Chapter 98 - People Bring Me Problems
I did not buy the food packaging company.
Immediately.
Important.
I deleted the email again.
Then restored it again.
Then forwarded it to myself with the subject—
DO NOT BUY THIS.
Very effective system.
Three days later, I had a call with the owner.
For information.
Nothing more.
Her name was Mrs. de Leon.
The company supplied food businesses with printed paper bags, greaseproof sheets, food boxes, cups, sleeves, takeaway packaging, and basic branded packaging materials.
Some items they manufactured.
Some they converted from larger stock.
Some they outsourced.
That alone told me the operation was probably more complicated than the sales brochure suggested.
It was.
Of course.
Recurring restaurant accounts.
Bakery chains.
Small cafés.
Food stalls.
A few regional distributors.
Good demand.
Weak planning.
Very inconsistent margins.
Too much money tied up in slow-moving inventory.
Supplier terms badly matched against customer payment terms.
Machines that were useful but underutilized.
One line that looked busy but barely made money.
Another line that barely looked busy and made excellent money.
There.
Again.
A business that was not dead.
Just confused.
I should have stopped listening.
Instead I asked—
"What percentage of your sales is repeat business?"
She answered.
High.
Dangerous.
"How concentrated?"
She answered.
Not terrible.
More dangerous.
"Why sell?"
Long pause.
Then—
"I'm tired."
Fuck.
Again.
Apparently tired owners were becoming my natural predator-prey relationship.
I told myself I was only evaluating.
By then, people had started doing something new around me.
They brought me businesses.
Not jobs.
Not printing orders.
Problems.
At first it was friends of suppliers.
Then accountants.
Then lawyers.
Then people I met through the first acquisition.
Then one bank manager.
Then one client whose uncle owned a struggling warehouse business.
The introductions always sounded similar.
"May kakilala ako. Baka interested ka."
"May company na okay sana pero magulo."
"Owner wants out."
"May machines."
"May clients."
"Sayang."
That last word was dangerous.
Sayang.
Because my brain heard—
Fixable.
I started receiving financial statements from companies I had never heard of.
Small manufacturing.
Distribution.
Packaging.
Print.
Signage.
Logistics.
Food processing.
Some were terrible.
Good.
Easy no.
Some were healthy but overpriced.
Also easy no.
Some had businesses I did not understand.
Even easier no.
Then some—
some had problems I understood immediately.
Those were the dangerous ones.
Rina noticed before I admitted it.
She walked into my office one afternoon while I was reading a proposal for a struggling label-converting business.
"Another one?"
"No."
She looked at the folder.
"That looks like another one."
"I'm reviewing."
"Buying?"
"No."
"Thinking?"
"No."
She stared.
I stared back.
Then—
"Maybe."
She nodded.
There.
Honesty.
Terrible.
By then, I had stopped personally managing daily production.
Not completely.
But enough.
My original business had a proper operations structure.
The first acquired commercial print business had Mang Joel and Beth carrying much more.
The packaging/signage company had Dario running operations and Mina handling sales coordination.
I still reviewed.
Still approved major capital expenses.
Still handled strategy.
Still stepped into serious client issues.
But I was no longer checking every order.
That felt strange.
Good.
Necessary.
Also slightly addictive.
Because now I had time to look at more businesses.
Terrible development.
The third company had an asking price of ?8.9 million.
I did not tell Jane.
Obviously.
I had learned.
The first two had already damaged her perception of money.
I did not need her converting this one into decades of teacher salary and then staring at me like I had committed a crime.
The actual transaction eventually landed lower.
?7.8 million.
Asset-heavy.
Some machinery.
Inventory.
Customer contracts where assignable.
Brand.
Lease rights.
Operating systems.
Selected liabilities only.
Working capital separate.
I still did not tell Jane.
Peace.
The machines were different from my existing ones.
That mattered.
Paper bag forming equipment.
Die-cutting and creasing equipment.
Food-safe paper converting setup.
Cup and sleeve finishing equipment.
Basic flexographic capability for certain runs.
Not massive factory machines.
Not giant industrial lines.
But enough to make the company real manufacturing rather than just reselling.
Current utilization?
Mixed.
Some machines ran heavily.
Some were practically decorative.
My favorite category.
Expensive decorative equipment.
Due diligence was faster now.
Not because I cared less.
Because I had a process.
That was new.
Checklist.
Financial quality.
Working capital.
Client concentration.
Supplier concentration.
Debt.
Tax status.
Labor exposure.
Equipment condition.
Lease.
Maintenance.
Margins by product line.
Customer payment behavior.
Owner dependence.
