UN World Happiness Report 2019 has ranked India at a poor 140th position among 156 counties in spite of the rich spiritual and cultural heritage we boast of. This is a clear indication of the deterioration in the quality of the mindset of Indians and our lack of right relationship with other human beings and nature. Our neighboring country Pakistan was ranked much above us at 67thposition and Bangladesh and Ceylon were ranked at 125th and 130th positions respectively. Finland, Denmark, Norway and Iceland took the first four places.
I personally feel that we can improve our position by a collective effort. The intention of this article is to emphasize the role; the business community has to play in improving our level of happiness. Moreover I firmly believe that peace of mind, joy and happiness are the most important things in life and it is foolishness to sacrifice these basic aspects oflife in the pursuit of money and accumulation of wealth. Being a practicing Chartered Accountant Iam fully aware of the hardship and mental agony the business community undergoes in pursing their career. An unfriendly bureaucracy, high pitched assessments, complex tax laws with so many restrictions, do’s and don’ts,unbearable interest rates, penal provisions and prosecution for belated payment and so called evasion of taxes make the lives of even ordinary businessman miserable and tension ridden.
It is again a matter of great concern for the business community in Kerala that our state ranks a poor 21st place in ease of doing business, whereas the other Southern states of Andhra Pradesh and Telungana stands at 1st and 2nd position respectively.Our immediate neighbors, Karnataka and Tamil Nadu ranks at 8th and 15th position respectively in ease of doing business.
Politicians blame each other endlessly for all the problems facing the business community and take no responsibly or steps for mitigating their sufferings. Instead of understanding their problems and setting things right the law makers are making their lives miserable with more stringent compliance provisions in the statutes. They often forget the fact that it is the business community who contributes maximum to the exchequer by way of direct and Indirect taxes. I was just wondering how the business community should boldly face these challenges and carry on their business with peace of mind. I therefore put forward the following suggestions for doing business with joy and happiness:
- Operation and AccountingManual.
A well drafted Operation and Accounting Manual would definitely help to have proper systems, procedures, policies and practices in place for your business.This would also ensure consistency in doing business, less harassment from law enforcers and easy handing over charge to the newly recruited staff.
- Finance and Accounts
Have a good accounting system in place and insist on preparation of monthly financial statements regularly and subject it to thorough scrutiny. A prudent businessman would always insist on budget, actual and analysis of variances between the budget and the actual month after month.
- Over Trading and Diversion of Funds
These are the two major reasons for many businessmen going broke and end up in insolvency. Focus more on your existing business and avoid the temptation to divert money from existing business how much lucrative the new investment proposal may appear to be. Similarly don’t try to expand your business beyond your means. Such expansion shall be carried out only after having a well studied long range plan, plan of action and arranging separate funds without starving the current activity for funds.
- Tax Planning
Tax is a major cost factor, the incidence of which can be substantially reduced by proper tax planning. Whether it is Direct/Indirect Tax, you need good professional advice to reduce its impact. The money you pay to the government by way of Direct/Indirect Tax is much more than what you normally gain from business. However tax compliant you are, it is really difficult to satisfy the tax authorities. Filing of periodical tax returns is as important as payment of tax. It is therefore advisable to have a knowledgeable person as Tax Consultant not only to defend your case before the tax authorities, but also for proper tax compliance.
- New Incentives,Concessions and Relaxed Rules
Be thorough with the latest concessions, incentives and relaxation of rules and take full advantages out of it if your business fits into it. These incentives and concessions are short lived and are introduced to comply with certain election promises,promotion of certain sectors, enhancement of job opportunities etc. Many newly introduced tax saving schemes, incentives and relaxation of rules gounnoticed by the business community. Always have a good Financial Consultant at hand, respect their knowledge and remunerate them reasonably well.
- Timely Winding- up of Business
At times it becomes necessary to wind up your business as a whole or in part depending upon the situation then prevailing. Any delay in making a decision on this can create havoc. Timely winding up or disposal of the business as a going concern wholly or in part which are un-remunerative is a must to tide over crisis and to remain afloat.
- Reinvestment in Business.
