This Street Hawker Taught Business to a Banker Like Me

"Never Judge The Book By Its Cover"

How many times have you heard this phrase? I bet, at least once in your lifetime. But, I had the honor of experiencing it in my real life. And, that moment will probably stay with me forever.

I was born in Mumbai, India, and was the only child of my banker parents. I lived my life in a middle-class neighborhood seeing my parents work hard to make ends meet. I had an excellent academic record and started working at 21 with a Multinational Bank after graduating with good scores.

Over the next 17 years, I completed my MBA in Finance from a reputed institute and worked hard to make my way through the corporate ladder to reach the mid-management level, with a 6 figure salary.

With a beautiful soulmate and two-year-old son, I could afford a decent apartment in the middle of Mumbai (one of the priciest cities in India).

Life felt perfect, with both my parents and family happy with my achievements. I also felt that my achievement was worth an example, one I quoted to all the newcomers as motivation during their induction training (I was also a trainer in my corporate life).

If you wonder why I am sharing my history, which is irrelevant to the topic, you will understand that in the latter part of the story.

So, with all that I have achieved, I follow a tradition of visiting a shrine 500 km outside of Mumbai to thank the Lord for the good life he has given me.

On one such trip in August of 2019, I was traveling back to Mumbai after offering prayers when I saw a street hawker carrying some cotton candies standing on the side of the road, trying to stop vehicles for a lift.

With a muddy tarnished shirt and shorts, along with an old pair of flip-flops, he looked like a beggar. With a mind full of spiritual thoughts and a heart full of sympathy, I pulled over to the side and signaled him to come over.

He came running towards the vehicle. I pulled down my window and asked him where he wanted to go. His place was 100 km away from our current location, and I told him to get in.

As he got in, I felt bad looking at his condition. He was sweating and smelling. I pulled my water bottle out and offered it to him. He emptied the bottle in one go, seems he was thirsty standing under the sun looking for a pick-up.

The journey to his drop point was nearly 1.5 hrs away, so I thought of starting a conversation with him.

Me: So what do you do for a living?

Hawker: I sell cotton candies at banquets and marriage halls in this city.

Me: So you travel 100 km to sell cotton candies. How much do they cost?

Hawker: Each one is Rs. 10 (approx 14 cents as 1 $ is Rs. 72)

Me: How much do you sell in a day

Hawker: 200 on a bad day else approx. 300.

My banker mind took the number and subconsciously started to calculate - avg. 250 pieces * 10 per piece = Rs. 2500 per day * 30 days * 12 months = Rs. 900,000 per year.

Wow!, my mind started to re-calculate. It was just not able to digest such numbers from a man who I felt pity about a few moments back. Those numbers would shame a newbie in my Industry who spends his initial income on gadgets and expensive clothes to adorn his personality with an empty bank account.

My mind was not ready to accept - maybe there was something which I was missing, perhaps the cost is high enough to gain any margin.

The conversation was getting exciting, and I wanted to dig deeper to convince myself.

So, I popped the question, "How much is the cost? Sorry, you won't understand; how much do you spend on raw material?"

His reply was faster than my thoughts, "Sir, the only ingredient is sugar, which is Rs. 32 per kg in the market, but since I buy in bulk, I get it at a wholesale rate of Rs. 28. 1 kg is enough for 300 candies, and the only other cost is a small plastic bag and electricity for the machine, which costs another Rs. 1, per cotton candy."

This guy knew his numbers better than my cost accountant, and he was throwing it at me like a ton of bricks, which made me feel small and hurt my ego.

Anyways, the reason I was feeling embarrassed was because of the calculations I was subconsciously doing at the back of my head.

So this was his cost - Rs. (1 cost * 300 candis) + 28 sugar per kg = 328 per day * 30 days * 12 months = Rs. 118k per month against a sale of Rs. 900k - a whooping 750%+ ROI.

With all the knowledge, financial calculations, and investing in high-risk equities, I could never get that ROI, which this guy was earning with not even a quarter of my risk. My economics was failing to explain this theory.

This guy had unknowingly crushed my ego. But, just as I thought it was over, I was not ready for what was coming next.

"How much rent do you pay?" I just wanted to reconfirm, to ensure he had not missed any cost, to reinstate my ego.

"Sir, I don't have a fixed place. I stand outside schools, marriage halls, and banquets that have enough kids to sell my product. Yes, but I do pay Rs. 100 weekly to managers of these places to inform him about an upcoming event and the people expected. So with around 50 such sites, I end up paying Rs. 20,000 to these guys every month. It helps me to arrange for the supplies and ensures that he was in the right place at the right time, with the right inventory."

After I heard the answer, I thought there was an opportunity to show him my management skills. I asked him why he has to pay 50 people when he can be there at only one place. Can't he reduce the sites which are low-paying and cut expenses?

His reply stunned me and shattered all the halo I had of my achievements.

He calmly replied, "Sir, I have around 25 people from my village who work for me. Most of them are young guys who attend night college and work with me in the morning for monetary support for their family and paying college fees. I pay each one of them Rs. 15000 per month. I have a small truck, which I hire to transport them from my village to the event halls and back, and pay the transport guy Rs 5000 pm. Some of these guys are not from the village, so I have rented two rooms to stay. I also stay with them."

My brain was too exhausted to continue any calculation by now. The destination was 10 mins away. So I decided to deviate from the topic and asked the final question, "Where is your family, and where do you invest the money you earn?"

The answer was the final nail in my coffin and instantly shut me up.

"I am not from this place. I am from the north of India. I just traveled here to work. I send all my earnings to my family back home. We invested in 50 acres of farmland, built a few guesthouses, and rented to college kids. I earn around Rs. 150k per month from rent. We sell the farm produce and earn around Rs. 2 million a year. I also have 3 SUVs, of which one is for my family transportation, and the other two are rented to cab agencies, which bring in about Rs. 50k a month after paying my 2 drivers Rs. 15000 monthly salary."

I was speechless but also a bit frustrated. After listening to everything he had said, I felt he was dressing up to fool people and take advantage (you generally get negative when defeated)

So, I asked him, "If you have so much money, why do you dress up like a beggar?"

His final answer before getting down, with a smile, "Sir, people buy from me more out of sympathy. If I wear expensive clothes, do you think people will be interested in buying anything? I am dressed up for my business, similar to how you guys do in your offices. God bless you for helping me, and Thank you for a kind heart".

He opened the door, got down, and vanished into the woods. I reached home, had my food, and tried to go to bed. But no, I was not able to sleep. My mind was in a state of shock.

I got up, pulled out a paper, and started to put down all the numbers that the guy quoted. How can a banker leave the calculation midway? I had to see what his actual income was. I started to put down whatever he had told me and ended up with $300k p.a. (that is $ not rupees, and if interested, I have put the calculation at the end of the story for reference). This guy was super-rich by any Indian standards, earning much more than some of the small-time businessmen.

I was in a state of Aww! My heart filled with respect for this humble guy that I had just met a few hours back. And why not? He had just taught me the biggest business lesson of my life.

He was not a hawker; he was an entrepreneur in disguise.

Key Learning

It would be wrong to say its a learning, it's more an eyeopener. All our life we talk about degrees, courses, creating brands, budgets, statistics, and growth.

This guy is selling a simple and generic product without any brand. Still he has been able to achieve more than most of us do with all the resources we have.

The one thing he has is dedication and experience. He knows his business better than anybody and he only listen's to his heart.

This is the most important lesson which I learnt, and I am sure you have too.

Here is the break-up of his income and expense. See it, believe it!