A qist plan on something that earns its own money

Most qist plans are for things that only cost money. A sewing machine is not one of them. When the item will earn, size the installment from what it brings in, not from the household budget, and start the plan after the first work arrives. That one change saves more of these plans than anything else.

Two kinds of qist item

Look at what usually leaves a shop on a plan. A fridge. A television. A bed. Good items, and every one only takes money out of a house.

Now the other list. A sewing machine. A hand cart. A delivery bike. A freezer for a tea stall. A photocopier beside a college gate. A box of tools for a man who fits ceiling fans. Each is bought so it can bring money back in.

That fact should change how you build the plan. In most shops it changes nothing at all.

Built right, this is the safest plan in your khata. The item pays its own installment. You are not squeezing money out of a salary already spoken for, you are taking a slice of what the machine made.

Built wrong, it is worse than an ordinary plan. The machine earns only while it works, and only while he works it. A fridge nobody opens still leaves a family fed. A stopped sewing machine takes your money down with it, because it was the whole reason the money was going to exist. First, be sure a plan is the right shape for the sale. Udhaar or qist on a big item settles that.

Twenty to ten on a Tuesday morning, and Yasir stands in Shabbir's shop with his hand flat on a sewing machine. Eleven years stitching on somebody else's machine, and he wants his own. Shabbir does what most shops do: he asks what Yasir can pay a month. Yasir says Rs 5,000, because that is what a man says when he wants the thing badly. Neither asks the question that matters. What will this machine pay?

Size the installment from what the item earns

Three numbers, in this order.

One: what it brings in on an ordinary week. Not his best week. Not the week the whole street had a wedding.

Two: what goes straight back out. Thread, needles and bobbins. Fuel for a delivery bike. Ice for a freezer. Toner for a photocopier. That is not earnings, it is the cost of running the item, and a man who has never owned the machine forgets it every time.

Three: what is left. That is the item's own money, and the only pot the installment may come out of.

Then take about a third of it.

A third sounds cautious. It is meant to. A plan that takes a third of what the machine leaves survives a slow stretch, a fever, a family wedding, three days with no power. One that takes two thirds looks fine on paper and breaks the first week he cannot sit at it.

Never size it from the household budget instead. That budget was spent before the machine arrived. Anything promised out of it comes from somewhere else, usually another shopkeeper on the same road.

How to ask what it earns without sounding like an inspector

A man will tell you what a shirt pays. He will not tell you what he earns. To you those are one question. To him they are nothing alike, so ask the first.

Ask about the work, in the words of the work:

"What does one shirt pay you?"

"On an ordinary week, how many come in?"

"And what do the thread and the current cost you for that?"

Then say the number back to him, out loud, as a shopkeeper doing arithmetic and not as a man checking up on him:

"So a normal week brings around Rs 3,000, and about Rs 600 goes back out. That leaves you Rs 2,400. Have I got it right?"

He will correct you. That is the point. His correction is the truest number you will get all day, because he is fixing your arithmetic, not defending his pocket.

How to ask what the item will earn

✓Ask about the work

• "What does one shirt pay you?"
• "On an ordinary week, how many come in?"
• "What do the thread and the current cost you for that?"
• "So about Rs 2,400 stays with you. Have I got that right?"
• "How long before the first orders start coming?"

✕Not about his pocket

• "How much do you earn in a month?"
• "What have you got saved up?"
• "Are you sure you can manage Rs 3,000?"
• "Who else in the bazaar has your money?"
• "Bring your brother, I will ask him."

Leave two questions alone: what he earns in a month, and what he has saved.

The weeks before it earns anything

Here is the mistake that kills more of these plans than all the others together.

A machine bought on Tuesday does not earn on Friday. He has to find the work. He has to learn this machine, because his hands know a different one. He has to tell people he takes orders now, and wait for the first to believe it. For most trades that is four to six weeks of very little, landing exactly when he has emptied his savings into your down payment.

So on an ordinary plan the first installment falls due at his emptiest moment of the year.

The fix costs you nothing. Set the first date later than the rest: six weeks out instead of four, or eight if his trade is slow to start. If you would rather keep the dates even, make the first payment half and add the difference to the last two. Either way the total does not move by one rupee.

The same plan, with the first date pushed out

1. Day oneDown payment, the machine goes homeRs 8,400Paid
2. Weeks 1 to 6He learns the machine and finds the first ordersRs 0Gap, on purpose
3. Week 6Installment 1 of 8, on the 5thRs 3,000Due
4. One month laterInstallment 2 of 8, same date every timeRs 3,000Due
5. The five in betweenInstallments 3 to 7, nothing added, nothing movedRs 15,000Due
6. The last dateInstallment 8 of 8, the plan closesRs 3,000Due

Half past seven in the evening, and Iqbal leans on Kamran's hardware counter talking about a freezer for his tea stall. Kamran learned this one the hard way. He asks how long before the freezer starts paying for itself. Iqbal thinks, and says the cold drinks will only move once people know he keeps them. Perhaps a month. So Kamran writes the down payment for today and the first installment for six weeks out, in ink, on both copies. That line is why Iqbal is still paying a year later. The rest follows how to build a qist plan that stays fair.

