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Cash outflow vs cash inflow

I want my money back,” shouted the mother of one student. “When will you teach him algebra?” screamed another. This was 10 in the morning. Along with the counsellor Havin, I tried, unsuccessfully, to avert the verbal blows of some seven parents who had come with their wards, all students at the Common Admission Test (CAT) coaching centre I work for.

I was there to take a Common Management Admission Test (CMAT) class. CMAT is the new online test that can be taken twice a year for entry to some 2,500 business schools across India. Except for a few decent schools, most schools that use CMAT scores are, regrettably, mere buildings owned by shady politicians with no hope nor succour for their inhabitants.

The shifting and jostling inside the centre due to the sudden arrival of so many people was a serious nightmare. Their complaint was this: the English portion of CAT was over and yet the centre had been summoning their sons and daughters for English classes. Maths and Data Interpretation are far bigger syllabus-wise and a lot of that portion was incomplete. Why continue taking English classes when that time could be used to teach arithmetic and geometry, they argued.

As I said, I was taking a class when the horde descended upon the unsuspecting premises. We run the classes from the first floor of an imposing building right across the Dadar railway station. It’s a tiny office at the end of long corridor of similar coaching centres. Right opposite our centre is the head office of another CAT training institute. No wonder, all eyes were agog.

In the event, all regular classes were cancelled and Shishu Vihar, a school we hire for special events, was booked for eight-hour Maths sessions on Saturday and Sunday. Rohan, the faculty member who teaches Maths, was called in, resulting in his calling off a planned trip to Lonavala with his girlfriend (it was her birthday!). “Why did you have to finish the English portion so fast, dude?” he said to me, only half-jokingly.

I returned home. The packed weekend had been transformed into a fallow space-time continuum that I had to find a way to kill. But in the meantime, a different worry troubled me. Roy, the proprietor of the institute, had called me a few days ago to say that he would like me to go back to being a freelancer with the institute, not a full-timer. This was bad news, whichever way one looked at it.

First, my pay, already shoddy by B-school standards, would be cut to half. Second, they needed my services as a full-timer again from March when the CAT group discussion (GD)/personal interview (PI) rounds begin, so in effect, they were telling me to adopt this new situation for only three months. The more serious implication was that they expected me to flexible with my contract as per the headwinds.

I returned home, the soft sunlight of early morning refusing to cheer me up. I had to somehow show that I was still useful, no matter my breakneck performance as English teacher. I wrote Roy a mail:

Dear Roy,
As you are aware, the CAT English portion is done and I will be taking workshops. The CMAT will take some of my time. And some for XAT, NMAT and SNAP. The GD-PI prep will begin in February once the IIMs come out with CAT results.
I was wondering if we should start GRE Verbal Prep. That can be a new business opportunity. We don’t have to offer Math because most students prepare only for Verbal in GRE.
Let’s consider this and take it forward.

When I told my flatmate Raghu about this, he analysed the situation from his usual consultant angle. “See, you have to give them a reason to keep you,” he said. “Right now they are looking at you as a PE firm would, that is, on a cash basis. Cash outflow versus cash inflow, and your contribution thereof. They pay you Rs 60,000 a month, yet you don’t work eight hours. Challenge them. Tell them…wait, how many students do you teach?”

“400,” I said.
“And how much does every student pay as fee?”
“Rs 30,000.”
“Which means, 400 x Rs 30,000 = Rs 1.2 crore.”
“You didn’t know this?”
“No, I mean yes, but I never actually calculated.”
“Wow. So well, yes, hello, good morning. They make Rs 1.2 crore off you and pay you a measly Rs 7 lakh. Neat!”

My stupid brain was still trying to digest the figures. But Raghu continued:

“As I was saying, challenge them. Tell them not to value you in terms of hours spent, but in term of value added. Like entrepreneurs, they should value your contribution on accrual basis, as in, depending on when the investment begins paying off. In those terms, your inputs as English faculty and GD/PI trainer will look more muscular than they do now. Tell them this and they will not make you freelance, right? Vikram? Vikram?”

I had already passed out, the magic Rs 1.2-crore figure hovering above me.

The author has switched too many jobs in the past and hopes he can hold down this one


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