Focus on sharing the business management must be used on the road of entrepreneurship general knowledge, common sense, so that you in the road of entrepreneurship less detour.

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The importance of this article: ★★★★★+

Module: Industry Cycle

Invite you to read before you think:

In addition to hard work, attentiveness and what determines success or failure?

Why do some people prosper in the same industry while others fail?

Why do most entrepreneurs fail to make money?

Preface:

The success rate of entrepreneurship is less than 5%,

To be honest, your entrepreneurial failure is really not that you don't work hard, and even more so that you don't have the heart.

There are millions of reasons for entrepreneurial success, and different reasons for failure.

In this post we'll talk about what's new about entrepreneurial failure.

There is a girl in my company, Li, who likes to practice yoga, and I found that she always changes yoga studios every three to five to learn.

I then asked her: are these yoga organizations bad service or bad teaching?

She said: with the teacher and the service has nothing to do with these organizations, the service, teaching are each unique, because all yoga training institutions have activities, new members of the first month as long as dozens of dollars to a couple of hundred ranging from a month to learn, than to do a membership card less than three to five thousand more than tens of thousands of cost-effective.

The layman to see, so many yoga studios in this industry must make money, hurry to follow the trend to open a, but do not know when you are determined to follow the trend has been decided to enter the industry is very difficult to earn money.

Why? To give another example

I have served a customer to do catering, he invested two million in a better location to open a Sichuan restaurant, surrounded by six small and large neighborhoods.

The first year did four million turnover, three million costs, one million net profit, this business is not bad, 50% return on investment.

The second year still did four million turnover, still three million cost, one million profit, two years of time, plus a store.

But the good times did not last long the third year, he found him across the street more than a Sichuan restaurant, who opened it?

A store for his firewood, rice, oil and salt supplier to open, to his supplier by supplying him with food and oil to judge the local catering business is good, to open a.

The supplier of the restaurant is a good place.

Not long after he opened a Hunan restaurant next to this who opened it? A customer who often eats in his store opened.

This customer often come to eat and found that the restaurant business is good, think the catering business is good to do, so they came to open a.

The customer is not only a good business, but also a good business.

The leakage of the rain, this time the head chef to find the boss: boss processing capital, you earn so much a year, only to give eight thousand dollars in wages, do not add to the twelve thousand wages will not do.

The boss heard the head chef said so heart is very upset thinking: you really big mouth ah, you want to go on the go, immediately give me to go.

After the head chef left, the head chef was upset, thinking that your restaurant business is good, I can't help it, the flavor of the food is what I do, you make so much money, only to give me so much.

So the head chef was not convinced to find a few people to partner with him across the street and opened a Sichuan restaurant.

Behind this street one after another opened a few, this time the competition appeared.

Each store is thinking about how to improve my turnover, how to increase customer traffic, how to improve my unit price, how to reduce costs equal to maximize profits.

And so it is by the earliest supplier to open that store to start: from today onwards, come to my store to spend 10% off.

A few others look at how this store can be so engaged in it, and then there is a start: today up to my home to eat 20% off.

Immediately after the others began to 70% off, 60% off, 50% off, and so discount discount discount discount discount to all together prematurely.

This is today's market environment, the means of competition, you do not have to feel good, do not do also have to do.

Then again, wasn't it so successful in the past?

This is the first time I've seen this.

Then why were many businesses successful in the past?

In the two years I have been engaged in business management, I often ask the bosses of enterprises for advice: Mr. President, share the secret of your success.

Due to the influence of success, so many bosses began to boast, how to blow I probably summarized a few points:

Effort: because I work hard ah

When I came out of the time how difficult ah, just came to the body of the money are living in the train station, at that time, who gave me a job I work hard to work hard to do, which is like you have such a good condition is still reluctant to go to work.

heart: because I am very heart ah

I not only think of how to work inappropriate tasks to complete, but also heart to do things to the extreme, that time a day to earn only a dozen dollars, I desperately do, desperately do hands are grinding up calluses.

Good to learn: because I am good to learn ah

At that time to me a post, I not only to this post to do a good job but also to learn other posts, buy books to see, to learn management positions, to participate in a variety of training.

Bold: There is the most important one I bold ah

Since the start of no money, I find home relatives borrowed 50,000 dollars to start, you know, that time that 50,000 dollars for our family means nothing.

Does your past success have anything to do with that?

