Eventually after few hits and misses we manage to land a RM5million infrastructure works, a small parcel from a multi billion upgrading works in Seremban. The local company setup was between the Taiwanese and a mutual lawyer friend. (I decided to trust them and not to be in the company due to my ongoing lawsuit, which is another tale for another day)
The company bank account is a joint signature between the lawyer and taiwanese, no one can take any money out from the bank without the consent of either party. There was no money in the company account, expenses paid so far during business development time was through a private account held by the Taiwanese. With the Rm5mil job in hand, we worked out a execution plan and decided we need at least 10% (Rm500k) to run the project. It will require us to manage the project very carefully to run on a 10% cashflow, with no track record, many suppliers will ask for cash term or COD, labour subcontractor will be asking for prompt 2 weeks payment to cover their wages whilst we have a 30 days term with our client. (Essentially 30 days terms mean 60 days as you spend RM500k first month, you invoice, and by the time you receive your payment 30 days later you would have spent another 500k.)
I had full confidence we can get it through by maintaining good relationship with subcons and suppliers, not to mention prompt payment from client is essential. I have also full confidence with the Taiwanese at the point of time from the several occasions meeting his partner from Taiwan, reading their company profile and track record and even had family dinners with them when his father was i town. (His father was an investor in the parent company) The only thing I did not do was actually going to Taiwan to visit their office and sites, something I actually do to my own subcontractors before they come on board the projects I handled.
Problem surface several days after we receive the Letter of award from our client. While busy working on the execution plan and getting subcons and suppliers to quote for our job, I did not forget to pursue the Tawiwanese to bring in our RM500k lifeline. I knew without it we can't even stand one month of the project.
He looked at me and told me :I was thinking we should get a strong subcon to total subcontract the job. (Classic situation of what I meant more often than not, internal peer pressure or conflict causes more harm than external problems.)
Shit! My heart dropped, either he does not have the money or he has no intention to bring in any investment from day one. I tried to reason with him on 2 fronts, we got the project on strength of that we have strong financial backup from a big Taiwanese company and the rates in our contract has marginal profit as we wanted track record.
If we total sub, first I loose credit in fornt of the client who trusted us during our pitch and I do not believe we will be able to find a credible subcon to total sub at the budget we were working on. They only way we will be able to make money was to manage the job ourselves.
What do you think I should do at the time? He was dating my friend at that time and I thought we could reason with him through his girlfriend, failed, the girl, blinded by love, took his side although we ahve known each other for almost 20 years and only knew the Taiwanese though me for 6 months. The reason he gave his gf was that he was worried that he will loose control of the money if he bring it into malaysia. WTF?! I was devastated not because only no we are seeing the true colour of the Taiwanese but how gullible my friend was taking in the lame excuse. The Taiwanese is majority owner of the company and company bank account is controlled by him, he can just open another bank account solely require his signature if that was his concern.
What will you do in such a situation?
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