What they learnt: Gautam Modi, Gautam Paper Udhyog

Stocking excess inventory costed Modi a dent in the balance sheet. Soon enough the company came to answer the question: to stock or not to stock...

05 Jan 2016 | By Priya Raju

 
We have a few regular clients for whom we offered customisation of their products. We had presumed that we will receive the orders from these clients for specific products. We went ahead and ordered the raw materials required for the jobs. In the process, we ordered excess materials, which resulted in excess stocks in our inventory.
 
We realised that by the end of the year we actually did not receive enough repeat orders for those products.
 
And we had followed this process for quite a few clients. This proved to be a mistake. 
 
The year-end finance checks revealed that we had incurred a loss of around Rs 80-lakhs, which caused a dent in our balance sheet.
 
LESSON LEARNT
Always be careful and never arrive at a cost in hurry. Even a software like Excel can malfunction and to cross check is a preventive method. One should spend considerable time understanding the cost calculation and acquire knowledge of different substrates.
 
Modi joined Gautam Paper Udhyog in 2009. The firm was started by his father JM Modi in the year 1999. Soon after completing his high school he joined the family business and continued pursuing  studies for CA and a family business course. He has always pursued studies along with being practically involved in business which has helped him gain a lot of experience without 
consuming much time.
 

"Success is how high you bounce when you hit bottom," says Hyuma Mahadevia of Yamir Packaging
Read his story here