I call these: the standard for entrepreneurs

What is the standard for entrepreneurs, what you can do others can do, what you will others will, this is called standard.

The terrible thing is that you will be others will be, you do not have others have, you take everyone will be the standard with others to compete this is the most terrible.

In my opinion, these are standard with no relationship to success, these in my opinion is the success of the self-hypnosis, why, for example, will play mahjong?

Four people about to play mahjong, about to say from eight o'clock in the evening to twelve o'clock in the evening to not play, the result is not pay attention to the collective overtime to the next day at twelve o'clock in the middle of the day.

Four people played a night, a person won a hundred thousand dollars, the remaining three have lost varying amounts of money.

At this time someone asked to teach the person who won the money: why did you win a hundred thousand dollars?

The man who won the money began to brag:

Because I try ah, you know, I try ah to play to the next day at twelve o'clock a little bit not sleepy;

effort is not enough also because I heart ah, every circle as the first round of play;

At the same time I am also very good at learning, the end of each game must be introspective to summarize the just which card did not play well;

There is also the most important point because I dare ah, I do not know, I do not know, I do not know, I do not know, I do not know, I do not know, I do not know, but I do not know, I do not know. The most important thing is that I have a lot of guts, I shouldn't have touched it, and I shouldn't have been able to get it to work, so I don't have a lot of guts to get it to work.

I believe that the losing three people hear this must take the stool to knock the winning one.

The first thing you need to do is to get your hands dirty. The first thing you need to do is to get a good deal of money and then you have to pay for it. The first thing you need to do is to get your hands dirty.

Is not the person who lost the money is not attentive? Playing mahjong losing people more attentive or winning people more attentive? The people who lost the money which is not hard work?

Is it not good to learn to lose money? Playing a game summarized three minutes, a night down the thighs are swollen shoot, losing money which is not good to learn?

Is not the loss of money is not bold? But all playing mahjong which is not bold?

Then back to the business position, business failure to lose money you can say he did not try? You can say that he is not attentive? You can say that he is not good at learning?

They're not the only ones who have been in the business for a long time.

Perhaps you think this example is very far-fetched, I want to tell you not far-fetched at all.

The reason why you can win at mahjong is because you are lucky and sit on the right feng shui position, while many companies used to be able to make money because of the industry cycle.

The industry cycle of an industry is divided into three phases, namely, the early stage, the middle stage, and the late stage of the industry.

The early stage of the industry is characterized by: few competitors, product scarcity, customer rookies do not understand the product, profit margins are also profiteering.

As in the past from Guangzhou to take a twenty dollar clothes, to the second and third tier cities to sell two or three hundred dollars are very normal.

At that time, fewer competitors, customers have no choice, do not understand is a rookie, profit margins, this is the industry in the early stage.

The characteristics of the industry in the middle: more and more competitors, products are gradually saturated, customers also know how to compare, profit margins decline to micro-profit.

As more and more competitors, a variety of discounts to attract customers, customers have become old birds to buy things will be compared.

More products, competition, grabbing customers, customers more and more understanding, comparison shopping has led to profit margins micro-profit.

Characteristics of the late industry: competitors wantonly compete, customers are even more sophisticated, the industry profit is basically no profit or thin profit.

The industry has been a red sea, the customer is more than three look at the product, look at the service, look at the after-sales service, look at gifts and so on.

Well than the clothing industry, no matter when you go shopping, just happen to meet the mall activities discount, good luck can also run into clearance processing, jumping tear sale .....

This time is the end of the industry, the amateur look lively want to follow the trend into the industry, the insider every day thinking of hurrying to clearance processing before it is too late to change line.

Special attention is paid to the industry cycle, the industry cycle is not the reason that will absolutely lead to unprofitability or loss.

In other words, it is why the same industry some people do a good job, while others are difficult to move.

We put aside the resources of each business, relationships, geography and other factors that can not be reproduced variable.

Here's the key variable - capability.

The ability here refers to the comprehensive ability of an enterprise's team, which can be subdivided into operational ability, co-ordination ability, marketing ability and so on. ......

I use a two-dimensional matrix to show the analysis, the red area represents the comprehensive ability of an enterprise, the blue represents the industry cycle in which the enterprise is located.

In the first quadrant, the enterprise's comprehensive ability is strong, but also in the early stage of an industry.

