Vijay Mallya – the person in news these days for his humongous loans and destroyed business, is one person who has given a long list of things that a businessman or an entrepreneur should never do to his or her business.
The self-proclaimed King of Good Times is having a really bad time just because of his wrong decisions and actions that had a considerably bad impact, both socially and economically, on his business. Once the owner of a villa of value over one billion is currently under a debt which may exceed two billion dollars.
Vijay Mallya, known to be India’s most flamboyant businessman, how did he end up there? The transition seems very unrealistic to us owing to the popular image of Mallya that we, as audience are used to. All that we have seen and heard of Vijay Mallya are his liquor brand including the huge profit he earned from it, his IPL team, and his superbly glamorous airlines apart from his glam life around socialites and celebrities. And of course, who can miss the calendar girls!
The current situation is such that we only get news of the debt he is in and highly unsatisfied former employees of Kingfisher. The reason? His wrong decisions to make his presence more glamorous and pronounced in the industry even when there was no sign of recovering, forget profit from the investments he was making.
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The rise and fall of Vijay Mallya has left some important lessons for entrepreneurs and businessmen. Some of them are:
Don’t get into a business just for glamour
This was the probably the only reason why Vijay Mallya stepped into the aviation industry that marked the beginning of the Kingfisher Airlines. At a time, when the economic condition of the nation was very unstable and particularly the aviation industry didn’t seem to promise any return to his investments he marked the birth of the Kingfisher Airlines which almost never gave him any competitive advantage. Seriously? Investing millions just for glamour?
Plan investment in a better manner
One of the major reasons why Kingfisher failed was the lack of proper usage of funds. When the nation’s economy is going down and the fuel prices were going high, profit for the aviation industry only meant cutting down investment costs. Instead, Vijay Mallya chose to increase them by providing high class services like providing earphones and serving delicacies of every type to the passengers of business class. All these just made his profit line go down to the negative.
It’s pack-up time when you see no returns
When your business or start-up is no more capable of making profit and there are no hopes of recovery, it’s for the good to wrap up your business. Even when the Airlines failed to pull in profit, our King continued the services and run the business even though it incurred huge loses just for his brand name.
Do not bet what you have today for something gone
Vijay Mallya made a big mistake by stepping into an industry like the aviation industry with low profit margins. The bigger mistake that he committed was risking his liquor business and personal assets to save the Titanic named Kingfisher Airlines that had already hit the iceberg.
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Think of employees first and then you
When you have money the first thing that you should do is clear all dues of your staff. They are the family of your other home called company. Acknowledge their services by this executing this small responsibility as it may mean really big to them. On the contrary, what Vijay Mallya did just made his former employees campaign against him. When the Airlines became dysfunctional, no dues were cleared forget provident funds that an employee should get. There was a lot of speculation about him that the foreign station employees were being paid on time but the ones in India were left to his mercy. All that he ever said was,”I don’t have money to pay your salaries.” And boom, what happens when Diageo acquired 27% stake in United Spirits Ltd.? Mallya chose to spend it on himself instead of paying his employees.
He spent Rs 9.5 crore to get Australian all-rounder Shane Watson to play for his Royal Challengers Bangalore Indian Premier League cricket team this season. In December 2015, his birthday became a gala with 200 people and featuring a firework display and performances by Sonu Nigam and Spanish pop star Enrique Iglesias worth 3.5 crore. The whole party cost him more than $2 billion.
Indeed a big lesson for entrepreneurs!
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Accept your mistakes
When you know you are at fault, try to correct yourself as soon as possible before the worst comes. Vijay Mallya could have saved himself from all this chaos by selling his shares and preparing an exit strategy long back when the indications of his failed business were clear. But his refusal to accept his failure, made him pay a big price. And he is still paying, rather yet to pay!
The field of business, start-ups and entrepreneurship is a game of making the right strategies and decisions at the right time. Vijay Mallya, once the King of Good Times has fallen on bad times owing to his own mistakes which no entrepreneur should make.
