Written by Tay Boon Suat Illustrated by Wing Fee 陶朱公

Written by Tay Boon Suat Illustrated by Wing Fee 陶朱公

About the Author Tay Boon Suat is the founder of ES Management Consultancy in Singapore. He has a strong career track in banking and consultancy. 1975: Graduated from the then Nanyang University with a Bachelor s Degree (Honours) in Economics. 1977: Joined the Japan Trade Centre, JETRO, as a Regional Economics Research Executive. 1981-2001: Bank Manager at United Overseas Bank Group (UOB), and three years in Tokyo as a Bank Representative. After leaving UOB, he joined SMI Consulting Institution as a consultant. Since 1994, he has been involved with the training of bank managers and other high-ranking officials from China, and has specialised in banking and financial consultancy. His extensive experience in corporate banking and business administration has made him a highly sought after speaker at business seminars. He has given lectures at the following institutes: Nanyang Technological University (NTU) Institute of Banking and Finance (IBF) Singapore Institute of Management (SIM) Civil Service College Export Institute of Singapore Singapore Chinese Chamber of Commerce and Industry (SCCCI) Between 2005 and 2010, he was twice invited to join the IRAS Taxpayer Feedback Panel for whom he had rendered voluntary service. He has also been invited to participate in the national bicultural movement, namely the Bicultural Taskforce Social Bonding Workshop, as a member. Tay also writes frequently for local newspapers and magazines on the subject of SMEs. He can be contacted at boonsuat@gmail.com or 96512374 (mobile).

Author s Notes This is a book on business management, intended for those who aspire to start their own enterprise but are yet unable to pursue a specialised education in business. This book will help ensure that you are equipped to launch out into business on your own. Tao Zhu Gong lived more than two thousand years ago, yet his golden rules remain sound and relevant till this day. This book aims to expound on the ancient precept and make application to modern business practice. By way of its foundation in Eastern philosophy and its application in Western practice, I hope to share with readers a bicultural approach to business management. Even though technology has drastically changed our world, human nature remains the same. Companies still err on account of three human vices: greed, hate and delusion. To achieve success, small and medium enterprise (SME) owners must be wary of the human propensity. It is no wonder that Tao Zhu Gong repeatedly asserts that we have to conduct ourselves well before we think about managing others. Rules such as to know people, to utilise people, to seize opportunities and to lead by example have to do with understanding and harnessing human nature. This is indisputably the essence of modern business management, highlighted in both pedagogy and practice. I hope that readers will use this book as their guide to business management and enjoy corporate success. I would like to express my gratitude to these individuals for making this publication possible: The publisher, Ms Lim Li Kok, of Asiapac Books Pte Ltd. The associates and friends featured in the book: Tan Kim Seng, Kang Puay Seng, Chia Weng Kaye, Hoon Thing Leong, Sin Leong, Annie Gan, Koh Chuan Piow, Kek-Goh Peh Huang, Huang Jinyin, Jeff Tang, Sze Hong Chew, Gui Kim Young, Gan Han Neo, Kao Sing Chyun, Lim Tow Seng, Boon Yian, and Soh Eng.

Contents Prologue 2 Tao Zhu Gong s 12 Business Rules Modern Application Rule 1 The ability to know people 10 Rule 2 The ability to handle people 18 Rule 3 The ability to focus on the business 30 Rule 4 The ability to organise 42 Rule 5 The ability to be flexible and agile 52 Rule 6 The ability to recover debts 64 Rule 7 The ability to deploy 74 Rule 8 The ability to articulate 84 Rule 9 The ability to excel in purchasing 94 Rule 10 The ability to seize opportunities 104 Rule 11 The ability to lead by example 112 Rule 12 The ability to foresee 118

Case Studies Interviews with prominent SME figures conducted by Tay Boon Suat SME Owners 1 Tan Kim Seng (KS Energy) 126 2 Hoon Thing Leong (Kim San Leng) 130 3 Chia Weng Kaye (Chuen Cheong Food Industries) 134 4 Kang Puay Seng (Mr Bean) 138 5 Sin Leong (Red Star Restaurant) 145 6 Annie Gan (Jian Huang Construction) 151 7 Koh Chuan Piow (Lian Hock Hardware) 156 8 Ang Kim Seng (ABC Steel) 161 9 Kek-Goh Peh Huang (Hiap Chuan Hardware) 165 10 Huang Jinyin (Rainbow Aquarium Pet Center) 168 11 Jeff Tang (iflow) 171 SME Professionals 1 Sze Hong Chew (Business Consultant) 174 2 Gui Kim Young (Accountant) 178 3 Gan Han Neo (Former Bank Manager) 182 4 Kao Sing Chyun (Retired Bank Manager) 186 5 Lim Tow Seng (Senior Journalist) 190 Checklist for Entrepreneurs 195

