A business friend gave me the book The 80:20 Manager. I didn’t read it for six months, assuming it was just another self-help book—good to read but quickly forgotten. However, it turned out to align with my existing beliefs and was easy to follow. It gave me the confidence to implement what I already believed.

In essence, the book is about the Pareto Principle applied to management: 20% of selected inputs lead to 80% of the outputs. In business, for instance, 20% of customers may generate 80% of revenue and profits.

Since starting the business three years ago, we’ve explored various strategies. Here are a few ways we’ve regained focus in the last three months:

Other Edible Oils Trading

As coconut oil became dearer, consumers shifted to other edible oils. Demand within our market declined, especially for larger SKUs like 1-litre pouches, in favor of 500 ml ones. So, we began trading in other edible oils like Refined Palmolein, Refined Sunflower Oil, and Lamp Oil. This allowed us to:

• Offer a complete range of edible oils to our existing coconut oil customers (retailers).
• Generate more income from the same customer base using the same distribution infrastructure.
• Fully utilize vehicle loads and stay informed about fluctuations in other edible oil markets.

However, this came with downsides:

1. Focus shifted away from our core business—manufacturing and marketing coconut oil.
2. Service levels dropped due to supply disruptions from our vendors.
3. It created a lot of additional work in transportation, loading/unloading, accounting, leak management, credit sales, and working capital management.

While the trading looked productive on the surface, it didn’t help build the Cocoguru brand or improve profitability. So, we stopped it entirely. We closed the Sullia godown, released a rented vehicle, and saved other operational resources.

Distribution

Initially, we supplied coconut oil directly to wholesalers and retailers using our own sales vans, which required a driver and a salesman for each vehicle. To manage these operations, we also needed accountants and an officer. These were unrewarding tasks for a manufacturer, but necessary to establish our market presence. Sales and distribution accounted for 40% of our expenses, with five vans operating across Dakshina Kannada.

It had long been my dream to hand over line sales to distributors, but they would only take it up when confident about the brand’s strength and profitability. The bold step of increasing our selling price made this shift possible much sooner. We let go of less productive salespeople, converted motivated ones into distributors, and transferred our vehicles to them at reasonable rates. This allowed us to offload 12 people from payroll, stop renting two vehicles, sell two company-owned vehicles, and reduce the need for two accountants, a logistics officer, and top management involvement.

Expenses are now under control, and pricing is predictable. When distributors rely on sales for their livelihood, they perform better—sales have improved significantly.

Leaving Customers

In our eagerness to grow, we initially served any customer, no matter the cost. But some customers are simply not worth the effort—they demand discounts, credit, special attention, and are hard to please. Letting go of such customers has been a win-win. We now focus on profitable customers, while others find service better suited to their expectations elsewhere. For every customer lost, there are others to gain.

Piece Work / Contract Labour

According to Theory X, laborers tend to work the least for the most wages. Employers, naturally, seek the opposite. Supervisors often struggle to ensure consistent quality and output. To address this, we implemented a piece work system—workers are paid based on output, not attendance. This system is fair and transparent: pay is based solely on performance, not seniority, experience, or bias.

During annual appraisals, workers focus only on salary hikes, with little regard for performance, upskilling, or taking responsibility. For such workers, instant performance-based rewards work better. The results have been remarkable:

• A five-member team that once struggled to segregate 6 tons of copra a day now gets it done with three people—better and faster.
• For bulk loading/unloading, in-house workers were reluctant. Now, at just ₹0.10 per kg, they willingly do it.
• In the packing section, where nine workers once struggled, six now manage easily and even help in other areas.

We reduced our workforce from 30 to around 20. Less productive people moved on, while efficient workers now earn better. Work is done faster, quality has improved, and employee engagement is at its peak.

Lean Operations

These changes significantly reduced our administrative workload. A few redundant roles were eliminated. With this lean setup, we can double our business without hiring more staff. And if business declines, we can manage with minimal overheads. With operations now streamlined and focused, our next steps are to grow sales through advertising and appointing more distributors to expand our reach.

After two years of accumulated losses and uncertainty, this is a refreshing and promising turnaround.