Chapter 21 Chapter 20 Small Business "Snowball" Road

After the business survives, all the small entrepreneurs have to do is to find the way to "snowball" their business.Starting a small business, and then snowballing the business from small to large, from weak to strong, is a story that many self-made entrepreneurs have performed.If you want to change from an entrepreneur to an entrepreneur, you must have the spirit of continuous improvement, lead employees to unite and work hard, pay close attention to product quality, be honest in service, and be a reassuring enterprise. enterprise. In the field of competition, judging whether an athlete is great or not depends not only on his brilliance at his peak, but also on his stability and ability to replicate himself.The same is true in the business world.The greatness of GM is not only that it has ranked first in the world's wealth list for five consecutive years, but what is even more terrifying is that it is one of the best in almost all expansion fields, and its ability to replicate new industries is unmatched.Whether it is Wal-Mart or Gome, the success of its chain model depends on the self-replication ability of a single store.

The single store copy mode adopted by the enterprise in the development process can also be called the whole store output, which refers to the investment including store opening investment, store location selection, in-store products, store image, decoration style, personnel training, product display, operation process, cash register, etc. System, financial analysis, logistics system, sales promotion mode, new product launch and other projects involving various aspects of chain store operation, management, personnel, etc., all of which are implemented by the operation headquarters to implement a unified store opening business model.Simply put, it is a complete copy of a successful store.The output of the whole store fully guarantees the market competition and sustainable profitability of a single store, and fundamentally protects the interests of investors and consumers.

It is always the wish of every business founder to become bigger and stronger quickly, but only by down-to-earth summing up a set of "simplified, standardized, and modular" single-store profit model can your dream come true.Only on the basis of a replicable single-store profit model, measuring the existing number of single stores and the number of single stores expected to be opened in a certain period of time in the future is the key to whether the business can be "evergreen". The leader of the fast food chain, KFC, also experienced 10 years of exploration in China before it gradually began to let go of franchising in third- and fourth-tier cities.Moreover, the "overall single store transfer model" it implements has additional conditions, such as the transferred single store must have achieved profitability, and the team must be complete.The reason why KFC adopts such a model of transferring the entire store and the entire team is because it realizes that if it lacks a single store profit model, it will only have a negative impact on the brand if it rashly launches a chain franchise.

Get Oversubscribed Ramen Shop A small bowl of ramen has created a market value of 7 billion.The success of Ajisen ramen has envied many ramen colleagues.How did Pan Wei, the head of Ajisen Ramen, in his fifties, create a new world for the traditional ramen business? At that time, Pan Wei, who was just in his early 20s, quit his first job and started his own food trade, which lasted for 10 years.She travels all over the mainland, her scale is getting bigger and bigger, and she has her own factory buildings and equipment in the mainland.Pan Wei is not reconciled to just doing trade. She wants to find food items with greater cash flow, so she investigates around the world to find delicious food.In Japan, Pan Wei ate Ajisen ramen and was attracted by the bone broth.Relying on her resources in the Mainland, factory advantages, and her dealings with the food industry in the Mainland in the past 10 years, she finally won the agency right of Ajisen Ramen.Moreover, what Pan Wei won was not only the brand agency rights, but also the production of some ingredients in mainland China and selling them to Ajikata in accordance with the requirements of Japan. This is a very stable business for Pan Wei.

In 1997, the first Ajisen ramen shop in the mainland opened in Shenzhen, and it made a profit that month.Therefore, Pan Wei quickly started the road of chain expansion.Another 10 years, Pan Wei once again achieved success in the food industry.According to Ajisen's 2007 annual report, Ajisen Ramen has entered 17 provinces and more than 40 cities in China, with a total of 323 outlets. After the success of the brand, many chain enterprises often adopt the business model of franchising to expand, but Pan Wei has not chosen the road of franchising for a long time.She is mainly worried about "smashing" the brand due to factors such as quality decline and difficulty in management.Behind the rapid expansion of Ajisen, it highlights Pan Wei's innovation in the food chain industry.This innovation first comes from standardized operations, because chain operations are usually combined with "standardized services" and "industrialized production", but for a ramen chain store, how to standardize is a test.But Ajisen did it, and after Ajisen, chain food stores with standardized operations sprung up like mushrooms.In addition to location selection, Ajisen’s stores are almost always located in lively prime locations. Although the price is high, it brings a high “turnover rate” and brand added value.

In March 2007, Ajisen was listed in Hong Kong, which was subscribed 192 times and raised US$250 million. In 2008, its market value was about HK$7 billion, of which Pan Wei accounted for 53.26% of the shares.In fact, being oversubscribed in the restaurant industry is the stuff of legend.The biggest secret of Pan Wei's success lies in the realization of a standardized operating model.She believes that after the operation model is standardized, a single store can be easily replicated, and then it can enter the stage of rapid annual expansion. When a small store makes a brand, it can grow like a snowball.The reason for adopting the model of single-store copying is that it will be more competitive and profitable.However, it should be noted that if there is no standard and reproducible single-store profit model, do not easily replicate it.Only by starting with the study of a reproducible single-store profit model can the company's rapid expansion go on for a long time.