What the numbers look like on a Rs 30,000 machine

Say: a Rs 30,000 sewing machine, built on what it earns

Cash price, if he paid the whole amount todayRs 30,000

One-time markup, 8%, added once when the plan is madeRs 2,400

Plan price, frozen from the first day to the lastRs 32,400

Down payment, taken on the day the machine leavesRs 8,400

Still to collect after the down paymentRs 24,000

The machine brings in, in an ordinary monthRs 12,000

Thread, needles and current for that monthRs 2,400

What the machine actually leaves himRs 9,600

Eight installments, under a third of thatRs 3,000

Total he pays, agreed before the machine left the shopRs 32,400

An example plan, not real shop data. The markup is added once and never again, and nothing is ever added for a delay.

Read the last line first. Rs 32,400 is what he pays, first day to last, settled before the machine left the shop.

The markup is a one time thing. You look at the cash price, add your percentage once, and the number freezes. It does not grow because eight months went by, and it does not grow because a date slipped. It is a price, not a running meter.

Say the other half out loud too, because a customer with an earning machine sometimes expects it. The price is fixed at the start whatever the machine makes. If he has a wonderful stretch you do not ask for more, and if he has a poor one it does not shrink. Taking a cut of what he earns is a different business, and this is not it.

Now hold the payment against the earnings. The machine leaves him about Rs 9,600 a month once thread and current are paid. Rs 3,000 of that is yours, under a third. He keeps Rs 6,600 and still clears you in full. That is a plan a man defends when things get tight. If your own cash is thin and the item must be ordered in, take an advance before you order it.

The item is your security, but only for a while

There is a comfort in this kind of sale. If everything fails, the machine still exists and is worth money to somebody. That comfort is real, and it has a short life.

A sewing machine run eight hours a day for twelve months is not the machine you sold. A delivery bike after a year of loaded runs is worth a fraction of the morning it left. A freezer switched through a hundred power cuts may not survive being moved.

So build the plan around that fall. At every point, what he still owes should be less than what the used item would fetch on your street. That keeps a plan honest without one threatening word: walking away costs him more than paying.

It also tells you when to stop stretching. If he asks you to spread it so thin that in month ten he still owes Rs 18,000 on a machine worth Rs 12,000, the plan is no longer covered. Shorten it, raise the down payment, or ask somebody to stand behind it. When to ask for a guarantor helps you pick.

And remember what taking the item back really does. It ends his earning, which ends the only source your remaining money was coming from. It is the last door, not the second.

Four risks that belong only to this plan

An ordinary plan carries one risk: his income stops. This kind carries four, and each has a question you can ask while the machine is still on your floor.

His health. His hands are half the machine. Ask who else at home can run it if he is laid up for a fortnight.

The season of his trade. A tailor is buried before a wedding season and quiet for weeks after. A freezer earns in the heat and sleeps in the cold. Ask which months are thin, and put the smaller payments there.

One big customer. If a single shop sends him most of his work, his plan is really that shop's plan. Ask how many places send him work. Three names is a business. One name is a risk in a business coat.

The item breaking. Ask who repairs it, how far away that man sits, and what a repair costs. Without an answer he arrives one day with a broken machine and no payment, and you argue about two things at once.

Six questions before the item leaves your shop

• If he is laid up for two weeks, who else can run it?
• Which months are thin for his trade, and which are full?
• How many different places send him work? One name is a risk.
• Who repairs it, how far away, and what does a repair cost?
• How long before the first work comes in? Add two weeks to his answer.
• In month six, is what he still owes less than the used item is worth?

When one of the four lands, the answer is the same. Re-date, do not re-price. Move the payment, write the new date on both copies, add nothing for the delay. When a qist payment is missed walks through it.

Write it down before the machine leaves the shop

Before the item leaves your door, write down the item with its serial or engine number, the cash price, the one time markup in rupees, the down payment, the amount of each payment, and every date, starting with a first one deliberately later than the rest. Two copies: one with you, one home with the machine.

Write the reason for that first date too, in five words. "First date late, machine starting up." Six months on, that half line is the difference between a plan you both remember the same way and an argument nobody wins. All of this is worth nothing if it lives in two memories.

This is the part a phone does better than a paper book. In Wasoolo an installment plan carries its own dates and its own amounts, so the first can sit six weeks out while the rest run even. Each payment is marked paid or still due as it lands, and you can hand him a printed statement with your shop name on it whenever he asks.

Then, as a date comes close, Wasoolo shows you who to go and see, so wasooli on an earning item stays a short morning round, not a memory test.

How do I find out what the item really earns before I sell it?

Ask about the work, never about his money. What one piece of work pays, how many come in on an ordinary week, what the materials cost. Then say the total back and let him correct it. The correction is the real number.

What if he will not tell me anything at all?

Price it as if the item earns nothing: a bigger down payment, a shorter run. A man who will not discuss the work has told you something.

Should the installment ever be a share of what he earns?

No. Fix the whole price on the day the plan is made and leave it there. A share of his earnings is a partnership, with all the arguing that brings.

How much later should the first date be?

Four to six weeks after the item leaves your shop suits most trades. Ask how long before the first work comes in, then add two weeks.

Is the down payment more important here than on an ordinary plan?

For a different reason. It keeps what he owes below what the used item is worth, and that gap is your security. Hard use drops the value fast.

What do I do when the machine breaks in the middle of a plan?

Move the date, not the price. Find out how long the repair takes, push that payment past it, and write the new date on both copies.