Originally published on November 10, 2014.
Mr. Subramaniam Sutharshan used to be a bag man of sorts. For the past 10 years, his business, Kumaran Builders, focused on formwork shuttering fabrication – the process of shaping and strengthening liquid concrete during construction – in Northern Sri Lanka, which is in the process of rebuilding after a 30-year civil war. He has had a few contracts here and there, and he had an office from his home, but all of his records and files were in a plastic shopping bag.
His work continued apace for the last several years, and he managed to assist in the construction of approximately 800 square meters of building space per month for entities such as the University of Jaffna, and local government bodies. Once the smoke had cleared after the conflict, he recognized that there was a large gap in the supply and demand for construction services. However, he was limited in his ability to take on numerous contracts at once. The desire to fill the supply gap led him to VEGA/BIZ+, a USAID-funded program implemented by Land O’Lakes International Development through Volunteers for Economic Growth Alliance (VEGA). This four-year project is providing financial and technical assistance to small and medium sized enterprises in economically lagging districts of Sri Lanka.
BIZ+ support has allowed me to close the gap.
Just 23 months after first engaging VEGA/BIZ+ for business development support, Mr. Sutharshan has moved from his shopping bag to a new office for his business, Kumaran Builders. It is very simple, but it has a roof, unadorned concrete walls and flooring, and an office desk, computer, and printer. He has also employed a bookkeeper and an administrative assistant. The office is co-located in his newly built storage facility, which is now housing new props and other shuttering equipment, procured by BIZ+. Despite its simplicity, having a physical office, and two administrative staff, is a major step-up for Mr. Sutharshan.
This expansion came to fruition with help from a VEGA/BIZ+ investment grant of 13,503,048 Rupees (approx. $104,000), which Mr. Sutharshan has matched with his own contribution, to meet BIZ+’s mandatory minimum 1:1 match requirement. It consisted of the construction of a storage facility and an office equipped with computers and printers to manage financial and employee records, and a vehicle to transport equipment. Most importantly, Land O’Lakes procured 3,000 galvanized steel props and 1,000 tin sheets – both essential to the shuttering process - which increased his installation capacity (currently less than 12,000 square meters per year) five-fold.
The contents of his former shopping bag are now filed in his new office - it’s a complete transformation. Prior to the BIZ+ grant, Mr. Sutharshan had work, but he also had debts. His financial difficulties were exacerbated by his informal and incomplete style of bookkeeping. He had an office, but it was in his house, as was the equipment that he needed to conduct his shuttering work. He had employees, but that amounted to a dozen laborers, with no one to assist him with the administrative work.
In addition to financial assistance, BIZ+ continues to provide ongoing technical assistance to Mr. Sutharshan in various areas of business operations and financial management, in order to improve his management capacity. The benefit of this assistance is seen in his accounting ledgers which are far more comprehensive than they had ever been before. He has a much better grasp on his finances and can manage his debt and cash flow. Seated at the new office desks are an accountant, an administrator, and a security guard for the site. These represent just a few of the 55 new direct livelihood opportunities that the company’s expansion is creating by the ability of working on, and managing, numerous construction contracts simultaneously.
The BIZ+ investment grant program does not simply consist of giving hand-outs to businesses. Businesses who received assistance undergo a rigorous application and due diligence process to ensure compliance with local approvals, permits, and environmental standards, as well as the preparation of business plans. There is also a 1:1 match requirement.
When asked what the biggest benefit of BIZ+’s application and due diligence process has been for him, Mr. Sutharshan says, “Although it was a difficult process for me, the biggest difference has been made in my financial records. They were a real mess before, I had to go through all my past records, and put them together, in order to submit them for the application. It took me five months, maybe more.”
How does the future look for Kumaran Builders? Per Sutharshan, “With the new national budget being presented, there is a lot of promise for development and construction projects in the North. It will take some time, but I am sure the contracts will come.” He does admit that there remain capacity gaps between him and more established competitors, but he believes, “BIZ+ support has allowed me to close the gap”, and he is confident that it is a gap that will only continue to shrink.