1000 Business Lessons Every Businessman Must Know

Chapter 14 Entrepreneurial Trap: Common Mistakes When Being a First-Time Boss (1)
099. Put all your eggs in one basket
Although a single investment will often bring good returns to the enterprise due to the concentration of resources and funds when the project is selected correctly, the risk of a single investment is also obvious. As long as a huge risk occurs once, it may cause investors, The wealth accumulated by the founders of the business over the years is destroyed.

With the improvement of people's living standards, special dishes have gradually been favored by urbanites.Seeing this scene, Liu Jun resolutely put aside other investment projects that have been under investigation after preliminary research, and devoted himself to special breeding—mass breeding of civet cats.

Liu Jun professes to believe that "risks and opportunities coexist". Get great rewards.But a sudden "SARS" epidemic quickly shattered Liu Jun's dream.

Figuratively speaking, investment is too single, like putting all eggs in the same basket. Once the basket is overturned, all the eggs will be broken.The portfolio investment composed of multiple projects can greatly reduce the investment risk brought by a single investment.As an inexperienced entrepreneurial investor, when making investment decisions, you must expand your investment ideas as much as possible, cultivate a diversified investment thinking mode, maintain the diversification of investment projects, and pay attention to striking a balance between projects and funds.

100. The "stall" is too large, and there is a lack of risk prevention
Li Cheng is full of confidence in the electric bicycle project he plans to invest in. After simple research, Li Cheng believes that this project will definitely bring him a lot of income. In addition, through his relationship, Li Cheng easily borrowed a large amount of money from the bank , Confidence is even more "skyrocketing".Li Cheng looked down on his colleagues for their timidity and small fights, and thought that he must not be like them, and if he wanted to do it, he would do it big.Li Cheng, who only wanted to expand the scale of investment, made the "stall" bigger and bigger, connecting two production lines.The corporate debt snowballed with Li Cheng's blind investment, but Li Cheng didn't care.In Li Cheng's view, once the enterprise is in operation, any debt can be paid off.But when Li Cheng's business started to operate, his peers had made a lot of profits, and they had already started low-price competition, desperately lowering prices.Li Cheng's products were produced but could not be sold, and he fell into a crisis immediately.

The "stall" is too large, and the lack of risk prevention is a common problem for some entrepreneurs. They don't know that various crises lie dormant in it, and may erupt if they are not careful.At the same time, when the economy is growing rapidly, people tend to "overspend" their confidence, overly optimistic about the future, and despise risks, thus forming an investment bubble. Once there is a sign of trouble, the bubble bursts instantly, and investors will fall into crisis and difficulties.

Investors should consider the investment orientation of enterprises from the perspective of risk and return balance, choose appropriate investment projects, and control the investment scale within an appropriate range.

101. Trusting others, not doing market research yourself

Facts have proved that the success of a start-up depends to a large extent on each start-up founder's preparations for the company's market prospects, planning, and operations.It's like standing at an intersection with many forks. If you didn't think clearly before and chose the wrong path, no matter how fast you walk afterwards, you will only get closer to the cliff.

Zhang Xin has worked in foreign-funded enterprises for seven or eight years, and has accumulated 35 yuan in his hands. Recently, because the foreign-funded enterprises he served were preparing to withdraw from China and were unemployed at home, he wanted to find a suitable project and prepare to start his own business.

One of Zhang Xin's good buddies, Mr. Wu, came to him after hearing the news, and tried his best to preach to him that selling second-hand computers would definitely make money.When Zhang Xin was hesitant, Wu said that if Zhang Xin believed him, as long as Zhang Xin invested 35 yuan, he would do all the other things, and then they would share a 35-35 split.Wu listed his own market research materials one by one, and analyzed the market prospect of selling second-hand computers.Bewitched by Wu, Zhang Xin not only agreed to the investment of [-] yuan, but also did not personally or entrust others to re-investigate the market prospect of the second-hand computer distribution project before handing over the money to Wu.As a result, after Wu received the money, he quickly collapsed the business of distributing second-hand computers. Of course, Zhang Xin's investment of [-] yuan was also in vain.

Usually, entrepreneurs tend to over-trust the opinions of others, especially close friends, thinking that the words of friends represent the truth of the market, and they do not need to investigate the market, which leads to investment failure.When making investment decisions, don't easily trust anyone's opinions and suggestions, even if this person is a well-known expert, your own brother, or your parents.It turns out that to know what a pear tastes like, you have to taste it yourself.This is an eternal truth, and investors should keep it in mind.

102. Eager for quick success and instant benefit, only looking at immediate benefits

In Zunyi City, Guizhou Province, a local private enterprise owner named Meng Kui saw that others made a lot of money by producing plastic film. Meng Kui was very jealous, so he quickly raised 100 million funds and decided to invest in the production of plastic as soon as possible. Film this item.At this moment, one of Meng Kui's technicians named Li Xianjin advised him: "Boss, as long as you delay the start of work by 4 months, we can install and debug the most advanced equipment at present. The plastic film produced by the company is much better than that produced by existing equipment, and I believe it will sell much better."

