're not getting money. So there's a lot of outstanding which is available with them. They obviously have no business because people are not using any travel structure and they are still running their cost and the issues is even the marginal business which they have if they don't continue to service that there is a risk of losing those customers also. So they're very difficult situations one can really do. So understand all these exceptions which can come in your business, all the deviations which are coming in the business and how you really accommodate those in your budget. So that would give you a plan A and a plan B. That's both are very, very important. The sixth point is business improvement. Financial management, the biggest thing financial management does for you is help you to improve your business. Look at business from a different viewpoint. Look at from a distance and understand are you over estimating or over optimistic about your business and if that number what you're thinking is not happening what happens to your business. Second looking at overall what kind of a fit falls can come. Is a competition getting aggressive and can really put you into trouble like what happened in some of the companies. I saw the competition was very, very aggressive and they actually eroded all the margins available in that. We've seen almost in every industry. We've seen in telecom one partner one competition comes in like reliance was always very aggressive on their pricing and structure always eroded almost everybody's budgeting and balance sheet because they took the margins of A from business. So you need to really be very clear on that. You also need to really go deeper into your even you're doing a business improvement. You need to talk about business performance and efficiencies. What kind of efficiencies working on that? Another thing which is very, very important to keep eye on is inflation versus your margins. Inflation is a big problem and especially for next two years is going to be a huge, huge problem for businesses. So you need to really keep a strong eye that inflation should not be a big problem in your business. Everything is rising like in building construction material. Look at everything which is supplies coming to you. So even if you launched a project in 2020 and 2021 you've already sold the apartments at a certain price and now inflation has hit you the everything is gone to the roof. Now you have no choice to stop the project because you have to deliver on time otherwise you run penalties on that and you have to pay interest to your home buyers and places like that. But otherwise even if you finish the project on time you probably would have to end up doing on loss. So how do you really address this situation? This is a very unique situation to be in where you have now got a customer to deliver over four years and you have already committed a price and your inflation has hit. Do your contracts have that ability to revise that pricing? I mean not in some cases you cannot but in some cases people would keep that capability in the contract. They would clearly define that they can go out and not lose their margins just because their cost of input has gone up. That's very important aspect. So keep checking your PL, keep checking your PL, keep your margins intact rather continue to make an effort to improve your margins and prepare for a not so great time also if you have good margins in the running in the business even if you have a bad six months you will be able to sustain and this is where the large companies if you really see because they work on a large margins like RIL or even organizations like Tata and so on so forth they always are capitalized. They always are capitalized because they've always kept the margins in right and whenever the adversity happens they rather take an opportunity time to go out and use that cash reserves to pick up your assets and your business and now you'll see in this year as the business will go to normalcy you will see all these companies which are sitting on a lot of cash would use this as a great M&A opportunity to acquire a lot of business. So last point which is the seventh point keep looking at your key indicators. Your month should start looking at these five indicators. First growth what is happening on your growth month on month it's not just about your sales or profits but it is also about average consumer spend has it grown as a decline so a lot of smaller indicators smaller indicators within the growth path of your business that has to be looked at so first very honestly look at your growth. Second assess your profitability not with you what you are happy is your profitability comparative to all other companies which available in the same space or a comparative space so how you're doing versus the industry that's very important sometimes we look at a profitability we are happy of that profitability but you are not doing as good as the industry is doing others are doing much better than you are so you need to really assess your profitability on that perspective that's also very very important. Third is your what is your liquidity what is your liquidity telling you how can you last how much gas is with you for a short term and a long term and this is a time I would say this is a window to really put nine months not go back rush to growth but bring your liquidity back fill the tank back that's very important because in the last 14 months almost everybody has come down to the lowest level of the attack right if they were businesses were active and and not getting the same kind of cash flows they would obviously use some kind of liquidity in the structure or they have put liquidity in pressure so I would say that nine months next nine months is to bring back your liquidity in the space before you start to run for a big scale up story. Next is how much leverage is available in your books what can you leverage on that I don't over leverage yourself never do that it's a mistake especially in India cost of cost of capital is so high that I don't advise at all and I've seen so much of great companies and so unfortunate when I read about them in news and media and so forth and I knew those companies very closely and because of my consulting business they were good entrepreneurs good businesses but because of their leverage they were not even to really do that and the entrepreneurs became over ambitious that they were thought that they will be able to pass and sail through this for cycles and created some super ambitious plans to really deliver that and that doesn't work and that doesn't work even not only for businesses but it doesn't work for nations you know some of the nations can go wrong in their in their approach on business and I think finally the fifth point which is the fifth indicator is your asset maximization which means are you sweating out all your assets and if you're not sweating out either reduce those asset burn right which means that if you say I have 10 offices you have and you're not running to full of capacity you don't need that and I think cut down offices cut your fixed cost down right so if you don't need that thing like cafe coffee they started doing it right but they were not able to fully do it before they started cutting down their stores now they're starting down large stores they're from 2000 plus stores they've all come down to about 800 stores I think they would go down further another 200 250 stores but this before that they had a strategy to really optimize their places so they were bringing other retailers inside