Prologue Master Strategist Tao Zhu Gong ( 陶朱公 ), or Fan Li ( 范蠡 ), as he was initially known, was a master strategist during the Warring States Period in China. Despite coming from a poor family, he was extremely talented as a child, and grew familiar with the classics from a young age. Gou Jian ( 勾践 ), the King of Yue ( 越国 ), held Fan Li in high regard as his military adviser. After losing a war against Wu ( 吴国 ), Fan Li suggested that Gou Jian surrender and wait for an opportunity to take revenge instead of fighting further. Both of them were sent to Wu to work as slaves. Even though the King of Wu noticed Fan Li s talent and offered to recruit him as an advisor, he refused out of loyalty to Yue, an act that touched Gou Jian. After spending three years as slaves, the two men went back to their country, and began their preparation for revenge. In order to not forget the humiliation of his slavery and plan for revenge, Gou Jian tasted a piece of bitter gall every day. Fan Li devised a full-pronged strategy for Yue s revenge. He suggested mobilising a nation of soldiers, recruiting talents, and even came up with a beauty trap, deploying Xishi ( 西施 ) (one of the Four Great Beauties of China) to distract the King of Wu. After 10 years of gathering, and 10 years of training, Yue finally defeated Wu in 473 BC, and Gou Jian regained his pride. Even though Fan Li aided Gou Jian in the recovery of Yue, he knew that Gou Jian was not a man that could be trusted in prosperous times. Fan Li left the state of Yue quietly after their victory, and began his life as a businessman. 2

Pioneer in Business Fan Li first settled down along the northern coast of Qi ( 齐 ), and named himself Leather Wine Bag ( 鸱夷子皮 ). He made a living from farming by the sea, and in 10 years, amassed a great fortune. His name spread throughout the state of Qi, and eventually reached the King of Qi, who invited him to serve the state. Not desiring another career in politics, Chiyi Zipi distributed his fortune to his neighbours and friends, and quickly left Qi with his family again. This time, he ended up in Shandong Dingtao ( 山东定陶 ). He changed his name to Zhu Gong, but everyone called him Tao Zhu Gong. At that time, Dingtao was located at an excellent area that was known as the centre of the world s trade. Making the best of his location, Tao Zhu Gong engaged in trade, agriculture and animal husbandry. Within a few years, he regained his fortune and became a wealthy merchant. Yet, he was never greedy, and continued to be generous with people in need. He became the pioneer role model of Chinese business people, and still remains revered as a God of Wealth. Tao Zhu Gong was not only business-minded, but was also a keen observer of life. His vast knowledge of astronomy, geography, the eight trigrams and five elements helped to develop his astute judgment in the trading of goods. He often said, One must be aware of a good s supply and demand in order to discern its value. He found that there was always a limit to the rise and fall of the value of goods. The price of a good will rise again after hitting its lowest point. He advocated holding goods when their value is low, as if one was collecting gems. When their value increases, sell the goods without any hesitation, as if one was getting rid of waste. Tao Zhu Gong also had extensive knowledge of seasonal and weather variations. There is an old Chinese saying that goes, Harvest in every six years, drought in every six years, famine in every 12 years. Tao used this seasonal pattern to his advantage by purchasing plenty during the good years and selling the goods at a profit during the bad years. 3

Tao Zhu Gong s financial acumen demonstrates that we can be successful in business once we master the law of supply and demand. He had articulated this law two thousand years earlier than Western economists, proving that he had great foresight and wisdom. The Tao Zhu Gong strategies that we know today cannot be fully attributed to Tao himself. They are actually the result of a collective effort by early Chinese traders active in Southeast Asia. Nonetheless, these strategies are full of wisdom and will definitely help small and medium enterprises (SMEs). New entrepreneurs will succeed in business if they can learn and apply Tao Zhu Gong s principles. 4

12 Golden Rules RULE 1 The Ability To Know People Knowing the character of people will ensure that your business goes smoothly. RULE 2 The Ability To Handle People Be polite to attract more customers. RULE 3 The Ability To Focus On The Business Do not abandon the old in favour of the new. RULE 4 The Ability To Organise A neat and tidy storefront will draw customers into the shop. RULE 5 The Ability To Be Flexible and Agile Indecision will lead to futility. RULE 6 The Ability To Recover Debts Diligence and persistence will ensure that your company stands to gain. 6

RULE 7 The Ability To Deploy Assigning the right person to the task will ensure efficiency. RULE 8 The Ability To Articulate Effective communication will ensure that business is smooth and the foolish enlightened. RULE 9 The Ability To Excel In Purchasing Be meticulous in purchasing to reduce losses. RULE 10 The Ability To Seize Opportunities Sell or buy at appropriate times to succeed in business. RULE 11 The Ability To Lead By Example Leading by an example of discipline will foster solidarity and camaraderie. RULE 12 The Ability To Foresee Act according to the situation. 7

Tao Zhu Gong in the Modern World The 12 business disciplines of Tao Zhu Gong have covered the salient features of modern management theories. 1. Business leaders need to have a keen eye for discovering talents (to know people). 2. Employees with customer service and PR skills are business assets (to handle people). 3. Established brands have dedicated generations of effort to developing their core business (to focus on the business). 4. Companies need to have a systematic internal structure (to organise). 5. During a crisis, businesses that are able to cope and handle their problems swiftly and efficiently will be the winners (to be agile and flexible). 6. Debts should be settled on time or they will become a financial burden to the company (to collect debts). 7. Successful businesses are good at assigning talents to the department that will maximise their potential (to deploy). 8

8. The most common cause of dispute within a company is communication breakdown, so enhancing the oral and writing skills of employees can help reduce the friction (to articulate). 9. Low-priced and quality goods are essential, but an effective management of the supply chain is vital for purchasing (to excel in purchasing). 10. Grab hold of favourable times, and always seek to create your own opportunities instead of waiting for them (to seize opportunities). 11. A leader should uphold high standards in order to inspire the same standard among employees (to lead by example). 12. Set long-term business goals based on current market and global trends (to foresee). 9