•  | Nov 13, 2013 09:44 AM

    When his First Venture Bled, He Expanded

    TRENDS: EIGHT years ago, Tan Meng Wei and a couple of partners shelled out $80,000 to buy a childcare centre. Brave man, foolish decision, thought many of his relatives and friends. Why was he taking the plunge again when the first centre he bought two years earlier had saddled him with a host of problems and nearly bled him dry?

    The former banking executive says he has his optimistic nature to thank.

    "I try not to worry too much. I believed we could not stop at one. We needed volume. Two was infinitely better than one, but obviously, two was not the way to go either," he says.

    His tenacity served him well.

    Today, the Star Learners Group has 11 childcare centres all over the island, and an annual revenue of about $10 million.

    Mr Tan Meng Wei, 41, managing director of Star Learners Group, with children at its Bishan branch. The group’s motto is to build “confident, creative children with character” just like his own two sons and two daughters. ST PHOTO: CAROLINE CHIA

    But the chain's effervescent managing director is not done yet. "We are looking to triple our size," he says.

    The 41-year-old will probably achieve that by going about things his own way, with a dash of derring-do and a heap of faith.

    Garrulous and energetic, the younger of two children reckons he inherited his appetite for risk and his penchant for the unconventional from his mother.

    His mother was the eldest of eight children and never had the chance to further her studies beyond the O levels. She worked as a clerk with the then Registry of Vehicles and helped to put her siblings through school. Her brothers and sisters did a lot better; one became a doctor, another an architect, and yet another, a senior executive with an oil giant.

    "But when my mother was in her mid-40s, she decided on a drastic career change. She got her driving licence and her remisier's licence and is still working as a stockbroker today," says Mr Tan, whose father is a retired teacher.

    The family lived in a four-room Housing Board flat in Holland Village and he and his older sister were taught to be independent from a very young age.

    With a big grin, he says: "Both our parents had to work and we were what you would call latchkey kids but in those days, it was not a bad word," says the former Anglo-Chinese School student.

    One of the school's top chess players, he gave his folks no grief over his studies and excelled in sports, representing ACS in water polo.

    After the O levels, he went to National Junior College. As he was not sure what he wanted to be, he decided to cover all bases, doing physics, mathematics, literature and economics.

    "The teacher gave me the master timetable and said, 'You do it if you can fit it all in'."

    He did.

    "Technically, that combination could qualify me for any university course except medicine," he says.

    Sheepishly, he lets on that he spent more time on the sports field and squash courts than on his schoolwork.

    "I skipped half my classes but because NJC students were so well-behaved, the teachers didn't really come after you. Then again, because everybody was studying, you also had to make sure you could keep up."

    He failed to get into the law faculty at the National University of Singapore, and settled for accountancy at Nanyang Technological University instead.

    "I actually wanted to be a writer but everybody told me I wouldn't make any money," he says with a sigh.

    At NTU, he was a live-in student whose love for sports and hostel activities got in the way of his studies; he failed several subjects including consolidated accounting and business law. He decided to move back home in his third year to avoid being distracted by hostel activities.

    He had hoped to join Citibank's much coveted management programme after graduation. It attracted 1,500 applications, from whom 160 were shortlisted and 20 finally accepted.

    "I made the shortlist, attended three interviews but didn't hear from them after that."

    He landed an auditing job with Coopers & Lybrand instead but on a hunch, decided to call up Citibank to ask why he had not heard from them.

    He was told he did not make the cut, but was asked if he would be keen on a position handling a regional financial product.

    Three more interviews ensued, the last with Mr Piyush Gupta, now chief executive of DBS Group.

    "I was offered the job but I told them I would only accept it if I could be part of the management programme. They agreed," says Mr Tan.

    He quit his auditing job after just three weeks and moved to Citi, where he spent four years handling transactional and other complicated financial products before he accepted an offer from another bank - which came with a twofold pay increase.

    He was serving his notice at Citi when a friend told him that the Boston Consulting Group (BCG) was looking for management consultants.

    "I went for an interview. BCG interviews are very different, they get you to solve a case study and I really loved the whole exercise because it was very stimulating."

    Two more interviews followed. By the time BCG offered him the job, he was six days into his new job at the new bank.

    "Some people had to jump through hoops to give me the package I wanted at the new bank, but I couldn't pass up the BCG offer," he says.

    He spent a tough but stimulating four years at the management consultancy.

    "It's a tough job and the stress levels are high and involve late nights and long hours. One guy who joined the same time as I did left after just three weeks," he says. "They also have an up or out policy – if you're not promoted, you will be told to go."

    He thrived on the adrenaline buzz he got from working on different cases, and liaising with chief executives and heads of strategy in different industries in the region.

    But the work and routine – which involved flying out of Singapore on Monday mornings and catching the last flight home on Friday evenings – took their toll.

    By then, he had married his university sweetheart, and their son was three years old.

    "One day when I was home, my wife asked him to tell me that dinner is ready. He picked up the phone. His idea of talking to me was always on the phone. That's when I knew I had to leave BCG," he says.

