A Shipping Magnate on the Mentoring Deck

Twenty-seven years ago, just like any other Malayali Ajai Joseph flew to Dubai to try his luck on any job that will come his way. He got a secure, comfortable job at Ministry of Health as an X-Ray technician with 5000 dirhams per month with lot of allowances. But he chose to work for a logistics firm for three years at a much lower salary much against the wishes of his uncle and aunt working in the Health Ministry.

There after he became partner in an Arab sponsored firm having a Briton and a Malayali as co-partners that was focussed on air cargo business with just three people. Ajai set up the shipping logistics division which became profitable. Once huge revenues started coming that’s when the Arab sponsor took over the company unexpectedly.

Undeterred Ajai teamed up with the Malayali promoter to start a new logistics firm. In 10 years, the company had grown and had 500 employees worldwide, with operations in India, Dubai, Qatar, Canada, Bahrain Pakistan, Kuwait but he subsequently fell out with the partner after differences cropped up about handling of finances, debt, inducting new investors and other issues.

Following the split with his partner in 2004, Ajai got the Indian operations which had to be totally revamped and subsequently set up a new company in Dubai on his own which he sold three years later to a Kuwaiti multinational firm for a huge sum.

Looking back, Ajai Joseph, Chairman and CEO of Consolidated Shipping Line (P) Ltd in Kochi is happy as logistics industry is recession proof as there is demand for movement of goods even in times of war and natural calamities. He finds time to do corporate mentoring and entrepreneurship development activities too.

He shared his views on investing and entrepreneurship:

#When should someone think of becoming an entrepreneur?

Preferably when you are a bachelor. You may have to forego your job and if the business doesn’t succeed you can always try for another job. Whereas, if you are married and children are studying, a loss in business can be devastating. When I was working, I used to team up with a friend working in an ice cream company in the spare time to sell readymade garments. After sometime, we stopped because it was quite tiring and went into full time business. But my friend continues to work for the same Ice-cream company 27 years later and every time I see him he regrets his decision. I had told him long back, if you can’t take a risk at a young age, you can’t do it possibly 25 years later.

#Is entrepreneurship for everyone?

Definitely not. Your success as an entrepreneur depends on risk taking. It accounts for 50% of your success. However, if you are a natural risk taker, you should be cautious. The first step is to have a proper project report. When you have a business idea, you tend to think positively and avoid the negative thoughts. If you spend Rs 1 crore in the first year and your revenues are only 50% of it and in the second year you have the same costs and your revenue is Rs 75 lakh, do you have the financial strength to bear this shortfall? Be conservative about revenues because you never know whether it will come, but cost projections will be achieved 100% or even more.

#What all safeguards a prospective entrepreneur should take?

In the beginning, it is natural to save costs wherever possible but there are certain compromises that you shouldn’t make. For eg. You need a good accountant to not only to manage costs but also revenues when it starts coming. Most people get the best marketing people but hire an average accountant. It can prove to be a disaster. If possible have all the key departments in place from day one- Marketing, Finance, IT, HR and legal so all systems are processes are ready when the business starts to grow.

#Is it advisable to do partnership business?

I would say it is not advisable to do partnership business. If ever you do, have three partners instead of two. If differences of opinion crop up between two partners, the third can person can mediate. Set out all the terms and conditions for partnership foreseeing all possibilities. It should cover operation of bank accounts, debt management, what value each will bring to the company, cheque authorisations, appointments and so on.

#How do you train yourself to overcome setbacks in business?

If you are involved 100% in the business, no setbacks can stall your growth. I used to go to the customs office for import-export licenses, open LoC (letter of credits), stand in queue for shipping clearances, go to ports to oversee loading of cargo into ships and so on. When you are aware of all the procedures in your business, no one in your company or outside can mislead you. It also helps when you suffer setbacks and has to start all over again.

# Is it wise to diversify once you succeed in a business?

I would advise to diversify with caution. You shouldn’t get into a business which isn’t your core competency and end up making losses on your flagship business too.

#Is it easier to work or do business?

People think it is nice to be your own boss. But it is not. When you are an employee, you get your salary whether the company is profitable or not, you have leave privileges or try another job. You can go for vacations or holidays. In business, you have to think of salary payments, sales, regulatory issues, payments to suppliers and so on.  The moment you think of a vacation, some important client may visit you at short notice and all your plans go awry.

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