Tutorial Secret One: Why Start a Business?
This is the first question you must ask yourself before starting a business, remember this!
Answer one: The people around me have become rich through entrepreneurship, I'm not any less smart than them. If I start a business, I surely won't go wrong.
Answer two: I'm not too young or old. A person can't work for their entire life, right? This project at hand is just perfect for starting a business!
Answer three: I've got some savings now, and I'm not too old. Even if I lose money, I can still go back to working. When I get older, I'll be too hesitant.
Answer four: People who run restaurants are getting rich (or other industries, in short, things that entrepreneurs are looking at), so I want to open one too.
Answer five: I've climbed up the ranks as much as I can, there's no way I can become the general manager. My salary won't increase much either. If not now, then when should I start my own business?
Answer six: Houses are so expensive now. It seems like I can never afford one by just working. Let's give it all I've got!
The above are the answers most people lacking entrepreneurial knowledge would choose from their hearts. If your answer falls into any of the above categories, please remember this: treat the idea of starting a business as nothing more than boasting material.
The correct answer is: I have already discovered a project that is certain to make money!
Remember this secret well:
Entrepreneurship Tutorial Beginner Class Secret One: Because I have found a feasible project that is sure to make money, I have decided to start a business!
Any reason for starting a business other than this is wrong! Age, seeing others succeed, high housing prices, having spare cash, none of these are reasons to start a business. They are merely excuses for wasting your family's wealth!
Tutorial Secret Two: Am I someone with an entrepreneurial mind?
Unfortunately, the vast majority of people in this world are not suitable for independent entrepreneurship, but only a very small number of people can clearly recognize this issue (usually after they've lost everything including their wives and children).
Note: An entrepreneurial mind does not equal a managerial mind, nor does it equal an execution mind. But, if you want to start a business independently, not having an entrepreneurial mind is equivalent to suicide, or playing pretend with your own money. So, assessing your own mind is the most crucial top priority. If you're lucky enough to meet someone like me, I can help you assess for free, hehe!
Too many stories tell us this: Wang Lao San worked hard, took losses as blessings, and finally became a big landlord!
Li Lao Si got up at 3 a.m. to work and went to bed at 2 a.m., and finally became a wealthy tycoon! These stories are originally meant to amuse people, nothing more than the concept of good deeds being rewarded with good results and bad deeds with bad ones. However, unfortunately, I find that many people use such stories to view their own entrepreneurship: I can endure hardship! I'm not afraid of taking losses! I have strong willpower and can withstand all kinds of pressure! None of these are sufficient conditions for success.
Let me share a real story with you about what an entrepreneurial mind is.
Every day at noon, our office colleagues would call to order fast food. Among the many fast food delivery people, there was one who carried a large wooden box covered with a thermal cotton towel. Every time this person delivered the meal ordered by a colleague, they would ask if anyone hadn't ordered yet. This person always carried 4-5 meals that no one had ordered. And I noticed that every time, there were always people who hadn't ordered, and they would directly buy the boxed meal from this person. I suspect that while this person was helping a restaurant deliver meals, they were also doing side deals. Knowing that delivering meals earns a commission of only 0.5 yuan, but I estimate that each meal sold through side deals earns them at least 2 yuan.
This is called an entrepreneurial mind - the ability to easily discover business opportunities in work!
Alright, so how do you determine if you have an entrepreneurial mind? It's simple, look back on your past. Have you ever discovered something in your work that could create profit, but no one else was doing it? If you've never had such an experience in the past, unfortunately, you're someone without an entrepreneurial mind - you're at least unsuitable for independent entrepreneurship! If you start thinking now and realize there are many business opportunities, congratulations, you're very suitable to be a vice president, working under my guidance, hehe!
Entrepreneurship Tutorial Beginner Class Secret Two: People without an entrepreneurial mind are unsuitable for independent entrepreneurship!
Tutorial Secret Three: How to judge if a project is a good one?
If you've passed the aforementioned two tests, let's move on to the next phase and see how good your project really is.
Due to being in Shenzhen, over the past dozen years, I've witnessed countless entrepreneurial stories, and the majority of these projects were doomed from the start. If you could foresee your inevitable failure, think about how much money you could save! And how much regret you could avoid in the future! So consulting with experts like me is absolutely necessary.
