Tuesday, December 13, 2011

Journey to retirement - chapter 4 -   Life as an entrepreneur.

When I left American Marine to embark on my very first business venture, the business that my partners and I planned was the most unusual business that anyone could have thought of doing. It was manufacturing parts for one of the largest casket company in USA. Our new company was to supply wooden parts to this company in USA for assembly.

From a business point of view, it was a fantastic business as the profit margin was high and the manufacturing was relatively simple compared to building luxurious yachts. However in a Chinese society this kind of business was taboo and considered bad luck, especially in Singapore where the majority of Chinese are highly superstitious.

The company was owned and managed by the three of us - an American called Anton who was in charge of marketing, an Englishman called Tony who was in charge of finance and myself in charge of design and manufacturing. We rented a small manufacturing facility in Upper Bukit Timah Road. We hired ten employees and the business was pretty successful for the first two years.

Unfortunately, the two major shareholders, Anton and Tony, did not get along. They were constantly at odds with one another that resulted in heated arguments and at times almost to fist fights. During the 1970s, overseas telephone calls were very expensive, about S$1.50 to $3.00 per minute which unlike now are practically free. At times, these two persons could argue and shout across the globe at each other over the phone for an hour. A substantial part of the profit was wasted on unnecessary telephone calls.

Eventually they had enough of each other and decided to terminate the business. Since the two of them had the controlling interest of the company, there was little I could do to prevent them from closing the company. I did not have the financial resources to take over nor the marketing expertise to run the company. Trying to get a local investor was impossible as potential investors would shy away and no one would want to talk to me.

Some of the caskets and furniture that we manufactured in Singapore for assembly in USA.

The two major shareholders left me to wind down the company as they could not stand the sight of each other. The winding down of a casket manufacturing company was an experience.  I was mocked, scolded, phones slammed when I tried to give or donate the caskets away in Singapore. In the end I had to cut them into small pieces and throw them away. Only a few pieces were taken by a friend who used them as coffee tables.

The failure of my first business venture taught me a great deal about human relationship and reality. I learned that having a profitable business does not necessarily meant a successful business. A profitable business can only be successful if the people involved in the business are at peace with each other. The ability to interact and get along are much more important than just making a profit. In a way, the same goes for families or countries.

While I was busy winding up the casket manufacturing business, I was planning my next move. My bad experience with the PAP psychopath left me with little respect or trust for the Singapore government. All the propaganda about how the government will narrow the gap between the rich and poor were pure nonsense. If you are not well connected or related to the Lee family, you are expendable. Singapore was fast becoming a two class system - the rich elite and the poor working class. Singapore has no place for the middle class and if there is any, it is fast diminishing.

I knew with my lack of tertiary education and zero elite social connections, Singapore was not a place for me to excel. I decided to try my luck in America where there is a level playing field. Armed with limited fund but full of enthusiasm, I packed my bag and told my wife that I shall be away for 6 months to start a business in Hawaii, USA. Most people thought I was out of my mind.

During the 1970s, there were no long haul 747s, only 707s which took forever to get to your destinations. Besides the tickets were expensive. There was at least one stopover in Hong Kong or Guam for refueling before arriving in Honolulu. During the stopovers in Hong Kong, I would not stay at hotels but would spent the night walking the streets and resting at the airport in order to save the little capital I had. That was life without much capital.

When I arrived in Honolulu, Hawaii in 1979 I was met at the airport by Mort Gazley, a friend whom I knew when I was in the casket manufacturing business. We decided to start a business selling souvenir items, i.e. beach mats, tote bags, etc. to stores along Waikiki Beach.

To our surprise, the souvenir business went off to a remarkable start. We had more than 300 accounts within the 1st year. We worked 12 hours a day - 5 hours making cold calls to retail outlets along Waikiki Beach and the rest doing presentations, artwork and orders to factories. Most of the orders were for beach mats that I customized for individual customers.

During the 1970s and 80s, PCs and laptops were unheard of. Chips were not invented yet and computers were operated by jaguar cards. A computer with less than 1G memory would occupy a space of 10,000 sq feet.  Only giant international companies could afford to have computers.

All the presentations, artwork and designs had to be done by hand. Fortunately I was able to draw fast and that impressed  my customers. I was able to make the presentations on the spot during the meetings.

We had a great time doing all kinds of crazy exhibitions and promotions in Hawaii.

The initial manufacturing were done in Singapore by a small factory but soon demand outpaced  production capacity,  I had to scout for another manufacturer in Johore Bahru but even that factory reached its full capacity within months.

I was forced to look elsewhere for manufacturing capacity to meet the demands from Hawaii. My Mandarin was poor but nevertheless made a trip to Taiwan to look for additional suppliers out of desperation. It was a bold move as I did not have a friend or any contact in Taiwan.

When I arrived in Taiwan, the first place to I went was the trade department in Taipei.  At the trade office they provided me with a list of potential suppliers.

 Back in the 1970s and 1980s, few Taiwanese could speak English, especially factory bosses. With my poor command of Mandarin, it was difficult to communicate. In addition, most of the factory employees spoke mainly Taiwanese, not Mandarin. Nevertheless, with a combination of sign language and poor mandarin,  I managed to get my messages across. After a few months my Mandarin had improved enough to effectively communicate with the Taiwanese at ease. 

The Taiwanese were impressed that I was willing to work late to rush out the new designs using the jaguar cards. I was traveling almost weekly from Hawaii to Taiwan and back in order to keep up with the orders. 

The Hawaiian Mats business was successful beyond our dreams. Within two years we had more than 500 retail outlets selling our products. We managed to obtain the licence for the Winter Olympics, orders for the Ted Kennedy campaign, the Democratic Presidential hopeful in 1980, the Army and Air Force shops, and big corporations logos, etc. We had 5 factories working full time to cater to our orders.

Unfortunately,  success had gone to our heads and my partner was fooling around at night clubs along Waikiki splurging on beautiful girls.  On one of my trips to Taiwan to supervise some orders, my partner and his girl friend emptied the company’s bank account and disappeared during my absence. In addition, he took money from other companies and some of his friends as well.

It was a criminal offense but the FBI could not locate him or his girl friend. For me, it was a devastating blow. It was such a pity because we had a promising business. The profit was more than enough for the two of us. Yet my partner preferred to kill the goose that lays the golden eggs and be on the run from law for the rest of his life. Maybe he had plans to hide and retired in Mexico or some Latin American countries with his Latino girl friend.

In the meantime I had to manage the business all by myself. Fortunately, the business was not bankrupt because we had some accounts receivable and we had no accounts payable. But it  was extremely stressful and depressing. On a trip to Taiwan, the depression magnified to an extreme that I wanted to jump out of the plane. My head was not thinking right and filled with anxieties. All I wanted  was to get out of the plane. There was no explanation for the urge to jump out of the plane. Fortunately I still had the presence of mind to take deep breaths and begin to meditate.

I was traumatized by that event and realized that committing suicide was just a matter of a split second. My head was split between jumping or holding back. It was a scary experience.

After that incident, I decided that I have to take a break and a long rest to recoup before I do something stupid like committing suicide or hurting somebody.  I slow down the business by taking less orders and channel most orders directly to the factories on commissions basis.

I had ulcers and was taking Valium to calm me down. Whenever I felt my head exploding, I would jogged for miles and miles until I had control of myself, constantly reminding myself that I had lost wealth but I cannot afford to lose my health as well. It took me about six months to recover well enough to begin all over again.

Journey to Retirement - Chapter 5 ....

Encounter with a Legend and celebrity... another big break, followed by a bigger break!

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