This stage of the enterprise comprehensive ability is strong, coupled with the early stage of the industry, the early stage of the industry is characterized by less competition, more profits, customer rookies, so this stage of the enterprise can make a lot of money and rapid development.

In the second quadrant, because of the strong comprehensive ability of the enterprise, even if the industry is in the late stage of the industry, but also through the comprehensive ability of the enterprise to make a profit, except that the profit is not as much as in the early stage of the industry.

This is why many companies remain profitable today, because there is a differentiation in the overall capabilities of each company.

It is worth noting the third quadrant, where the vast majority of companies survive.

In the early stages of the industry, even if you do not understand the operation, coordination, marketing, management, etc., you can still make money, because the early stages of the industry is characterized by a scarcity of goods, there is no competitors, the customer is a rookie, and the profit is also particularly substantial.

The last quadrant is also one of the reasons why so many businesses today go from establishment to rapid closure.

From the perspective of the industry's later stages there is no shortage of capable, well-funded, talented, and intelligent rivals in the competitor group.

And these rivals have divided up most of the people fine customers, while customers are more savvy, profits are as thin as cicadas

At this time, the enterprise itself does not have some of the qualities and ability to hastily join the industry late in the industry, want to make money is too difficult.

Take the real estate industry, for example, most of the top 500 real estate companies were founded in the 80s and 90s.

Vanke 1984, Wanda 1988 Beiguiyuan 1992, Poly 1992, Greenland 1992, Evergrande 1996 .....

The eighties and nineties would be the early days of the real estate industry, with fewer competitors, less knowledgeable customers, high market demand, and windfall profits.

Macro urbanization construction, the local need for income, micro people just need to buy more and more factors, marriage, school districts, business districts, pension, medical, investment ......

The real estate industry has indeed driven more than a hundred industries, boosted the economy, and outrun inflation.

What shape is the real estate industry in today?

Vanke shouted: live!

Beiguiyuan reduced speed.

Wanda de-real estate, turn to culture and sports, film and television, asset securities, business management .....

According to media combing, before July 19, 279 real estate companies went bankrupt in seven months. On average, 1.5 real estate companies went out of business every day.

Missed the early days of the industry today, even Wang Jianlin and Wang Shi two people plus a piece is difficult to recreate a Wanda.

The two-dimensional matrix analysis of industry cycles and capabilities explains why some companies in the same industry remain profitable while others struggle.

So how do you deal with industry cycles?

Four ways to give you:

1. Change of territory:

Change your industry for a competitor less, product scarcity, customers do not understand the territory, such as your industry to the Belt and Road countries, or your industry to India, Africa and other places in the early stages of the industry.

2. Change industry:

Do not want to change the region to change the industry, from the new to find an industry, the industry in the early stages of the industry, but such an industry is not good to find, even if you find it is also likely to be quickly follow the wind to copy.

3. Change mode:

Neither want to change the region, nor do not want to change the industry, there is a way to change the mode;

For example, Alibaba and Jingdong e-commerce model in today's view is already a traditional business model.

Today you do e-commerce in the self-employed, just no traffic are enough to kill you ten thousand times.

No precise customer group positioning and business model is too difficult to close the loop.

It is better than Pinduoduo through the group price cutting, accurate positioning of the three or four line of the sinking users also acquired hundreds of millions of users, achieved good results.

Through precise positioning + business model closed loop ultimately NASDAQ listing. (About the business model, the follow-up will be more about the analysis of the business model)

4. mention the ability to:

Neither want to change the territory, the model, and do not know how to design the business model, the enterprise wants to survive, on a road.

Continuously improve themselves and the team's comprehensive ability to cope with the ever-changing market competition.

This is an era of rapid change, which at the same time is also a you wake up too late, you do not have to wake up the times.

Kodak's #1 in the world for film was outlawed by smartphones.

Nokia's former CEO, acquired by Microsoft, said: we didn't do anything wrong, but we lost.

You can not say that Kodak to do film, Nokia to do cell phones do not work hard, do not pay attention, not good to learn, subvert you may not be your peers.

The scariest thing is that you will others will, but others have you do not.

Finally: May my sharing trigger your thinking, so that you take the road less traveled.

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Author introduction: Tang first crazy, focusing on the sharing of entrepreneurship must be used on the road of business management general common sense, knowledge which includes: enterprise construction, business thinking, equity structure, financial and tax literacy, business models and case studies. Concerned about this number, a weekly enterprise dry goods let you in the entrepreneurial road less detour.