Let me give a few examples using friends who didn't make it:
Example one: A friend worked as a department manager in a large company, with 300,000 yuan in savings. Feeling that buying a house in Shenzhen was out of reach, and considering his age, he discovered that Shenzhen was a hub for counterfeit mobile phone manufacturing. He decided to return to his hometown and establish a company to sell counterfeit phones.
Example two: A friend had 500,000 yuan in savings, feeling that continuing to work was no longer an option, decided to join the 7-11 franchise.
Example three: A friend was the general manager of a provincial branch of a large mobile phone factory for 5 years. After the large company went bankrupt, due to his excellent character, dozens of employees were willing to work without pay for months, wanting the friend to lead them in entrepreneurship. The friend ultimately chose to act as the provincial agent for a certain beer brand and also as the agent for a certain English learning machine.
Example four: A friend originally worked in IT sales, deciding to start a business abroad, eventually choosing Indonesia to develop text messaging services, specifically collaborating with a Shenzhen-based SMS equipment manufacturer and operator, hoping to replicate this business in Indonesia.
How do you feel about these projects? These projects are being done by some people, and some are making big profits, but - can you make money from them? To do or not to do, that is the question!
As a seasoned expert, here’s my evaluation of the above projects:
Project One: Trade-type businesses generally involve buying from upstream suppliers and selling downstream, earning a margin in between. It looks very simple, and most people like to calculate the margin and then jump right in. A small portion of people might succeed by luck, but the majority end up losing their down payment for a house. Why does this happen? Here's a simple trick to judge whether such a business is viable - you need to control at least one end of the upstream-downstream chain. What does this mean? Either you are extremely familiar with the upstream supply, no one can deceive you, and you know all the details, or you have an extremely reliable professional acting as your advisor (such as your wife, brother-in-law, cousin, high school classmate, etc., in short, someone who absolutely won’t deceive you and will selflessly inform you of everything). The same applies to the downstream. If you’re unclear about the upstream, but you have absolute confidence in selling the product, or you have absolute advisors assisting you. If you control both ends, congratulations, you can skip straight to my intermediate-level tutorial. If you don’t control either end, then congratulations again - you’ll be using your pitiful savings as tuition to learn 10-30% of my beginner-level tutorial.
This project one made the major mistake of being unfamiliar with both ends, relying on gut feelings. Certain death awaits!
Review of Example Two: Any project involves the question of how much investment is required and what the returns will be. We can imagine, investing hundreds of thousands in a single 7-11 store, what if the store doesn't perform well? Does every 7-11 store make money? How do I ensure my store makes money? Will the main 7-11 headquarters refund my investment? Can I quickly transfer the store? Can an investment yielding over 10% annually be acceptable? If stable returns exceed 10%, why don't multimillionaire bosses open hundreds of 7-11 stores to earn this steady profit?
Remember this secret: During the early stages of entrepreneurship, absolutely do not engage in capital-intensive projects!!
Reasons:
1. Capital-intensive projects generally require huge investments, with unimpressive profit returns.
2. There is no guarantee mechanism for exiting capital-intensive projects. If you regret, you'll find that the project ties up not just your money, but also your unlimited time and energy in the future. If the project loses money quickly, you can decisively end it, but if it limps along as a half-dead project, you're finished!
Some people disagree with my point of view, saying that many friends near them joined franchises and are now rich, or that they themselves joined a brand and live comfortably. But—please ask, if franchising were so profitable, why doesn't the main store operate direct outlets instead?
Therefore, all franchise chains fall into this category, with a success rate absolutely less than 40%. Some say a 40% success rate is already high. Is there any business that guarantees success? Really? Please close your eyes and carefully consider: Are you really prepared mentally to lose money? I bet almost all people starting businesses are not ready mentally to lose money. They only lower their noble heads when forced to accept the reality of losing money.
Now it's good because you've encountered me, this rare expert who tirelessly imparts wisdom. I'm that legendary master who gives away secrets. Meet me, take my classes well, and remember—our goal in entrepreneurship is—100% success, not 40% success!!
Factories, franchise chains, developing something new, designing a new product—all belong to this category of projects. These things are not impossible to do, nor unprofitable, but they are unsuitable for beginners risking all their savings.
