Gaikwad Transport Uses Accelerated Payments to Fund Company Growth

A family-run employee transport business achieves sustainability and growth with renewed cash flow infusion through C2FO’s early payment. 

Industry overview

Employee transportation services (ETS) contribute significantly to the broader taxi industry in India. These businesses continue to flourish based on the demand, whereby companies enter into vehicle lease contracts with third-party transport vendors to help employees commute between their homes and workplaces.

Essentially unorganised by nature, the transportation businesses are usually run by individuals or families. These businesses must often devote considerable time and investment before they can prove themselves as trustworthy and reliable.

It’s not an easy business, said Prasad Gaikwad, partner of Gaikwad Transport, an ETS business based in Pune.

“There is a dearth of reliable manpower. Unforeseen expenditures continue to put us in a state of flux. There is a constant pressure of EMI payments, vehicle maintenance and rising fuel prices. Growing competition in the market and delayed payments further add to our difficulties,” he said.

The Gaikwad journey

In 1992, Suresh Gaikwad began his career as a driver at the Mondelez Asia (then Cadbury) factory in Pune. In recognition of his diligence and commitment, the Mondelez management decided to finance the purchase of Gaikwad’s first vehicle in 1995. He would own and drive the vehicle, thus beginning the journey of Gaikwad Transport. 

Today, Gaikwad Transport stands tall as one of the few successfully run Indian family businesses in the ETS domain. The company operates a fleet of 16 vehicles which includes small- and medium-sized cars and buses. Gaikwad Transport provides Mondelez with pick-up and drop-off services for approximately 200 employees in three shifts across nine locations in and around Pune.

Gaikwad’s sons, Prasad and Anil, were adolescents when he started out. But years of hands-on training has enabled him to hand over the baton to them. The Gaikwad brothers have risen to the occasion, looking after the business together, giving their father the joys of a retired life that he rightfully deserves. 

ETS sector pain points

The Gaikwad brothers have meticulously chosen their areas of focus in running the business. Prasad, the elder sibling, looks after vehicle maintenance, manpower and back-end operations, while Anil handles billing, accounts and client management. While the brothers have succeeded in carrying forward the family legacy with considerable efficiency, Gaikwad Transport is not immune to the regressive facets of the employee transportation business.    

Prasad Gaikwad was candid enough to reveal that, besides the constant overheads of vehicle EMIs, salaries, fuel and other administrative expenses, Gaikwad Transport has to deal with unforeseen expenditures that include vehicle breakdowns, rising fuel prices and staff emergencies. These expenses make it challenging to grow in the ETS sector. Cash flow and working capital issues were holding back the Gaikwad brothers from taking any conspicuous leap in the direction of growth and expansion.

Anil Gaikwad added that, notwithstanding the constant support from Mondelez, the credit period of 45 days for the payment of their invoices sometimes cornered the company with cash flow issues. The constant cash burn and time-bound financial commitments put tremendous pressure on Gaikwad Transport’s working capital management. 

Given that scenario, Mondelez’s introduction of early payment through C2FO to Gaikwad Transport proved to be a significant shot in the arm for the business.   

The C2FO intervention

When the Gaikwad brothers learnt of Mondelez’s early payment program with C2FO in 2018, they acted quickly. Anil Gaikwad immediately got in touch with the C2FO supplier relationship manager (SRM) to understand the processes that were required to operate the platform. It only took a single interaction with the C2FO SRM, followed by a discussion with his father, for Anil to realise that C2FO’s solutions could be an opportunity to get Gaikwad Transport’s cash flow and working capital requirements in good shape. 

Anil, already familiar with the billing and accounting processes, took charge of the Mondelez Early Payment Program through C2FO. It didn’t take him much time to familiarize himself with the intuitive technology interface. He began participating with ease on the platform and Gaikwad Transport began to experience the convenience of operating with a fresh infusion of cash flow. Payments were now being realised 30-35 days ahead of time without disrupting Gaikwad Transport’s credit line. The Gaikwads have used the flexibility of this solution to their advantage. In the rare cases of doubt, the C2FO SRM was quick to respond and provide Anil with the requisite support. 

Conclusion

Since accelerating payments through the C2FO platform, the Gaikwad brothers have begun to regulate their cash flow and are gradually fuelling their expansion plans with absolute control and efficiency. 

The Gaikwad Transport fleet has expanded with the addition of new vehicles. The EMIs, salaries and other overheads are being paid, as committed. The company has also experienced an improvement in manpower availability. As a whole, Gaikwad Transport’s delivery is showing encouraging improvements as Mondelez continues to provide vital demand for the ETS company’s services.  

“Money reaching us at a time when it is most required – works wonders for our business. What’s really impressive is that when C2FO commits a payment to us, we are 100% sure that the money will come,” Suresh Gaikwad said.

The Gaikwad brothers are now convinced that the C2FO early payment platform provides an efficient method to fund their working capital and expansion needs. Compared to the hidden costs, processing fees and cumbersome paperwork in banks, C2FO has proven to be less expensive and more convenient. The steady cash flow from C2FO’s early payment solution has helped Gaikwad Transport to function effectively and fathom growth in a broader horizon.

“There’s an old saying – where there is a will, there is a way. In our case, Mondelez – C2FO early payment program provides us with that way,” Prasad Gaikwad said.

To learn how C2FO can help your company manage working capital, click here.