Second-line managers.
Environmental and safety issues.
Insurance.
Permits.
Inventory quality.
Dead stock.
Recurring revenue.
Capital expenditure needed within two years.
Exit risk.
Integration opportunity.
There.
I had built an acquisition machine before realizing I was building one.
Different kind of machine.
Jane would hate the price of that too.
The company's biggest problem was working capital.
Sales looked healthy.
Cash did not.
Why?
Simple.
They bought raw materials early.
Held too much inventory.
Produced.
Delivered.
Then let some clients pay thirty, sixty, sometimes ninety days later.
Meanwhile suppliers wanted payment sooner.
So the business looked busy while cash stayed trapped inside paper, boxes, cups, and receivables.
Beautiful.
Terrible.
Fixable.
Second problem:
Too many low-volume custom SKUs.
Every client had slightly different dimensions.
Slightly different print.
Slightly different packaging.
Small differences.
Large operational consequence.
Setup time.
Changeovers.
Material leftovers.
Inventory fragments.
Waste.
Third:
Pricing had not properly accounted for minimum efficient run sizes.
So some tiny custom orders looked expensive to customers while still being insufficiently profitable to the company.
Impressive.
Everybody unhappy.
Fourth:
No one had properly decided whether the company was a manufacturer, converter, distributor, or custom packaging studio.
Answer:
Yes.
Bad answer.
I made the offer.
Mrs. de Leon looked at it.
Then at me.
"You're younger than my oldest son."
"That doesn't affect valuation."
She laughed.
Good.
Negotiation went better after that.
The deal closed three months later.
Third acquisition.
I looked at the documents.
Then at the amount.
Then at myself.
This was becoming a personality trait.
Jane found out not through social media.
Worse.
Chloe heard from someone.
Apparently my life now had secondary distribution channels.
We were having dinner when Chloe said—
"So."
I stopped eating.
No.
Jane looked between us.
"What?"
Chloe smiled.
"Apparently somebody bought another company."
Jane slowly turned toward me.
I continued eating.
Nothing to see.
"Lia."
"Hmm?"
"Another?"
I chewed.
Swallowed.
"Yes."
Silence.
Then—
Jane put down her spoon.
"No."
I laughed.
"What?"
"No."
"You asked."
"I don't want to know."
Good.
Growth.
Chloe looked delighted.
"I want to know."
"No."
Jane pointed at her.
"Don't."
Chloe ignored her.
"More or less than four point six?"
I looked at the table.
Jane immediately covered her face.
"OH NO."
"I said nothing."
"You looked down!"
"I was looking at food."
Chloe leaned forward.
"More."
"No."
"Six?"
Nothing.
Jane peeked through her fingers.
"Please stop."
"Seven?"
I reached for water.
Mistake.
Chloe gasped.
Jane made a wounded sound.
I said—
"This is exactly why I don't disclose numbers."
"Seven million?" Chloe asked.
No answer.
"More than seven?"
No answer.
Jane stood up halfway.
"I'm leaving."
"Sit down."
"I don't want Jane-years."
"We're not doing Jane-years."
Chloe already had her phone.
"Chloe."
"No."
She paused.
Then looked at me.
"Eight?"
I said nothing.
Wrong.
Very wrong.
Jane stared.
"Lia."
I took a drink.
She looked genuinely disturbed now.
"Are you buying companies for fun?"
"No."
Chloe whispered—
"Maybe."
I pointed at her.
"No."
Then Jane said—
"Monster."
Again.
"That's getting old."
"Economic monster."
"Better."
"Scary."
"Also repetitive."
She sat back down.
Then looked at me differently again.
Not just old friend with successful business.
Something larger.
I did not like it.
Not because I wanted her admiration.
Because I could feel the distance money created if you let it.
So I reached over and stole one of her fries.
She slapped my hand.
Good.
Hierarchy corrected.
The third turnaround was different.
I did not personally redesign everything.
That surprised me.
Actually—
it scared me slightly.
Because I could have.
I understood enough.
I could have spent six months living inside the operation.
Instead, I built a team.
I brought in a finance manager with manufacturing experience.
A production planner.
Promoted a long-time supervisor who already understood the floor.
Hired someone specifically for procurement and material planning.
Then I gave them targets.
Cash conversion.
Inventory days.
Waste.
On-time delivery.
Gross margin by product family.
Machine utilization.
Receivable aging.
Customer concentration.
I did not tell them exactly how to hit every number.
That was new.
Very new.
The first major change was inventory.
Dead stock sold.
Odd materials consumed where possible.
Low-volume custom substrates stopped being purchased without committed order volume.