Business Acumen Part 2 : Going Bananas

Sometime in 1983 my older brother Beski had started banana business. He bought about 10 bunch of raw bananas (the whole stem), he would ripen them at our garden, and then would supply it to the grocery stores and tea stalls nearby. As his business increased, he built a small room where he could keep about 100 - 120 bunches of bananas (each weighing between 5 kilos to 20 kilos). This room was specially designed. It had no window. Just a tiny door of about 24 inches wide and 36 inches tall. It also had a small hole on top and came down like a tube; one cannot see the hole. The tube structure reached the ground level and was exposed down below. 

He would buy the raw bananas from Athoor market where the auction took place around 2.00 a.m (you read it right), and then he would bring them by a rented bullock cart or occasionally a tractor, while he returned by his bicycle. The bananas reached by early morning. I would join him to put all these to be stacked inside the room.  Once all the bunches were stacked, we would seal the room with the small door, and put little mud all around so that no air can escape in or out. Then the fun started. We would burn few dry banana leaves that came with the bananas at the exposed portion of the tube. It was important not to set too much of fire, but there should be lot of smoke. The smoke would go up through the tube into the room. We had to do it just for about 2 minutes, nothing more. This was good enough. The smoke would remain inside, and keep the bananas warm.

Next morning, when we opened the door, the bananas were ripe. My brother would personally reach all the bananas to shops in our village, neighboring villages and the nearby town. However, as demand increased, and that he could not reach so much to some shops, he would ask me to drop a few of those bunches (it was always carried in whole bunches along with the stem, not just the hands) to known shops. He gave me a rupee per bunch. I saw that there is a business opportunity here.

Sometimes, the smaller bunches with less than or around 50 bananas or smaller sized ones were not much in demand. We would be sitting around a whole bunch of bananas and finishing them all. But, still there was more as he had to take the whole lot in auctions. He can't be choosy there. Often the smaller bunches came at an average cost of 50 paise to one rupee (100 paise = 1 Indian rupee). On Sundays and on holidays, I would make a deal with him. The deal went like this.

Say, he had 10 bunches, and the total purchase cost was 8 rupees. I would agree with him for a sale of the same at 15 rupees with 20% commission, and anything above that would be mine! I would take all these bunches on our tri-cycle that we had, and would place myself around 8.45 / 9.00 am outside the fish market in the village. It is the time when maximum number of villagers came to the market to buy the fresh catch of fish. I would start yelling standing on the street near the tri-cycle, calling them out to buy the bananas. The best one would go at 5 rupees, and the not so good ones would go at 2 rupees. I would end up making about 30 - 40 rupees in about 30 - 40 minutes.

Once I am back, I would take out exactly 12 rupees that I would give to my brother. Account was cleared: 20% of the agreed sum of 15 rupees was 12. So, he got 12 (4 rupees in profit), and I got anywhere between 17 - 25 rupees. When he comes to know from the villagers or often from me that the people got good bananas at just 5 rupees, he would be in shock! He would come back and ask me what was my total sale was, and ask for the 20% of the whole sale. But, I would insist that, what was agreed was agreed! And my parents too supported. He was fun! We loved each other so much, and he would always ask me to take more bananas to the market!

After my father's death, this business model helped me a lot to save money for my education. I remember him fondly today. 

Post-script: Unfortunately, his business did not last long.  It was sometime in late 1986, he was robbed of about 3000 rupees that he had taken for the auction to buy more bananas. The business came to a grinding halt within few months, as he could not catch up with the business loss.

Business Acumen Part 1: Little Kid Adventures

How do we learn business? Some do it in business schools, some learn it from parents, some do it by being in business, and some learn it by sheer grit. I had seen money lenders visiting my family, taking away some hard earned money as part payment against the money that my father had borrowed. Often it was very tough for them to pay back the money. I had seen bank notices at home coming on printed inland letters mentioning of pending dues or a probable sale notice. My father would borrow more money from someone, take it to the bank, pay off the interest, and procure fresh loan. I vividly remember instances when our family lost ornaments as the bank monetized them. 

Money was a rare commodity. My older brother's grocery store in the village was a small one, and often it did run at loss as family took things from the store, and we expected that the income was so big that it could replenish the capital. But that wasn't so. However, hardly I was six years old I began to spend a lot of time at the shop. In weekends, and at times during lunch break at the school I would be hanging around there. It helped me to learn quickly on: measurements (both weights and liquids as oil was sold in milliliters, and other things in grams and kilos), and calculation of money that had to be done quickly, and often in mind. Learning mental calculations is critical to learning mind.

The games that we played as kids also meant a lot of calculations that had to be done. The well known goli-danda (marble and stick) or, just playing marbles at its various versions, and playing ball with a small bat where you were alone against several opponents required enormous calculations. I learned it early that there was an opportunity to make money - both in games and at home. 

I bought three marbles for 10 paise (one tenth of a rupee), and I would play well. If I played well, I could win marbles from others. So, initially I took my opponents strategically, and once I gained expertise in the game, I knew I could win anyone in our street. Now, what did I do with the marbles that I won. The logic was simple: the shop sold single marble at 5 paise, and three marbles for 10. I sold it to the boys from whom I won and other children of my age at a cheaper rate. I gave 2 for 5 paise and 4 for ten. It was a good bargain for them. So, they bought the marbles that I won from them, then they bought it from me by giving me money, and they lost it again to me in games! Kind of addiction that had built into them had kept my business going. I was just 7 or 8 years old then. At times I had more than 10 rupees which helped me buy some books or stationary for which I didn't have to depend on my parents. And I could always depend on my collection of marbles that were anywhere between 50 - 100.

One day, my mother asked me for two rupees to buy fish as she didn't have money. I gave her the money on the condition that she should return it with some interest. She returned it the next day with 50 paise added (100 paise = 1 Indian rupee). I thought this as a good idea. My mother, and even the neighborhood women, most of them relatives, needed money to fend of some emergency. Often it was between 50 paise to 2 rupees - may be to buy fish or to do some grocery. I had a simple logic in my interest rate:

Per day interest rate:

up to 25 paise : 5 paise per day

26 - 50 paise : 10 paise

51 - 75 paise : 15 paise

76 - 99 paise : 20 paise

1 rupee : 25 paise.

So, if you took 1 rupee for three days, you would end up paying me:

On day 1 : 1.25

On day 2 : 1.25 + 30 (interest of 25 paise added on top of the 1 rupees interest) = 1.55

On day 3 : 1.55 + 40 (interest of 1.55) = 1.95

In other words, I had my money doubled in three days. My mother would say, "I can borrow from any money lender, but not from my son!" And then, she would laughingly and gladly would borrow from me. Even others helped me my borrowing from me. The reason? They all knew that I used the money to take care of my little expenses, and at times I helped few very poor kids.

(The second part : "Business Acumen Part 2 - Going Bananas" will be published on 18 April 2020)