Starting a business can be “easy” or scary, or, it can be euphoric! It’s euphoric when you “just do it!”, and, it could be downright daunting when you really “think” in detail, planning and writing down ALL, or at least most of the steps that you could think, through your head.
Trampolining can also look damn easy. Until you tried it, for the first time. It was easy actually. All you have to do is jump, and bounce. It’s hard to get it wrong, almost impossible. At the place that I went, all around us were trampolines and sponges where the trampolines were connected. Even when you fall there, you won’t hurt yourself.
Unless you fall and twist your legs, arms, head or neck in certain positions. Unlikely though.
Ecstatic
I was ecstatic the first time I jumped into a business of my own, with two partners. Just like the time that I went trampolining with my son!
I heard it from the audiobook “Never Be Sick Again” that trampolining was among the best exercises. Especially for fat people like me. Yes, I was fat-overweight-obese-almost 30kg overweight-BMI30. No hiding it or calling it anything else.
My son Arif, was also at one point going that way. Thus I thought it would be a fun fat father and son to have some “easy” and fun exercise together – not too taxing compared to jogging or hiking at a park…
When we started something “new”, especially something that we thought was “easy”, we often do not or rather never make any preparations. Look at the “sport” – all we had to do was take our shoes, and jump!
We did exactly that!
But in less than fifteen minutes we discovered, “we were farrrrrccckkkked!!!” Yes, it only took us that long to get really knackered! You could see clearly from the photos – Arif’s face and my face!
In business, sometimes it took much longer to get that knackered if you were swimming in venture capital’s (VC) money. But when you are so “good” at “burning” through the VC’s money, you could get knackered THAT fast!
In my own business, the first one I started using an “angel’s” fund (who turned out to be the devil himself!) I faced this “near burn-out”. We didn’t even realize the first mistake we made – we were all salespeople! Not many of any complementary skills. We only knew how to sell.
The “angel” who was also our funding partner, pumped in RM300k as our paid-up capital. As we agreed to take an allowance of RM5,000 a month, the two main and visible partners in the entity, we figured out that we could hire an admin person and a junior salesperson, and that money would last us at least one year. Yes, with all other overheads factored in.
Still, It’s Easy…
It’s easy, right? We were salespeople, having been selling for many years. What’s so difficult in getting some goods to sell, and sell them, right? Just a trading business – buy and sell…
The funding partner had a source, one source for things that we planned to sell. We didn’t realize that everything wanted to sell, we had to purchase it through his other company as the “sole importer” to Malaysia.
We had to buy it in cash, upfront. Not only he had already marked the prices up, we also had to pay through that company before we even received payments from our end customers.
Anyway, I digress. It was easy….. just like trampolining.
If you had millions of ringgit in the bank!!!
We did not plan for a cash flow or projection! We had only one real target client – the national oil company. We heard rumors that it was going to purchase the fire-resistant NOMEX coveralls and we knew that it was already using disposable Tyvek coveralls in its plant maintenance work.
Beyond that, no proper business plan. We targeted the Marine Police; something that we plucked from the air! We also looked at the military and fire department, which we deemed to require “long sales cycles”. What made us think that the national oil company and the Marine Police would buy from us soon? The answer escaped me to this day!
We eventually received some business from them. But it would be good to have some early cash flow from pre-targeted customers. Instead of “just winging it!”
I learned from this first episode that you’d need partners with different capabilities and skills (how stupid of me!). At least in the short and long sales cycles. As I was the one with long sales cycles, the other person needed to bring in the numbers quickly – a short sales cycle!
At that time, we also had no manufacturing skill nor knowledge (ZERO!!!), no sourcing knowledge (except that conman partner). And no clue about financing at all. We just knew how to sell!
That’s what happened when you had three salespersons in business together!
Selling-wise, we were very successful. We had jobs worth upwards of RM30 million! Yes, we won the NOMEX business. Just in the first few months of business. Sourcing for subcontractors (manufacturers) that could work with us to satisfy those contracts was nightmarish!
Manufacturing and managing the subcontractors was a project that could have earned me a PhD in project management, and also, multiple other subjects.
Bled Us Dry
Imagine the client’s company name which had to be embroidered at the back, clearly and of a certain size so that it can be read by anyone – clearly. With the NOMEX material, each embroidered company name would cost RM30 – NOMEX thread on NOMEX fabric.
The specifications had been given. A few samples had been requested – to make sure that the work would be done satisfactorily.
Yet, while running the embroidering and sewing operations, we received a call from our main contractor that ninety-seven pieces of the fabric to be sewn on the coverall’s back, had the client’s name embroidered at a skewed angle…
This meant, the embroidery was done right, but, instead of perfectly horizontal, it was at about 3.5° to the horizontal! The cost of the thread was RM30 per piece, multiplied by 97. While the subcontractor charged RM9 per piece for the embroidery. How would or could we recover the cost of the 97 pieces?
It’s Not Just Apples That Crumble
In less than two years, the business crumbled under its own selling success and operations cluelessness. We were so good at getting sales, but…
A business that had (or was supposed to bring in) RM30m in revenue had no chief operations officer (COO) nor the head of manufacturing. We also had no chief financial officer (CFO) with only a bookkeeper coming on alternate Saturdays.
Easy business, right?
Just buy, and sell.
It would have been that if our early intelligence was correct. What we heard was that the national oil company wanted to replace all the coveralls made with whatever material, with those made of NOMEX.
We thought that it would be similar to how we were selling the Tyvek coveralls. After all, the material was made by the same company – DuPont.
We were really wrong. The games were different. Tyvek – we could simply buy, put a margin/mark up and sell. NOMEX – we had to buy the materials, engage the subcontractors (which had different measurements!), put everything together, work out, and bid for a contract, if win, then sell.
We could have stopped there. Just be in the “buy and sell business”. But we were also already toying with bringing a certain well-known safety shoe brand to manufacture in Malaysia. We were already sourcing for shoe leather.
Though we won the bid to sell the coverall to the national oil company, we were never prepared for the needs and wants of the interested parties at each plant or entity. The specification of the coverall was supposed to be “standard”, but…
Deception
It came to the part where our funding partner (for the contract) played us out that I had to request to the client that we had to surrender the contract. The situation and conditions and the requirements from the multiple entities had become impossible for us to satisfy the contract.
Meanwhile, we managed to supply some equipment to the police. Most of them straight forward except for an order that we received in mid-December and was supposed to deliver by 31st December – when the quoted delivery date was 28th February!
We managed to sort that out and delivered on the stated date – but that’s another story.
In the end, I sold my part of the company. Went back to employment again.
Looking Back
In hindsight, I know now that I needed partners who were resourceful in their specific areas, which were complimentary to mine. That took me eighteen years, to learn, to this day. One of the key things I learned was to look at any opportunity, and then figure out how to work and satisfy it step by step. If I can’t figure it out or learn it, get an expert partner!
Or get a coach.
Even if it was just trampolining, a coach would help me set the pace. A coach would also help me with the right technique. So that I didn’t get burned out in fifteen minutes!
Recognize that as professionals and entrepreneurs, there are areas in which we are experts. And, there are areas in which we need guidance.