Review of Example Three: Please ask: What is opportunity? The vast majority (over 99%) of people in this world don’t understand what opportunity is, always lamenting that opportunities don’t favor them, feeling they are worse off than Saddam and harder off than Laden. Let me, this hermit sage, tell you what opportunity is—opportunity is the valuable part of what you already possess. Understandable? Too profound? Maybe it should be placed in the intermediate-level tutorial. If you never owned something, it obviously won’t be your opportunity. Opportunity is right beside you, and you already possess it, but—unfortunately, because you’re too stupid, you don’t think it’s an opportunity; you think it’s garbage. The opportunities you see are things you haven’t obtained, things others are profiting from, like: You think Zhang San has a great opportunity because he has an uncle in the Securities Regulatory Commission who can leak stock information, Li Si has a great opportunity because he hit the jackpot selling vinegar during the avian flu outbreak. For Zhang San, his uncle is his opportunity; for Li Si, the vinegar he sells is his opportunity. Therefore, for you, you must thoroughly analyze all the resources and relationships you possess. Your opportunities are hidden within what you already own, absolutely not in what you don’t possess.
A friend of mine faced setbacks in business but still had fairly ample funds, lamenting about not knowing what to do and aimlessly searching for projects for over a year. After receiving my guidance, he retrieved all the business cards and contact information of everyone he had met in the past. After a week of screening, he identified three potential opportunities and eventually chose one after comparison. Within less than a month, he restarted his business, which is now thriving, ha ha.
People who cannot find their own opportunities are pitiful, but those who do not recognize their opportunities are foolish. The failed individual in example three abandoned his opportunity (extreme control over the provincial mobile phone market) and turned to selling beer and educational machines in completely foreign markets. In the end, he threw away intangible assets worth millions (control over the provincial mobile phone market and a complete marketing team), ensuring his failure from the very beginning. Early in his entrepreneurship, I pointed out his mistakes multiple times, but he was extremely confident and did not accept my harsh but sincere advice. After two years of hardship, he finally liquidated everything and now works for another company, becoming the provincial manager elsewhere again. Pitiable and lamentable!
Regarding how to effectively uncover and utilize your opportunities, the story in "Rich Dad Poor Dad" about the author renting books as a child is the most representative. I recommend aspiring entrepreneurs search online and study this story.
Recognizing and evaluating opportunities applies not only to budding entrepreneurs but also to employees hoping for promotions, and even to those who have already succeeded in entrepreneurship. Given the extensive content involved, I will elaborate in detail in the advanced course when the opportunity arises.
This idea can also be rephrased: Do what you're familiar with. Your business opportunities are around you, absolutely not something told to you by someone distantly related or something you hear about online. If, in the early stages of entrepreneurship, you're doing something unfamiliar, your chances of failure are greater than 90%. Abandoning your opportunities equals abandoning your future.
The friend in example three engaged in unfamiliar endeavors and easily gave up his advantages, leading to inevitable failure.
Once again, everyone: In the early stages of entrepreneurship, our goal for success is 100%! Never attempt to challenge your intelligence, and never overestimate your abilities.
Review of Example Four: This friend is the most daring entrepreneur among my friends, with no knowledge of English, relying solely on knowing a few Indonesian Chinese on QQ to go solo to Indonesia. Not knowing where to go upon arriving at Jakarta airport, he spent half a day until encountering a kind-hearted Chinese person who introduced him to a cheap hotel, allowing him to settle down. Almost a year has passed, and this friend has almost depleted 200,000 yuan in savings, met several wealthy Indonesian Chinese, but completed zero projects. Recently, during dinner with this friend, I excerpted part of our conversation:
Me: What exactly did you plan to do when you went there?
Answer: Plan to set up SMS services. Look at how rampant mass SMS services are in Shenzhen; Indonesia hardly has any, so there must be enormous market potential.
Me: What specifically do you plan to do? Sell SMS equipment or make money by sending junk SMS in Indonesia for others?
Answer: Both.
Me: How much equipment have you sold? What is your daily routine?
Answer: Meet rich big bosses and get them to invest in this project.
Me: How is it going?
Answer: Now I know the second richest Indonesian Chinese, planning to invest 20 million in this project, promising me 5% equity!
