Too many families in China, without real planning, research, and understanding – invest their life savings into a small business for their children: But crash and burn – loose it all in matter of months. You see them come and go: celebrate their opening, and sometimes in little as 5 months they quietly fade away!
Carlo Turk (卡罗特): To be honest David. That isn’t only the SMB sector. I know also bigger companies that start good, but then they enter for example the European market.
What happens, they crash and burn. Reason, Europe is totally different with doing business, culture, laws etc…
And then it goes wrong. Except those who are smart to consult European business people or have people who study on European university. They did research etc.
But I know what you mean with “China need education programs for SMB”.
They never learn to do research before starting something. They jump in the darkness and count their blessings that it will work..
Betty Xiang: I agree with you, David. Families in China definitely need to be better educated in business, financial planning, time management, and even risk management. However, those valuable lessons are not covered in any curriculum that is offered in schools or higher education in China and unfortunately they don’t play an important role in Chinese culture either.
Deependra Sah: I fully agree with you guys!
jinying brunda: plus normal people start with small business mainly they loose job, but they need looking after family, so jumping in dark whole, even small business program must start from government funding and force to do it!, Does the China government staff consider this? or themselves?????
Roland Adriano 陶小菲: Many family businesses in China experience this. I worked for a local company with its investors mostly family members and extended family members. I saw a few businesses around our neighbourhood (I’m living in a very localized community) which starts big and failed big as well. But one thing I noticed is the lack of research (as mentioned by Carlo). True enough. Many of them are more reactive rather than proactive. Worse that they even overlook their current resources. They invest small, aspire so big and expect really high the soonest. Bubbles burst, when it does, it really hurts.
Thomas (Tom) Hoskinson: Truthfully, not much different than the rest of the world. Many a great cook thought they should own their own restaurant but have no idea what is required. They see the cash coming in and think it is theirs – oops, forgot about rent, supplies, equipment, labor, taxes and the rest of it. No different in many other small businesses. Always seemed like a good idea at the time. Running a small or medium sized business is hard work, takes disposable capital and is not for the faint of heart or those who don’t wish to put in the time to understand what they are getting in to or what they need to know before they take the leap.
Courses on entrepreneurship are becoming more and more popular as is entrepreneurship as a college major.
While some will have a brilliant idea and succeed despite their poor skills, most will not. Somewhere around 80 to 90% of new restaurants fail in the first few years in the US. Across all business sectors, 56% of new start-ups are gone in 4 years in the US.
Gracen Duffield 田恩慈: In the United States, there was a program called Junior Achievement that promoted entrepreneurship for teenagers in high school. It really helped kids learn the basics of running a business. Adult learning is similarly most effective when it is a learn-by-doing process, aided by workshops and mentoring. The challenge in China is that it has developed so fast that there are inadequate resources to provide mentoring on the large scale that is needed.
Distance learning is not popular in China, but this is one of the applications where it would come in handy. If the major education institutions could promote business learning via television, Youku, or some other remote media delivery, perhaps it would be possible to provide mentoring via social media. It is a large gap that would take considerable organization to accomplish, but one that needs to be addressed.
Thomas (Tom) Hoskinson: @Gracen. An excellent suggestion. Junior Achievement continues to educate and serve students from elementary school through high school. I was one of their consultants years ago and worked as a volunteer on a pilot program called “project business” in Michigan. It was a great way to teach kids about entrepreneurship.
Dennis Wagaman: I could not agree more with David. Unfortunately, we see this phenomenon of severely lacking in education about overseas markets all to frequently when working with our exporter clients in China. Also, agree with Aimee that our experiences are that significant cultural differences abound that contribute to a wide gap in understanding of business practices outside of China. Additionally, and quite frankly; there is a stubbornness that exists with many exporters and manufacturers in China. To their detriment, many exporters simply do not want to accept that business practices, procedures and laws outside of China are vastly different that those within China. When entering the China market, outsiders need to adapt and accept the differences in business practices and the cultural differences to be successful. Likewise, China business is well advised to start thinking in the same manner if they want to succeed. Let’s face it: the reality is that the old days of China manufacturers and exporters making too much money simply due to offering the lowest price in the market without a high regard for quality are long gone. To sustain in today’s marketplace, China manufacturers and exporters must upgrade their business management practices or they will not survive.
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