Ten Reflections On Entrepreneurial Failure

Reflection one: growth strategy is wrong. Small businesses are big businesses. They attack all sides, invest on all sides, and fish in big nets.

Red Sorghum chose a fast growing national chain mode from the beginning.

The right way is to concentrate the limited resources in one area at the beginning stage and expand the new area after maturity.

Chain industry is full of risks, not bigger, faster and better, and too fast is the source of failure.

Two: Reflection on financial management is less important than knowing nothing.

Use self capital and long term liabilities as fixed assets and long-term investments whenever possible.

Most of our fixed assets come from current liabilities and short-term loans.

In addition, the four sides investment has led to ineffective operation of enterprises.

Reflection three: no profit management system is established, all kinds of resources can not be effectively and co-ordinated, resulting in insufficient financial resources. The Red Sorghum bar is thriving in a year. At this time, some experts say that the first three years of red sorghum can not profit first, expand rapidly, make enterprises bigger and capital bigger, do not be afraid of liabilities, build up momentum and make brands.

Then sell shares and become listed companies. This is called "zero profit" operation.

In my opinion, "zero profit" management is not suitable for the enterprises in the initial stage.

We are small businesses, primary, lack of "Kung Fu", that is, the ability to resist risks.

Reflection four: when funds are not prepared, projects start easily and cause financial difficulties. Investment experts say, "don't wait for money to invest in business. There is no shortage of money for viable investment projects."

When I decided to invest in red sorghum, I didn't have money at hand. Because of the market, the first store took half a year to reclaim it.

When deciding to invest in Wangfujing store in Beijing, it has only 100 thousand cash on hand.

So we began to expand our minds: when we were short of funds, we put forward a national chain development strategy to invest everywhere.

When the shop opened, there was a burden on it.

Reflection five: excessive pursuit of "wharf effect", put more money into the land, as a result, the owners are willing to work for a fast food to invest in the land, but they must do their best.

I would rather say that you are stingy, and that no profit should be removed.

Reflection six: overextending the role of brand, committing a brand name "crash theory" and "Wan Da Da" error.

Even famous brand enterprises, brand is not everything.

Business is business. We need to break through one bottleneck after another and grow steadily.

Can not rely on the legendary news hype, quickly become a "brand", and then expand blindly with the brand, join the chain.

Behind the famous brand is Kung Fu.

Seven: early denying the chef's "craft", ignoring the role of chefs in Chinese fast food, the result is lack of "handicraft" operation, and lack of necessary machinery and equipment. The quality of products decreases and sales decline.

Chinese fast food is "moderately industrialized".

Without industrialization, there is no way out. We will lose our advantage if we lose our craft.

Eight: ignore product development and product mix, and do not deal with "multi" and "less". The specialization of Chinese food can not meet the needs, diversification is not conducive to chain.

We should moderately diversify.

Attach importance to product research and development, do not think that China is a great food country, and the variety is so rich that it ignores product development.

Nine: no rational development of the structure, blind development, the pursuit of speed, one or two success, it is mistaken that this is a successful system.

For the chain industry, the structure determines the size and number of stores.

Ten: not taking staff training as a long-term and coherent business strategy.

The training of enterprises is insufficient, the management level and personnel quality are not high, and there is no development motivation.

In a sense, the success of McDonald's is not the success of the hamburger, but the success of the training system.

McDonald's has the idea that the main reason for brain drain is the lack of training.

Chinese fast food is generally inadequate in store management and personnel training.