Especially for SME – 3: Resources-Money.

01 September 2021

One SME:

But the formula, Result = Resource x time spent on the resource is not entirely true with one resource- Money. That is because Lowe says money is no doubt a resource in as much as you need it to procure all other 6 M’s, but we should not forget that the end-result of application of any or some of these 6 M’s is also money! Money is the result, the reward and the end point of how effectively we have applied all other 6 M’s; money is only partially the cause of any result but it is more the end-result itself! The more time you spend on money the less time you have for other M’s for their effective application and so the end- result suffers and with it the money too!

But almost all of us- specifically SME’s owner CEOs think money is the sole cause of the result they are producing or more specifically the result they are not producing! He elaborated this:

Mr Lowe to an SME chief: “why was the promised delivery to a customer got delayed?”

SME owner CEO: “Oh! I did not have the material required at the right time.”

Another SME owner says: “No, no, we have software for materials management, so even though still material shortage happens often, we have some other problem. Even though we have the material, the work Centre required was down under maintenance.”

The third one says: “I had everything but the worker required to do that job was on leave. What can I do? This is the irresponsible kind of work force that SME’s can afford unlike big organizations who can have multiple workers with tremendous skill to do the same job”

Mr Lowe: “So what do you mean is, it is the inadequate finance that is the root-cause of all problems for SME’s.” “Yes Mr Lowe” was the unanimous answer from each one of them.

And each one added one solution: “The central Govt. should consider and help out SME’s with more liberal loans from public sector banks – with not so much guarantees required”.

Mr Lowe: Assume you had infinite availability of finance, will it solve the problem?

SME owners: “Yes of course, we won’t say we need infinite money but the money we demand should be made available to us by the Govt. and banks, instantly.”

Mr Lowe: “So, for you there are no 7 M’s of management but only one M namely Money”

SME owners: “You said it”

Mr Lowe: “But I just told you that money is the result of application all the other 6 M’s and not just the cause.”

SME owners: “Sometimes you become the owl though most of the times you are the opposite. Be practical and not theoretical! What can you do today without money?”

Mr Lowe: “Suppose by some magic you have all the money you demand. Would you be able to run your unit profitably?

After all the money comes from banks and you have to pay interest.”

SME owners: “Yes that is another problem, we have to return the money and also the interest; we have to pay the penal interest also for delayed EMI payments, which also happen because of inadequate money.”

Mr Lowe: “My first question to you is; if you get so much money why should you work at all and run an SME unit with so many daily problems?”

One SME owner: “That is a good question!”

Mr Lowe: “There is another problem: In case you get so much loan from the banks and try to repay EMI’s on time, are you not working more for the banks than for yourself?”

All SME owners: “Yes, that is Mr Lowe, we know! So what is the solution?” ………..to be contd.