Why do so many people fail to start a business?
The most likely reason is that these people have forgotten the essence of business and don’t know how to do business!
Starting a business is, to a large extent, a business!
1. Doing business is about making money!
l This sentence sounds very tacky, but many entrepreneurs really forget this!
l Why do many entrepreneurs start their own businesses? On the surface, it seems to be to make money and better improve the living conditions of myself and my family. However, the reality is: many entrepreneurs start a business for the sake of starting a business. Because I can't find a job, or I'm fighting with my boss, or I can't bear the hardship, I always think about getting rich overnight, always thinking about fine clothes and fine food, beautiful women, luxury cars and villas as companions, and I am greedy for my pitiful and pathetic "vanity, Love face”! I thought that if I start a business, I will be the boss, I will be famous, I will have face, and I will be able to make a lot of money...
l The idea is great, but the reality is cruel!
l Starting a business or doing business is all about making money, not for fame, face, or being praised!
l Starting a business or doing business is not for listing, financing, or loans. These are all abstract and imaginary!
l The purpose of starting a business and doing business is to make money! Make money in a low profile and make a fortune in silence. Just like the Yangtze River Delta and the Pearl River Delta, there are countless wealthy businessmen who are inconspicuous and have little reputation, but they make a lot of money!
2. When doing business, you have to settle accounts!
l All businessmen are shrewd in calculating accounts!
l All businessmen must carefully calculate their input and output.
l To give the simplest example, many people choose to join a chain business! However, more than 90% of these entrepreneurs have not carefully calculated the input-output!
l For example, how much is the investment? Franchise fees, management fees, rent fees, decoration fees, purchasing fees, plus labor costs (including social security provident fund , other welfare subsidies, clothing fees, training fees, etc.), daily operating costs, tax costs... If If these input costs are spread over an operating cycle of 2-3 years, what are the monthly operating expenses? How much does
l earn? How long is the renovation period? After the renovation is completed, what is the average income in the first 3 months and the first 6 months? What is the income in the first year? What's the profit? Will it cover operating expenses? What is the expected revenue in the second year? Is there a downward trend in the industry? Has the industry finally reached its peak? ...
l All entrepreneurs and businessmen need to carefully calculate their input and output! Be objective and accurate! When starting a business, you invest real money, but the income is unknown and uncertain, and there is a high probability that the actual income will be far less than the expected income!
l includes many entrepreneurs who are engaged in technological innovation companies, so the time cost and labor cost of early technology research and development are very huge, and they also need to be carefully calculated!
l All entrepreneurs and businessmen cannot settle accounts, so don’t start a business!
3. To have income, you must have cash flow !
l Anyone who does business knows that the most important thing is to have continuous income and continuous cash flow. Without cash flow, it is really "sitting on the mountain with nothing", which is fatal!
l Entrepreneurs and businessmen must focus on business and make every effort to collect money!
l Cash flow is not an advance payment, a credit account, or a debt due. Entrepreneurs should collect more cash, "having money in hand means not panicking".
l Entrepreneurs and businessmen must become "salespeople". No matter whether we were in technology, management, or other fields, as long as we choose to start a business, we must personally connect with customers, perform performance, and collect money.
l Entrepreneurs should not think blindly every day. Sitting in the office and working behind closed doors, the product will become a hit when it comes out. This is unrealistic!
l In fact, we have seen too many entrepreneurs who stay away from the first-line market, are afraid of negotiating business with customers and cooperative merchants, and lick the butts of banks and investment institutions every day, thinking that they will succeed in starting a business after getting loans and financing. Employees painted cakes, made PPTs for the outside world, and had big dreams. In the end, they lost miserably. When I look back and sum up the experience, I said, "I tried my best, but the chances were a little bit worse." FT, what a load of nonsense!
4. The essence of doing business is "buy low and sell high"!
l Such a simple truth, but too many entrepreneurs prefer to "think in the opposite direction" and "go against the grain"!
l What many entrepreneurs never forget is “buy high and sell low”!
l Typical examples include franchise chains. It seems that the products or services they sell are very affordable, but they forget to calculate the accounts and allocate the costs of various franchise chains! Therefore, once these entrepreneurs allocate the various investment costs of the franchise chain, they will find that the price of the products or services they sell is much higher than the normal price in the market!
l Many start-up companies that engage in technological innovation follow the example of large Internet companies to recruit people with high salaries and invest heavily. However, the final product has too few customer groups, which makes their product costs very high. There are very few customers who can accept the high price, which ultimately creates a vicious situation. The cycle leads to the company’s capital chain being broken and the business failing! Technological innovation startups either target a niche group from the beginning, but have limited growth; they either minimize their development and usage costs from the beginning, or they find large investments and achieve economies of scale from the beginning. The shared cost is close to or even lower than the normal market cost!
l When doing business, we have to sell products; if we want to sell products, customers must have an acceptable price range. Entrepreneurs and businessmen, no matter what time, always have to "buy low and sell high", so that they can make money and the company can survive!
l "Buy low, sell high", this "buying" price, in addition to the price we purchase finished products or raw materials, also includes our various operating cost sharing (for example, rent and decoration, office expenses, labor costs, franchise fees and management fees Deposit, loan financing interest, taxes, depreciation...), as well as the company's reasonable profit part!
5. Entrepreneurship, return to the essence of doing business!
l Starting a business must start from a young age!
l To start a business, you can start with self-media, or trading or business.
l To do self-media, what we need to pay is our time cost and our creative output. To a certain extent, it is "no capital and profit" (regardless of our time cost and network, electricity bills, etc.). This is typical "Buy low, sell high"!
l When doing business, whether it is domestic e-commerce or cross-border e-commerce (cross-border trade), we do not need to have a factory or store goods. We only need to contact domestic and foreign customers at the same time. Supplier, the difference in price is our profit!
l Starting a business, the simpler, the better! Calculate the accounts, make them clear, then do your best to achieve good results, collect payments well, "buy low, sell high", it's that simple!
Xiongxiao Entrepreneurship Consulting: Focus on first-time entrepreneurship consulting and novice entrepreneurship consulting. More than 20 years of entrepreneurial practice, serial entrepreneur!
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