Ten Reflections On Failure Of Entrepreneurship

At present, it is a good time to start a business.

The policy is relaxed, the public opinion is relaxed, the opportunity is leading the summons unprecedentedly, so many university students are grinding their knife.

Nowadays, the media are always doing positive publicity, which is very important to encourage college students to start their own businesses, solve our employment problems and improve the risk awareness and innovation ability of the Chinese nation.

For example, in a media report, many private enterprises in China are like Zong Qinghou of Wahaha, Feng Gensheng of youth treasure, Hu Cunzhong of deli, Nan Cunhui of CHINT, and so on.

They haven't read many books before, but they can lead their enterprises to the dominant position of their respective industries one by one.

They rely on their courage and

However, no one can see that more than 95% of the entrepreneurs end up in failure, and some are even bankrupt and their families are destroyed. These cases of blood and tears are rarely reported in the media.

Therefore, the author proposes to reflect on the failure of entrepreneurship, and remind entrepreneurs that they are more adventures on the road to entrepreneurship.

Reflection one: growth strategy error

Small businesses, when big businesses operate, attack all sides, invest on all sides, and catch 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.

Reflection two: knowledge of financial management is more harmful than ignorance.

There is a "golden rule" in financial management: short term loans from banks can not be used for long-term investment in enterprises.

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-ordinate, resulting in insufficient financial resources.

Red Sorghum bars thrive in a year, when experts say that the first three years of red sorghum can not be profitable, expand rapidly, make enterprises bigger and capital bigger. Don't be afraid of debt, they need to be aggressive 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, the project is easily launched, resulting in 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.

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Reflection five: excessive pursuit of "wharf effect", putting more money on land, resulting in work for owners.

To make fast food, you must invest in the land, but do your best.

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

Reflection six: overextending the role of brand and committing a brand name "crash theory" and "omnipotent" error

Famous brands can not be speeded up, and famous brands are the Peugeot of quality, management and efficiency.

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.

Reflection seven: premature denial of the chef's "craft", ignoring the role of chefs in Chinese fast food.

The result is the lack of "handicraft" operation, and the 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.

Reflection eight: ignoring product development and product mix, not dealing with "more" and "less".

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.

Reflection nine: without establishing a reasonable structure, we will blindly develop and pursue speed.

The one or two success is mistaken for a successful system.

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

Reflection ten: employee training is not regarded as a long-term and coherent business strategy.

Enterprise training is insufficient, management level and personnel quality is not high, lack of 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 a concept: the main reason for the brain drain is the lack of training.

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