Chapter 172 The growth limit of private enterprises on August 24

I have been observing and thinking, what are the things that stop the development of private enterprises and limit our pace?In other words, what is the growth limit of private enterprises?How to break this limit? In my opinion, there are four ceilings or growth limits for the development of private enterprises, which are the limits of the external environment, the limits of the organization, the limits of the business model, and the limits of the entrepreneur's capabilities and values. For more than 100 years, China's private enterprises have not grown up and lived long, and their life cycle cannot break through the hurdle of 15 years.Until today, this cycle rate has been broken by companies such as Vanke, Lenovo, and Vantone. Every day these companies live, they will create an extra day in the history of private enterprises.

Feng Lun believes that the growth limit of the development of private enterprises has the following four aspects: The external environment first refers to the market size and market structure of an industry.What kind of water feeds what kind of fish? Taking the Chinese film industry as an example, why doesn't China have Hollywood, or big companies like Paramount or Warner Bros.?Because the market size of the Chinese film industry is relatively small, there are very big limitations.The market size of my country's film industry is about 6 billion yuan, and Huayi Brothers, the largest private enterprise in China's film industry, makes a profit of less than 100 million yuan a year.

There are also problems with the institutional environment in the external environment.In the eyes of some people, movies are not entertainment products, but promotional materials.In this way, there will be some ideological controls (especially the censorship system and the entry permit system), many films cannot be shot and shown normally, and the growth of film companies will naturally be restricted. Looking at the Internet industry, there are currently more than 60 million Internet companies, most of which are private companies, and many large private companies such as Baidu and Alibaba have emerged.Therefore, when the market is highly open, the trading system is very flexible, and when there are few "fences", many startups will appear in this industry, and the growth limit of enterprises will not be easily restricted.

The government's control methods have also caused the growth of many companies to limit.The entire system and system have created many ambiguous areas for the growth of enterprises, making it impossible to grow.Therefore, as far as the external environment is concerned, the growth limit is restricted by the industry's market size, market structure, and institutional environment in which industry you choose.Since there are many such constraints and influences, it becomes more important to break through the growth limit of private enterprises by breaking the internal ceiling. From an internal point of view, the first thing to do is to break the limits of the organization. Whether a company can grow or not depends on organizational changes and institutional arrangements.

When Feng Lun went to Sanya, he met a private enterprise owner. He was most proud that his company had not failed in Sanya, Hainan for 20 years.But today his company is still the same as in the past, a leather bag company with only two people and no reports.Loan a batch of money, stay with the leader for two days, and when the money is gone, borrow another sum of money, and stay with the director for a few days.The organizational form of their company is no different from when the company was first established 20 years ago, and there is no essential growth. Another iconic figure like him, Liu Chuanzhi, has changed four or five pieces of clothes in his organization, from state-owned to private companies, to limited companies in Hong Kong, to listed companies, to joint-stock companies, and then to multinational organizations. It is still researching and changing.

At different stages of development, many private enterprises will not grow if they do not change their organizational systems in a timely manner, introduce new capital, create new and better governance structures, and introduce professional teams. The organizational transformation of private enterprises will never stop, and the development space must be continuously improved through transformation to create new unlimited development. The business model actually determines how big the company can grow.For example, if your business model is to open restaurants sporadically, it will not be big, but if you change it to the chain operation of McDonald's, you will get a lot of market space.

Taking the real estate industry as an example, the business models of real estate are generally divided into three types: the earliest common business model of real estate was "landlord + foreman", followed by "factory manager + capitalist".Up to now, after New York's GDP has grown to 60,000 US dollars, the main business model of real estate is the "director + producer" model. In addition, the IT industry is also very interesting. The manufacturing industry in the IT industry, such as the profit of PCs may only be about 2%, while the gross profit of online games is 80%.The former is very sensitive to costs, and the marginal profit is very low, while the latter adds millions of users to one server, the marginal cost is almost zero, but the marginal profit is extremely high.Therefore, from the perspective of business model, the former has its limit no matter how big it is, while the growth of the latter is almost unlimited.

Therefore, you must pay close attention to whether the business model of your company and industry has created a ceiling for you, preventing you from breaking through and preventing you from growing into a good and large company. Most of the current private enterprises are still the first generation of entrepreneurs. In fact, the ability of entrepreneurs sets the growth limit for this enterprise. Some things are caused by history and environment. For example, Liu Chuanzhi and the entrepreneur mentioned above are two extremes.Liu Chuanzhi's father is a lawyer. He himself graduated from the Xi'an Military Telecommunications Engineering Institute (now Xi'an Dianzi University), and has worked in the military industry and the Academy of Sciences for a long time.Against such a background, Liu Chuanzhi is very capable as an entrepreneur. He is based in Beijing and has smooth information channels, so he has a natural advantage in carrying out organizational reforms.And another entrepreneur is in a small city, with a primary school education, and the ability of self-continuous learning is not outstanding, which limits his development.So this entrepreneur has become a historical fossil, and Liu Chuanzhi's story has continued to this day and is still going on.

No matter what kind of entrepreneur you are, you have your own limitations. Only by continuously breaking through the limits of your own capabilities can you break through the growth limits of the enterprise.In order to break through the limits of his abilities, Feng Lun also insisted on observing and studying all over the world.If you can go one step further, see where others cannot see, and find certainty in the uncertainty of the market, then you can stand in the future and arrange the present. Among the capabilities of entrepreneurs, besides commercial capabilities, values ​​are also a kind of capability.Some private entrepreneurs have very outstanding commercial capabilities, and the enterprises have grown very large and developed rapidly. However, enterprises and entrepreneurs are not respected, which has a negative impact on the development of enterprises, and may even cause sudden death.Entrepreneurs like Liu Chuanzhi, Wang Shi, and Ma Yun are not only respected personally, but also bring moral strength to the development of enterprises.

The transformation of organizations, the creation of business models, including the choice of the external environment, are inseparable from the entrepreneur's personal ability, which puts forward high requirements for private entrepreneurs to constantly break through their own ability limits.Private entrepreneurs can break through the growth limit of private enterprises only if they constantly break through their own capabilities and limitations.