their stores so they were able to maximize sometimes 2000 square feet but I don't need 2000 even if thousand I had I can still do that so how can I cut down I can negotiate with my landlords bring my space down so you need to really see how you're doing your asset maximization is very very important so five indicators see your growth monthly see your profitability not from your perspective but from a comparative viewpoint see your liquidity position how much leverage you're available in your books and finally how your assets are maximized so this was a short session this was a 30 minute session I've already done about six minutes over finally if you have quickly some questions for me I will be more than happy to take that absolutely thank you so much Gaurav sir for another wonderful and a very insightful session for all our attendees I'll just quickly jump on to the Q&A round the first question that we have is should financial management be the responsibility of the finance team or the CFO only or is it something to be owned by everyone in the company which approach culture do you suggest? Everybody in the company obviously some data would always be confidential it can never go down with everybody that's why I say restricted transparency so you need to have transparency but there has to be some restrictions which is important otherwise you lose a lot of data which becomes public but unless suddenly you have participation from everybody to really understand that they are they're responsible for the larger piece to it and try to bring that kind of wisdom with everybody then you see there would be a better financial management. Right the next question we have is is it a good practice to hire an outside firm to manage our finances or should the in-house finance team be preferred? Depends you know if you are able to afford a full talent in house then it's fine but if you don't need that full house full-time talent which is a senior CFO then maybe you need 8 hours or 10 hours of that financial piece then maybe outsourced and I would say for younger companies outsourced don't have somebody sitting in your on cost sometimes it is need because if you raised money then your investors would like to see a CFO within the organization to put some kind of financial discipline. Right the next question we have is do you help in creating financial projections as well in order to be prepared to reach out to investors? Yeah that we do that absolutely we are a specialist in business x to really build your information memorandum to define your projection and then represent you to raise a future capital. The next question we have is my turnover is very good but not able to achieve a satisfactory gross profit my business is only about one year old is that fine to have such a condition in the start? So you know this happens with almost every early stage businesses your business starts moving up but your margins are not intact because you don't have economy scale and your cost of acquisition is very high like a lot of these D2C companies direct to consumer companies they get very quickly on top sales which means that they would get into 15, 20, 30 crores of revenue because they're digital first they put in Amazon or other places they get caught of sales but they don't know manufacturers they're actually buying from somebody the cost of manufacturing and the margins the manufacturers would keep it takes away everything from them and then they are running discounts here and they are pushing the platforms up so there is no way you would make money right because you're not an integrated operator you're just a trader with some kind of a brand. It's not a bad situation to be in because I know a lot of clever direct to consumer businesses have done that they've actually gone to the same factory buying from the same factory tens of them and selling at the same platform but they have just different labels which everybody has. So that's a given but do a little bit of science understand once you start acquiring your customer base how do you really reduce your cost of acquisition which means ability bring that customer base and everything and then eventually also push backward when your volumes are growing that your manufacturing cost is also lower down and you're able to put yourself between three or four different suppliers so suppliers also start giving you better margin and better structure but that's why financial management is very important. If you are able to put incremental change monthly both in your input cost and your sales so if you say I've done a little bit more on my sales function my cost of acquisition is dropped and my input cost is altering so the arbitrage you're doing is in Delta up so you're doing both sides are Delta up and that's where and that's what investors like that's what they like that you are in the right track. Absolutely sir the last question I would like to take up is how to enforce effective and timely recovery of payments from clients we've had a company delay payments for six months severely affecting cash flows. Yeah everybody is doing that so you need to both do soft collection hard collection legal and I think we've also suffered at being a service provider we had about 3 million outstanding before this COVID hit and 1 million has already gone into bad debt which means the clients have shut businesses or they're not I think it was too small businesses in that sense so we have about 2 million I think so it's a tough call but we are doing all we're doing soft we're doing hard we're doing collection agencies we're doing everything but it is difficult I know it's difficult and it also puts pressure on sometimes your vendors because you're not receiving enough and so you don't pay that much so it's cycle break and that's something which is going on in economy now it's going on in economy the you know everybody is pushing each other so I think it all streamline in the next six months six months would be a painful journey and I'll be honest on that so thank you very much thanks for coming and really appreciate you taking time out and hope I was able to give you some insight while this is designed for a smaller and medium enterprises because we continue to give them knowledge this is our community which we need to continue to service and and give our experiences hope you liked it if you anything which I can really add on which you need more help and if you want to really get some notes from me please reach out to me I'll put my email id it's gm at gauramaria.com so thank you very much and and if you are looking to raise money or you're looking to invest or looking to exit please reach out to Sonali and we will be more than happy to do that we have great assets also if you want to look at running businesses to buy that also we have available and and if you are somebody who wants to have a strong growth story and you want to really take some advice we have all available to help you out thank you very much thanks Sonali for hosting this. Thank you so much Gaurav sir for a wonderful session as always and thank you to all our attendees we really hope you were able to add some value to your lives through this session we'll see you next Saturday at 11 a.m with another episode in this series of BX Academy business excellence mentoring and coaching until then if you have any questions any queries anything you would like to know more about our services or if you would like a recording of today's session or any of our previous sessions please reach out to me and I'll be very happy to help you thank you so much