Regarding the topic of entrepreneurship, the village head has mentioned it in many articles to some extent. I have always been cautious about blindly starting a business because entrepreneurship is risky and most ventures fail. Therefore, today the village head wants to discuss with everyone whether or not to start a business.

Ask yourself three questions before starting a business

Every friend who wants to start a business should ask themselves three questions before having the idea of entrepreneurship. First, why do you want to start a business? Is it because you can’t stand the deceitful environment in the workplace or be frequently harassed, or do you feel that you have skills that cannot be fully utilized, or do you have a great ambition to change something? Many people want to start a business because they have seen some dazzling projects and heard stories of earning millions per month.

Second, what are your qualifications for starting a business? Since you want to start a business, what do you plan to do? Do you have a clear understanding of the project you want to do? What experience do you have in the project you want to do? For example, some people hear about making money from live-streaming e-commerce or food delivery but don’t even know what they are.

Third, what are you willing to lose? The outcome of starting a business is likely to be a failure, so what price are you willing to pay for failure? How much money are you willing to invest? How long can you endure negative income? Are you prepared to start from scratch anytime in the face of employee turnover, malicious competition from peers, or platform bans?

Please carefully consider the above questions. If you can provide some positive answers, then answer the following questions.

Do you possess the following four conditions?

Since we all know that entrepreneurship can fail, how can we avoid the probability of entrepreneurship failure? What conditions should an entrepreneur possess? Here, we must emphasize the village chief’s four-element theory about making money again.

First, what resources do you have? Whether you open a restaurant, do e-commerce, or sell braised snacks, what resources do you actually have? Funds, technology, team, sources of goods, channels, policies, venues, qualifications, etc. What advantages do you have with these resources? Do you have enough start-up capital? Do you have teachers to consult in this area? Do you have an exclusive braised snack recipe?

Second, is your cognition sufficient? Do you have experience working and operating in the things you want to do? Do you know how to design packaging? Do you know how to attract traffic and hold events? How to deal with public issues? In addition, how do you predict the trend of the thing you want to do in the future? Is there still a chance to do it now? Are there any new ideas to bring change? If you still use old methods to do things, you can’t say how the industry you are engaged in will develop? How can you compete with others? Cognition is not only an experience but also a comprehensive ability! Being able to express more professional opinions than others, being able to predict the direction of future industry development, etc. For example, if you sell braised snacks, which ones are suitable for selling individually, which ones are suitable for selling by portions, and which ones are suitable for selling by weight? Do customers prefer sweet, spicy, or other sour and spicy flavours?

Third, can you persist? For the vast majority of entrepreneurial projects, the time to see returns starts after 3-6 months, but achieving complete profitability may take even longer. For example, opening a physical store requires upfront investment in rent, merchandise, and personnel wages, and many people may not be able to persist. The biggest fear of entrepreneurship is to give up after three or four months, claiming that it is a stop-loss. Hearing those live-streaming sales can make a lot of money, and people immediately pull others to do it; hearing that live-streaming sales are no longer feasible, they immediately switch to offline entities. For example, this time, the tax controversy related to live-streaming sales will definitely lead to the closure of companies that have only been established for three to five months.

Fourth, have you benefited others? What benefits does the thing you want to do bring to your customers? Is it that the products you buy here are more reliable in quality? Or is it that you can get better deals on services here? What is the necessity of the products and services you provide for your customers? Compared to others, do you have enough substitutability and differentiation?

Staying put is also a preparation for entrepreneurship

Many people think that only by quitting their jobs and starting their own projects can they be considered entrepreneurs. Obviously, this understanding of entrepreneurship is too narrow.

1. Entrepreneurship is divided into stages What most people understand as entrepreneurship is only one part of it. In fact, entrepreneurship can be divided into five stages: preparation, start-up, adjustment, transformation, and re-creation.