Me: What exactly will the 20 million investment be used for? What will all this money be spent on? How will you make money? How will you develop mass SMS customers? Will the second richest Chinese consider this business?
Answer: ...There must be a way when we get to the mountain...
Me: What's the relationship between you and the Shenzhen manufacturer you're cooperating with? How much did you know about SMS services and technology beforehand?
Answer: No relationship. Before going, I checked online for companies. I previously knew nothing about SMS services and technology.
Me: Why don't you directly sell these SMS-sending devices in the local computer communication market?
Answer: After setting up our invested company, we will start selling.
Me: How capable is the technology of your cooperative manufacturer? Are the products developed by them? What's their credibility? Will they deceive you?
Answer: /&...#8226;#￥￥%……￥……
I no longer want to list the contents of our conversation. There are indeed many bold people in this world, but unfortunately, they don't realize that boldness alone cannot be a catalyst for success but rather accelerates failure.
For those with similar thoughts, I have a very simple suggestion: Sell your house, convert all jewelry into cash, go directly to the Macau casino, bet it all at once, with a success rate of 10%. If you win, take ten times the amount and leave; if you lose, at least you've saved your energy. How about that?
Additional Case: Doing what you love?
This is the reason and project for quite a large number of people starting businesses. I've had enough of the 9-to-5 life in the company! Not free! I want to do what I want to do, I want to open a pottery studio/flower shop/bar/gallery/travel goods store/beauty salon…!
Doing what you love is, of course, good—who wouldn’t want that? But is what you love something that can succeed? We must put a big question mark on that. Doing what you love has the following advantages: you're more willing to do it, it's more fun, and you may even be more familiar with it, aligning with my principle of doing what you're familiar with.
However, beware: loving something does not equate to it being a good business project. When evaluating a project, you must completely set aside your preferences and give them no consideration whatsoever.
Summary on how to evaluate projects:
1. The project must be in a field familiar to oneself (or an extremely reliable person). Control of either the upstream or downstream +50 points, control of both +150 points, no control of either -200 points.
2. Projects discovered in one's work +50 points, projects entirely unrelated to one's main job -100 points.
3. The percentage of total capital needed compared to one's own funds: Equal to one's capital -100 points. Calculated proportionally; for instance, if needing 20% of one's own funds, then -20 points. If needing 200% of one's own capital, then -200 points.
Textbooks never evaluate projects this way; there are countless mathematical formulas and algorithms in books. But trust me, the above three points will be your true quick formula for judging whether this project can become the starting point of your life. If you're too dumb to understand, then I'll give you a few examples:
If your cousin runs a sports shoe factory and tells you that if you can produce shoelaces with quality no lower and price no higher than existing suppliers, he will definitely buy them from you. This is called downstream control. If you negotiate with your cousin to become the exclusive general agent in a region he hasn't developed yet, and he agrees, this is called upstream control. If you happen to be the savior of the largest sports shoe wholesaler in Northeast China, and they agree to help you distribute, this is called full upstream and downstream control. Accordingly, if you can't infer and apply this, you're a fool and shouldn't even think about entrepreneurship.
If you're a businessperson for a water dispenser company and you notice that a space can be designed on the water dispenser for advertising, and you convince an advertising company to cooperate with you, this is called discovering a project in your work. People who cannot discover projects in their own work, I can solemnly declare, have a very low chance of entrepreneurial success and would do better gambling in Macau.
If your initial entrepreneurial project requires more than 80% of your funds (note: I'm talking about your own funds, excluding borrowed money), and you still plan to invest, then I see an 80% chance you'll end up destitute. As for those irresponsible bastards who repeatedly use the hard-earned money of elderly people on this forum, I’m so angry my whole body shakes. You're insulting the reputation of us entrepreneurs! What difference is there between you and drug addicts or gamblers? This is why this grandmaster urgently wrote this secret online—not to save you fools, but because I can't bear to see the pension money of the elderly wasted by you!!
Tutorial Secret Four: How to Conduct Sand Table Exercises (Part)
Among the countless failures I've guided in the past, almost no one could answer more than five of my questions. First, learn a segment from Sun Tzu's Art of War: "Those who plan for battle in advance and win in the temple calculations have gained many advantages; those who plan for battle in advance and lose in the temple calculations have gained few advantages.