Chapter 1 — Arjun Hears the News
A regular customer asks Ravi directly.
Arjun has been coming to the cafe every morning for two years. He has watched it grow from a quiet new opening into a neighbourhood institution. When word reaches him that Ravi is looking for a partner to fund a second location, he walks up to the counter one morning and asks Ravi straight.
Ravi lays out the plan clearly — the first cafe is profitable, he has found a similar second location, and he needs a partner who can bring in Rs.25 lakh for a 40% stake. The money would fund the new cafe entirely. Arjun is interested. But interest is not commitment.
Chapter 2 — Trust Is Not Enough
Arjun likes Ravi. But he needs to verify the numbers.
Ravi is an honest person — Arjun knows that from two years of morning conversations. But investing money is different from sharing a table. Arjun asks for three years of financial statements. His first test: does the cash flow match the reported profit? Net profit Rs.1.4 lakh. Operating cash flow Rs.1.9 lakh. Cash exceeds profit — a green flag.
This is fraud analysis — not an accusation, but a process. Even honest people present numbers through the lens of optimism. Arjun is not questioning Ravi's character. He is doing what every responsible investor must do before writing a cheque.
Chapter 3 — Three Tests, One Verdict
Arjun runs the numbers. Ravi passes on every count.
Cash test: pass. Receivables test: pass — mostly cash sales, tiny receivables growing slowly. Expenses test: pass — food costs at 45% of revenue, in line with industry norms, no unusual payments. Every line checks out.
Arjun's verdict: the books are clean. The business is exactly what Ravi said it was. Now he can move to the real question — is the cafe worth what Ravi is asking, and does he believe Ravi can replicate the formula in a second location?
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