    His next stop was Standard Chartered Bank (StanChart) where he first joined its central consulting team and later became its head of strategy for private banking.

    He acquitted himself very well in the job but was grappling with some major headaches privately.

    While at BCG, he had plonked $100,000 of his savings – which he had set aside for his MBA – to buy the Star Learners childcare centre in Eunos.

    "The whole point of getting an MBA was to either join management consulting or investment banking. I was already a management consultant so I didn't see the point," he says.

    Moreover, he felt that the opportunity cost of taking at least a year off and uprooting his family to the United States was high.

    He was 30 when the offer to buy the childcare centre came in 2002. He roped in a partner and decided to go for it.

    "I adore kids. And I thought to myself, 'This is going to be simple, it is self-running, the money will just roll in and I just need to pay the teachers.' I treated it like a financial investment," he says ruefully.

    It turned out to be a deal from hell.

    Only after he had bought it did he discover that income taxes and staff's Central Provident Fund contributions had not been paid. The centre's supervisor also decided to quit, taking along a third of the pupils with her. To make things worse, Sars happened in 2003.

    Mr Tan sighs when asked why a trained management consultant like him did not unearth the management issues while doing his due diligence.

    "It was not so simple. I also tend to take people at face value. You can never tell unless you're in it. For instance, I never thought Sars would happen and that it would make enrolment drop so much. I also never thought about what to do if enrolment dropped," he says.

    The centre started haemorrhaging.

    "At its worst, we were losing $12,000 a month," recalls Mr Tan, who often used his pay cheque to pay the centre's eight staff and operation expenses.

    He counts himself fortunate to have been able to dig into his savings, thanks to astute property investments he had made earlier. His wife had by then given up teaching to become a housewife.

    "My colleagues said I'd been gung-ho going into properties but I think I took careful risks. I bought what could be rented out and in areas where tenant flow was consistent. I had very good yields, and in a couple of cases, was offered significant amounts when the property market went hot," says Mr Tan, who bought apartments in areas like River Valley and Havelock.

    It took a good two years before a supervisor he hired helped to turn the childcare centre around.

    But even before it was in the black, he bought his second outlet in Simei.

    He was emboldened not just by the shrinking losses of the first centre, but by the hard lessons he had learnt.

    "The biggest takeaway was to not buy over a company but buy over a business. If you buy a company, whatever problems come with it become your problems too," he says.

    "When you buy over the business, you just need to change the brand. With the second centre, we started making a little money from day one."

    Over the next five years, he held his job at StanChart and acquired two more childcare centres.

    In 2010, he decided to quit his bank job.

    "There were no push factors. People told me I was crazy to give up a good salary but I was spending 10 hours in the office. I wanted to spend those 10 hours with my kids instead, send them to and fetch them from school, be there for them," says the father of four children aged between four and 12.

    He remembers the day he made up his mind.

    "It was a Saturday night, just before a Liverpool and Manchester City match. I had texted my resignation to my boss, saved it to draft on my phone. But as the match was about to begin, I said: 'What the heck, might as well send lah'," says the Liverpool fan, adding that his team won the match 3-0.

    A colleague decided to quit and join him in building Star Learners. They streamlined operations and appointed staff to take care of human resources, marketing and finance.

    "My main takeaway from my corporate days is that you have to understand your strengths and use them well. And where you have weaknesses, you get other people to fill the gap.

    "We don't have a target as to how many centres we want by when. But if and when we can gather the resources, we will consider it."

    Over the last three years, the Star Learners Group – which now has six shareholders – bought seven more centres. It now employs 180 staff and has a total enrolment of 1,000 pre-schoolers.

    The group's motto is to build "confident, creative children with character" just like his own two sons and two daughters. The three older ones are either chess champions and/or soccer players.

    Mr Tan plays an active role in mapping out programmes for the group. A firm believer that sports – with its emphasis on training, teamwork and discipline – plays a big part in shaping character, he imported a multiple sports programme from Australia.

    "The programme exposes children to a different sport every two weeks," he says.

    Inspired by the song in the musical Les Miserable, he also started a Castle On A Cloud programme which offers all single mothers a monthly $200 rebate off their child's fees. In the Cameron Mackintosh musical, the song is sung by Cossette, an orphan girl.

    Businessman Willy Chua, 40, describes his friend of 20 years as a sure-footed man.

    "He knows what he wants and what he has to do to achieve it. When something doesn't work out, he may backtrack to correct his mistakes, but he will not abandon it."

    Play the corporate game

    Singaporeans overemphasise meritocracy and don't play the corporate game well. I had an Indian colleague who would always go up to chat with directors at dinners and meetings. Because he was engaging intellectually, he got noticed and promoted faster. Many Singaporeans said he was sucking up to bosses but what is wrong with what he did? He was the one climbing while the Singaporeans were bitching.
    -- MR TAN MENG WEI, on Singaporeans and the corporate game.

    Respect kids but they are not gods

    We respect children and speak to them at eye level but we don't treat them like gods. Some parents treat their children like gods; you are not supposed to scold them or raise your voice even when they have done wrong. What absolute rubbish!

    -- MR TAN on how to handle children

    The Straits Times
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