I liked the story narrated here by Ashwin.
I am running a web design and development company in Surat, Gujarat since 5 years. we have a team of 10. We are mostly working with overseas clients.
I don’t come from a business family as my father was a clerk in bank and my grandfather was a farmer. My father wanted me to keep doing a job, but I had a dream to start my own business. So, I left Yahoo! in 2008 to pursue my dream. I have been learning business tactics since then.
Let me come to the point.
4 years back, we had started working with Indian companies and my experience turned out to be very bad.
Company A
A Mumbai based company (a known property portal) outsourced it’s development work to us from 2009 to 2012.
For 1st year, we got regular payment every month. After that, a delay in payment had been started. Sometime I had to follow-up 2 or 3 times to recover monthly payment. So it was a delay of payment cycle every month.
Then they adopted another strategy. They started paying partial, whenever we pushed them to pay. We kept working for them on their new tasks, in hope to get timely payment. But the pending amount got increased as time passed.
So, at one point of time; I decided to stop working further with “Company A”. Now at our side, clear disagreement started between me and my old partner (he is no longer associated with our company and he was handling project management and technical side, when he was part of our team). My old partner has friendly rapport with “Company A”s directors. So, even if he was well aware of delay of payments from them and their false commitments, he worked for them whenever they had any urgent issues. Moreover one time, he got invited to attend “Company A”’s annual party and he attended it. Seems he did not have any concern about company’s payment issue.
All such things stopped me to take any hard actions against “Company A”. Additionally, my old partner was my college time friend and I was also not sure what to do in this condition. I tried to talk to my old partner as a company point of view but he did not understand and continued fixing their work without acknowledging me. And even though I knew he worked for them, I could not have hard words with them as it would have certainly ruined my relationship with him. 10 years of friendship.
One day my partner wanted to leave the company and I didn’t stop him. He didn’t think it’s important to discuss about pending payments from the client.
Learning Lesson
“If your partner does not show concern about issues company is facing, No matter how good he is in another areas, he is just another highest paid employee of your organization.
Finance is the only thing which tells if your business is doing well or not. Even if you have a great and skilled team, but if it does not help in bringing revenue to business, they will become overheads after sometime.
Choose your business partners wisely. A good friend is not a guaranty to become a good business partner. Partners must share mutual vision. When you realize, vision and goal are no longer same, just split up as fast as you can.”
“Company A” gave many reasons for delay in payment e.g.
(1) “Our accountant has left and we are not able to hire new accountant yet, please wait for a month.”
(2) “We are moving into new office and still struggling to manage payment, please give us more time.”
(3) “Our company got split up, we are in bad shape. So please bear with us.”
(4) “We are getting new investors on board soon, so all payments will get clear soon etc.”
In the last 1 and half years, I wrote many emails but what I got was “false promises” every time. One time, they accidentally transferred more money than what they promised in process of clearing pending payments. And they requested us to pay back as it was scheduled to pay another vendor and they promised to pay next month. Which I did but, that next month never came.
After sometime, they stopped replying emails and phone calls. I don’t remember the number, but I have written more than 30 emails to them so far.
One day, I got call from MD of “Company A” after long time (in Feb 2013). I got surprised. He started telling, “Nilesh, money is not going anywhere. We are not people who eat others money.” and told many other nonsense things.
Then he came to the point. My old partner was handling their project and “Company A” wanted some work to be done. My old partner had started working on his own and “Company A” wanted to go with him (obviously). They both didn’t want to look bad, so they asked casual permission from me, if I had any objection. I replied “it’s your choice. My old partner is no longer part of our team and you are just one client for us and we don’t have any agreement in place that you can’t work with others. I care most about commitment, ethics and values and nothing more from you.”
He promised again to clear payment by end of March 2013 and it was another false promise.
Just 2 weeks back, I pinged him on messenger and he immediately got offline 😀 and as usual no reply of email/phone from anyone from “Company A” anymore.
The MD was in my FB friend list and all I saw on his timeline was “got new Audi”, “got new luxurious flat”, “Having nice weekend in Goa” etc … I just removed him and his team mates from my FB friend list. A person has time to update FB status, but has no time to reply email/phone 😛
Worth to mention, he got “Young Entrepreneur” award in past 😉
The money stuck with the company is around 2.5 lacs. Now, frankly I don’t want to spend my money and time on lawyers, just because I want to keep my mind focused on other good things which helps my organization to grow.
But I am very disappointed with so called two-faced people. We worked for 3 or 4 months, without being paid or paid partially in hope, we will get paid one day; And I had to put some of my personal savings to make employees salary on time.
Company B
Another company we started working on is Bangalore based firm. They appeared in The Economic Times, Plugged.in, Business Today etc.
This is how they work. They give you requirements, which is never 100% clear and they asked you to work in fixed budget. Once you agree, they add more requirements in later stage and they want you to work on it without considering extra time and money. We used to work on 2 or 3 projects with them.
Once work got completed, they promised to pay as soon as they received project sign-off from their end client. We got some payments after my repeated inquiries. To recover rest of the payment, I sent them many emails. Their CEO and other management persons promised to look into the matter saying, it got missed and it will be getting clear as soon as possible.
That time never came. Here also, we received false promises many times. It’s not that big amount which is stuck, but the time we spent to help them to run their business is valuable to us.
I’ve email communication as a proof of their repeated false promises for both organizations.
I don’t understand one part here:
Why people can’t be transparent in communication and say, “Hey Nilesh, we are fcuked up. We can’t pay you. Just consider it as charity work you did for us and forget the payment”.
And I might have granted their wish with peace 🙂
Its a learning lesson for me, what not to do when dealing with a bigger company, who has self claimed right to ignore small companies, when it comes to Money 🙂
I have intentionally not named the companies in this post as I’m not sure if it’s right thing to do in public. Also my objective here is not to complain but to seek advice from more experienced rodinhooders as to how to handle such situations in the future.
@Alok and others, I really need advice on this. And thanks for reading this lengthy post.
Thank You
Nilesh Gamit, nilesh@lamp-technologies.com