Teaching street cred

Lower net profit is always hard to explain and the managing director of an education services company was struggling to do just this at a press conference announcing its results. Eventually, he resorted to a street food analogy to make his point. His business, he said, was like the vada pav business. In spite of the presence of numerous vada pav stalls, demand was so high that many more were set up on a regular basis. In the same way, he went on, demand for education services was growing so fast that his company was building many more centres to meet this additional demand, which increased expenditure in the short run and, therefore, lowered profits. That, he added, was the difference with the vada pav business — the costs of expansion would reflect in his Profit & Loss account whereas the low-cost vada pav business could get away with it.