For most of us entrepreneurs, the first thing to focus on is the preparation stage. If you want to start a business, you must first plan ahead, rather than choose to start a business when you have no other options. For example, if you want to open a braised meat shop, it’s not because your boss fired you that you start preparing for it. Instead, you spend time learning braising techniques, location selection methods, customer marketing skills, and most importantly, saving money before starting your business. Whether you worked for one year or three years, this is all part of the preparation time. Entrepreneurship based on desperation and not wanting to work is almost always a failure.

2. Spend enough energy to understand what you want to do I hope that before entering the entrepreneurial stage, you will fully prepare during the preparation stage. For example, if you plan to do e-commerce on Taobao, either attend formal training or work for a well-known Taobao e-commerce company for one or two years. Even if you want to open a small restaurant, you should intern in a few restaurants for a while. Many lucrative industries have skill barriers, such as repairing cars, clocks, digital devices, and home appliances. These are good businesses, but you must be an apprentice for three to five years to do it well.
   
3. Don’t ask others what business you should start Perhaps some people have been inspired to start a successful business by consulting with their friends, but this probability is too small. To be honest, anyone who asks others what entrepreneurial projects they should do or what business they should start is not suitable for entrepreneurship. First, it means that you haven’t figured out what you want to do and haven’t prepared for it, so what advantage do you have? Secondly, if you ask others, their advice based on their resources, abilities, and other factors is unlikely to be suitable for you. Most entrepreneurial ideas are not based on asking unless you have a strong advantage in that area.
   
4. A monthly income of 20,000 surpasses most entrepreneurs’ income Why did I discourage my friend who made 20,000 a month from starting a business? Because achieving a monthly income of 20,000 through entrepreneurship is not a simple matter, and it even beats most entrepreneurs. Many friends spend their days watching Douyin, WeChat public accounts, and paying for various social groups. They always see examples of earning tens of thousands of yuan per month, millions of yuan per year, or tens of millions of yuan. They think that entrepreneurship is so beautiful that they easily overlook the price that the money-makers have paid and their experience in that field.

We have a habit of focusing on the results that others get from their efforts, but we also have a habit of ignoring the efforts they put in to achieve those results. For example, if you were losing 200-300,000 yuan every month, could you handle it? Or if you had to put down a deposit of 200,000 yuan and risk having it confiscated, as well as fronting funds for more than half a month, would you be willing to do it?

Last year, the CPS model for food delivery was very popular, but the payback period was at least 6-8 months, and the upfront costs were significant. Let’s say you want to make 20,000 yuan a month from entrepreneurship. Regardless of whether you are starting a business or working, you need to achieve performance and take risks.

Do you know how difficult it is to earn 20,000 yuan a month from entrepreneurship? Assuming a net profit of 20%, you need to sell at least 100,000 yuan worth of goods and sell at least 3,000 yuan worth of goods per day. If the average transaction value is 30 yuan, you need to sell at least 100 transactions per day. If the average transaction value is 15 yuan, you need to sell at least 200 transactions per day. And remember, the 20% net profit is after deducting all other costs, including water and electricity bills, rent, logistics, discounts, and even labour costs.

This means that the gross profit margin of the products you sell must be more than 20%, and it is not easy to maintain such a high-profit margin under the influence of various e-commerce platforms, social groups, and live streaming. Don’t always indulge in the achievements of others who sell thousands or tens of thousands of items. Have you ever thought about a situation where others don’t sell anything for three or five months?

In fact, a monthly salary of 20-30,000 yuan is pretty good in any city, whether you are an entrepreneur or an employee. If you only earn 7-8,000 yuan a month, you need to ask yourself why you want to start a business. Do you have special skills or the courage to take risks when you have nothing to lose?

As for 2022, it is still unknown.

At least for this year, I do not recommend anyone to start a business because everything is unknown. If you really have an entrepreneurial dream, don’t rush into it. Prepare yourself first by learning, networking, and saving money.

For ordinary people, entrepreneurship must be foolproof, otherwise, it will be irreversible. Only two types of people are qualified to experiment and make mistakes while starting a business: those who already have a successful experience and sufficient accumulated capital, and those who have nothing to lose.