A definite portion of the profit should be reinvested in business year after year for improving the work environment, adoption of new technology, staff training, research and development, market study, building new teams etc. Improving the existing business is more advisable than going for new ventures. Of course there are no hard and fast rules on these issues.
- Borrowing beyond means
I fully agree that borrowings are a must for creation of assets. Here also financial discipline is a must. It is the responsibility of each businessman to decide on how much one can borrow maximum. When money is borrowed from bank, ensure that apart from your business income, you have one more source of repayment. Interest cost is the only cost on which you have no control. The only way is to limit your borrowings and repay loan by disposing of some other assets much before it becomes non-performing assets.
One of the most difficult things to manage in life is money and one of the major causes for suicide is indebtedness. Be watchful when your borrowings cross certain limits. Instead of avoiding the situation, face it boldly and take steps to liquidate the borrowings.
- Investing on Luxuries out of Borrowed Funds
Though I am personally not against upgrading your living standards, I am totally against going for unaffordable luxuries just for the sake of image building. You can definitely think of upgrading your living style so long as you can easily afford it and your cash flow permits it. But funding such luxuries out of borrowed funds is a bad idea, though your financial consultants may lure you into it by highlighting the benefits of depreciation, maintenance cost and interest which will reduce your tax liability.
- Doing Business abiding by Law
To the extent possible, be law abiding and avoid illegal business and those which are harmful to humanity. Whatever business one does, ensure that you leave behind a good legacy for the coming generations. It is therefore advisable to be cautious in doing law abiding business only instead of getting caught in the net of tax authorities and enforcers for violation of statutes. The only way to escape from this harassment is to be as law abiding as possible. Here also my advice is to have updated professional opinion on legal and tax matters. One wrong decision and one wrong step can have disastrous consequences.
- Staff Relationship
In many organizations salary is the highest cost component and therefore right relationship with the staff is an important aspect for the successful conduct of any business. It is always good to have regular staff meetings and interactions with them at least once in a month. Taking them for an outing once in a year will create a feeling of belongingness to the organization . Understanding their problems and taking steps to solve them and having good welfare measures will definitely improve their loyalty and productivity Through manpower audit it is possible to know who contributes more to the business, who needs training, who needs to be promoted, their level of happiness and measure to be taken to improve the productivity etc.
- Charity and Friendships
Make it a habit to set apart a portion of savings from income exclusively for charity and building up good friendships.It could be anywhere between 5-10% of your income. I hold on to the view that charity is the most rewarding and at the same time the safest form of investment one can have. It is a well-known fact that we human beings are caught up in a stream of selfishness which makes our life unhappy and miserable. Setting apart a portion of one’s income for charity and friends, help you to step out of this stream of selfishness and enjoy unexplainable joy in life.
- Good Habits and Hobbies
Success in life depends upon a bundle of good habits and hobbies. We always spend lot of our time thinking about unwanted and unproductive things. Watch your thoughts and be time conscious. Cultivate good habits and hobbies like yoga, regular exercise, meditation, observing the mysteries of nature, spending time with your family, improving your language, presentation skills, oratory, reading spiritual and philosophical books, etc.
- Attachment to the things of the Earth
There is no harm in being rich and it is indeed good to be rich so long as you learn the art of spending money wisely and for the good of everybody. The problem arises when one gets attached to the things of the Earth.We need to quite often remember the fact that our friend, death is always by our side and ready to take us with him at any moment.Our existence on this earth is momentary and transient. It is good to remember that we come from nothingness and to nothingness we return.
Every man is blessed with two infinite resources, namely Time and Brain.Brain is the depository of memory and seat of consciousness. Time has no beginning and no end and brain is the creation of time and it is also evolving with time. Each one of us is capable of being a part of this evolutionary process and improving the living condition of man. All those who have left a mark in the history of human evolution have judicially and extensively used these two free resources to excel in their own field of specialization. A judicious use of these two resources can make every businessman highly successful and at the same time carry on their business with joy and happiness.
This article is the result of my own understanding of the movement of human mind and my experience as a practicing Chartered Accountant for the past 40 years.
Author : CA. Jose Zachariah