Three Main Reasons For The Failure Of Chinese Style Entrepreneurship

Blind entrepreneurship, lack of contract spirit and excessive reliance on human connections are the three main reasons for the failure of Chinese style entrepreneurship.

Only 20 to 30 enterprises in every 100 enterprises can survive 1 years, while those who have been through 3 years only account for 30% of them. As for the popular college students, the failure rate of them is as high as 99%.

A survey shows that only 20 to 30 enterprises in every 100 enterprises can survive 1 years, while those who have been through 3 years only account for 30% of them. As for today's popular college students, their failure rate is as high as 99%.

Starting from scratch, entrepreneurs need to do fund allocation and scheduling, talent recruitment, marketing strategy formulation, management and control, and face changes from competition and market. Therefore, any problem in any link is fatal to vulnerable entrepreneurial enterprises.

40 years old is not too late to start a business. Young people should not blindly start their own businesses. First, they must accumulate certain professional experience and business operation experience, and have a certain amount of capital, customer resources or a unique business model before they start looking for a business. The chances of failure will be greatly reduced.

At the age of 20, Chen Bifu became a Ogilvy Inc in Taiwan. From the investigator, he became a general manager of Beijing's Ogilvy, which spanned almost 20 years and accumulated rich marketing experience and customer relationship.

Until the age of 40, when Chen Bifu felt that he had already been able to start his own business, he gave up the position of general manager of Ogilvy general in Beijing and came out to set up an advertising company.

At that time, Chen Bifu said to the media that the greatest feeling of talking about his own business is that it will happen.

When their own experience accumulation, financial strength, personal connections and team building have reached a relatively mature level, coming out to start a business is a matter of course.

Perhaps in many young people's eyes, Chen Bifu began to start business when he was only 40 years old. He seemed too conservative and lost many opportunities. However, the probability of his success in business was greatly improved. In the past 10 years, the biggest advertising company still lives healthily.

Failure often stems from blindness, and preparation before entrepreneurship is very important.

Before starting a business, entrepreneurs need to know clearly where their core competitiveness lies in technology, products, services, human resources, or capital strength, and government relations. If the above resources have certain advantages in their fields, it will be easier to survive in the early stage of entrepreneurship.

Therefore, business consulting experts generally suggest that young people in China should not blindly start their own business, but accumulate certain professional experience and experience in commercial operation. After having a certain amount of capital, customer resources or unique business models, they will seek to start a business again, and the chances of losing them will be greatly reduced.

How can we avoid the enemy's disunity? At the beginning of the business, the partners should establish the spirit of contract to design the situation that may be foreseen in the future, which is reflected in the articles of association, so that the future changes can be evidence-based.

In addition, part of the equity can be allocated to the partners who have made outstanding achievements in the future to redistribute, reserve a living and maintain a certain degree of flexibility in the system.

A well-known consulting firm in China has recently been dissolved.

This consulting company was once one of the most successful consulting companies in the domestic management consultancy. The 4 partners of the company also had certain influence in the industry.

At the beginning, the 4 partners set up the company on the basis of the average distribution of 25% shares per person, and each person was responsible for one business.

Because each of the 4 founders has strong business capabilities in their respective fields, the company went smoothly in the early stage of its business and quickly developed into a well-known management consulting company in the industry.

However, with the development of the business, the development of the 4 businesses has been unbalanced, two of which occupy 80% of the company's business volume.

Soon there was a contradiction between the 4 partners, but the 25% of the agreed shares were hard to change, and when the contradiction was difficult to reconcile, the company was disbanded unexpectedly, and 4 partners went on their way.

The partners and shareholders of start-ups often decide the shares according to the proportion of capital contribution, ignoring the intangible assets of personal ability and intelligence level, especially in the technology oriented or intelligent oriented industries. The subsequent development of enterprises often relies on the promotion of professional technology and intelligence, and capital becomes a secondary factor.

The biggest characteristic of entrepreneurial enterprises is that development and change are very fast.

At present, many entrepreneurial companies mostly adopt the mode of dividends, joint-stock and joint-stock. Most of these two models have their own merits and demerits. They also have successful and failed cases. They need to grope according to the characteristics of different enterprises.

But at the beginning of the venture, it is better for the partners to establish the spirit of contract, to design the situation that may be foreseen in the future, and to embody the evidence for future changes in the articles of association. Besides, in addition to the proportion of capital contribution, a relatively reasonable share proportion is allocated, and the backbone members of the team should be assessed in the course of the development of enterprises, and the proportion of shares can be adjusted in a timely manner instead of immutable.

In the early days of the founding of a new company, the number of shares that can be allocated to the outstanding partners will be redistributed in addition to the contributors, so as to maintain a certain flexibility in the system.

Can social relations be forever? In the process of starting a business, we should not rely too much on the relationship between people. We must start our business as a fulcrum, but the problem is that the relationship can not be guaranteed once and for all. Once it is lost, the road to entrepreneurship can easily be halted.

After all, ultimately, business decides the connections, not the connections.

For many years, Chen Feng has been engaged in a relatively free occupation -- personal studio, which helps some small businesses to do some design and printing business.

However, an opportunity has changed Chen Feng's fate.

Zhang Yan, an old friend of Chen Feng, has just been promoted to an operation director in a foreign company, holding millions of printing business a year.

Under Zhang Yan's "help", Chen Feng got the big business in a logical way, so he recruits the army and quickly set up a large scale production company. The printing and design business of several million yuan a year can even reach millions of yuan.

Under the anaphora of Zhang Yan, Chen Feng is content to do the printing business of this foreign company.

However, two years later, Zhang Yan accidentally left the foreign company. He succeeded in replacing the printing business with his successor.

Chen Feng, who lost his business backbone, soon failed to support it. After a few months, he had to close the company.

The biggest feature of Chinese entrepreneurship is the relationship between entrepreneurship and entrepreneurship.

Chinese people value relationships more. They also rely on personal connections in the process of entrepreneurship. They often start business as a fulcrum, but the problem is that relationship can not be guaranteed once and for all. Once the relationship is lost, the road to entrepreneurship will easily stop.

After all, it is ultimately the business that determines the connections, not the connections. "

Wang Donghui feels that although human resource is very important in the process of starting a business in China, it can not rely too much on the resources of the relationship. Instead, it should take precautions to strengthen other aspects other than the advantages of human resources, such as upgrading new services and products, and developing new customers, not relying too much on single customers.