Unexpectedly, after hearing this, Meng Kui was very unhappy and said: "Delay the start of work by 4 months? Do you know what it means to delay the start of work by 4 months? It means that we will lose millions of dollars in profit." He ordered start.But as Li Xianjin expected, within a few months of the factory's opening, the products fell into unsalability due to outdated supporting technology and low technological content of the products.Meng Kui also had to re-invest huge sums of money in technical transformation of the factory that had just started operation.

I heard many successful people say that the more a person focuses on money, the less chance he has to make a fortune.Eager for quick success, seeing the immediate benefits, ignoring the process and foundation, when it is really needed, the lack will lead to a collapse in the middle.

Entrepreneurs are easily driven by short-term interests when they first venture into investment, and ignore long-term interests, and adopt short-term behaviors eager for quick success and instant benefits. Although doing so can make the company temporarily profitable, it loses the stamina for long-term development.Investment is a systematic project. Entrepreneurs must overcome the desire for quick success and instant benefit, let alone kill chickens and fish for eggs.

103. Being too obsessed with dominance, which ends up having power but no place to use it

It is an important misunderstanding for entrepreneurs to be obsessed with dominance and seek overly weak partners.

For an entrepreneur, it takes many years of hard work to achieve success. There are many factors that affect success, among which the choice of partners is very important.

Nowadays, many entrepreneurs and entrepreneurs define cooperation as business contacts and collaboration between two companies, which is actually a bit superficial.For an enterprise, partners are extensive in the development process.Entrepreneurs must achieve internal and external coordination, integrate several forces, and at the same time "adapt to the enterprise's conditions" in order to accelerate the development of the enterprise to the greatest extent.We are in a society full of opportunities.

Almost everyone has an entrepreneurial dream in their hearts - to gain power, prestige, wealth, reputation and applause through self-made, and become a legend like Microsoft's Bill Gates and Apple's Steve Jobs.However, the first stage of every journey is the longest and most difficult, and starting a business is no exception.You have to be prepared for this and take some proactive steps to run your business.

Everyone wants to "I have the final say", and everyone wants to be a "master", but not everyone can be a master, and not everyone can be a good one. Being a master means more dedication and greater responsibility.Entrepreneurs focus on the right to speak when looking for partners, but weak partners may not be able to give you timely and powerful help when you need it, and may deter some stronger potential partners and abandon you And go, make you lose more opportunities.

104. Neglecting the reputation and strength of the partner
Before choosing a partner, you must first determine the form of the business.Every start-up founder needs to construct a form for his own business, the closer to his own needs, the better.The founders of start-ups set up the organizational form of the company as a guarantee against the unexpected and as a means of reducing business expenses.The right form can help reduce the disadvantages of each start-up founder and protect the non-commercial assets of each start-up.Consider corporate forms such as an industrial and commercial corporation (for-profit corporation), holding company (company with limited shareholders), limited liability company, limited partnership, or general partnership (partners share shares and share unlimited liability) - this way Even if your startup's ship sinks, you can survive it too.

Entrepreneurs are eager to develop the enterprise, but neglect to inspect the reputation and strength of the partner, which can easily leave hidden dangers for the enterprise.When it comes to capital investment, it is necessary to emphasize the period when the funds are in place and the ratio of funds in place.Entrepreneurs must conduct all-round investigation and research on partners before cooperating with them, and have a detailed understanding of their conduct, operating capabilities, financial strength, etc., in order to reduce investment risks.

105. Choose an investment partner whose strength far exceeds your own
Choosing an investment partner whose strength is far superior to their own is a major decision-making misunderstanding for entrepreneurs when choosing a partner.

Several college students decided to start their own businesses right after graduation.They are optimistic about a marketable investment project, but because they have just graduated and have a weak economic foundation, they have to seek investment partners in order to share benefits and risks.After many investigations, they chose a large-scale enterprise with great strength. The other party invested enough funds for this project and also occupied most of the equity.The funding problem was resolved, but no consensus was reached on many issues such as operation, management, and manpower.Since the other party is a major shareholder, they did not operate according to the thinking of these college students at all, and as a result, the project failed.

Some entrepreneurs have the idea that "it's good to enjoy the shade under the big tree", and simply think that as long as they have funds, other problems can be solved easily.In fact, because the partners are too powerful and have a strong sense of seizing power and grabbing power, although several people have knowledge and ideas, they are caught in the embarrassment of being useless as heroes.Especially for entrepreneurs who have just debuted, when financing with equity, they must consider the balance of power between the two parties.Although you can't focus on "checking and balancing" the opponent, you must always be vigilant about being "checked and balanced" by the opponent.

106. Friendship with buddies is more important than your own long-term development

(End of this chapter)