Franchising is the fastest growing business model in the retail industry.In the eyes of many people, compared with the direct-sale chain, the franchise chain has broken through the bottleneck of capital, manpower and channel restrictions of the direct-sale chain, and its advantages are self-evident.Moreover, for franchisees, franchising can make full use of brand resources, establish a strong chain monopoly operation network, and effectively increase brand awareness; for franchisees, franchising can reduce investment risks, expand sales performance, and shorten market introduction. period, and has the profit guarantee of the franchisor.The key point is that the franchisee's local connections can be used.Compared with being your own boss and just working for others, there must be a big difference in service attitude and service quality, which directly leads to the difference in sales performance.

Franchise chains can not only leverage on expansion and solve the problem of enterprises becoming bigger and stronger, but also provide investors with a mature brand resource that can be used, as well as early training and management models.However, if a small business wants to adopt the method of franchising in the process of expansion, it also needs to meet certain conditions.Among these conditions, the franchisor's own strength is the first to bear the brunt.Have brand awareness, have distribution capabilities, have rich experience in various management work, and have a high market share in their own field.Such a franchisor can be attractive to franchisees and can dispel their concerns.

But on the other hand, for the franchisor, there are also certain risks in franchising.After the rapid expansion of the number of stores, how to ensure product quality, how to maintain the price system, how to make the management smooth, and how to deal with the domino effect caused by the unfavorable operation of franchise stores, all need to be considered, and also need the guarantee of strength and system.In essence, these issues are two different managements from running a single enterprise, and the franchisor must be prepared in terms of manpower, financial resources and systems. The Ups and Downs of Little Sheep

Remember how beautiful the Little Sheep was in 2001?In order to quickly occupy the national market, Little Sheep has determined the franchise policy of "mainly franchising, focusing on direct sales".Provincial, municipal and county-level general agents have been set up all over the country. Except for the direct sales strategy in Beijing, Shanghai, Shenzhen and other key cities, agents develop franchise stores in other cities.As a result, by 2004, in just over three years, the number of franchisees had grown to 721.At this time, the problems began to be fully exposed. The most typical ones were the continuous decline in profitability of single stores, low level of management of single stores, and poor service quality.From the perspective of franchisees, the situation gradually got out of control, and franchisees began to cut corners and even fake and shoddy.For example, franchisees began to violate laws and disciplines, started not to uniformly distribute, privately purchased low-priced beef, and did not uniformly implement company policies and activities, etc., and the company's profit source began to be lost.

Then, the brand image of "Little Sheep" began to be damaged. For example, there were negative reports in the media. Consumers began to question the authenticity of the Little Sheep store. Consumers began to dissatisfy with its service and taste. A large number of counterfeit brands such as "Yang" and "Little White Goat" have appeared. At this time, the company began to cut its wrists, adjusted its franchise strategy, began to summarize the profit model of a single store, began to strengthen the management of the headquarters, and began to close unqualified franchise stores.After more than three years of internal adjustments, the franchise began to be gradually released.By 2007, the number of franchised stores had increased to 326, and the number of directly-operated stores had increased.Gradually, Little Sheep regained its former brand effect and won its position among catering brands today. The uncontrollability of Chinese food standards makes it difficult for Chinese food companies to expand their chains.It is precisely because of the inadequate implementation of standardization that Little Sheep "stopped" the chain franchise at the end of 2003, and the number of stores also dropped sharply.Similarly, the time-honored Chinese brand "Tianjin Goubuli" also suffered serious damage to the brand image of "Tianjin Goubuli" due to the loose standardized management of franchise stores in various places.The fundamental reason lies in whether the management model has a controllable standard. According to the report of Euromonitor Information Consulting, with Yum! Brands and McDonald’s occupying the first and second place in the list of Chinese catering companies with 16.5% and 7.5% market shares respectively, the vast majority of Chinese local catering companies are in the market. Small businesses with a share of less than 2%.Quanjude ranks seventh in this big ranking, with a market share of 1.5%. Due to the different standards in different places, the good and the bad are mixed, and the time-honored domestic restaurant chains have withdrawn their franchisees at high prices. On the contrary, KFC has lowered its franchise fees from 8 million yuan to 3 million yuan.The success of KFC lies in its excellent product standardization, which is also the capital for KFC to dare to expand rapidly on a large scale.On the contrary, Chinese enterprises are much weaker in this respect, and this is exactly what you need to take as a warning if you intend to adopt this loose management model. Diversification, also known as diversification or diversification, refers to the strategy of a company operating multiple different businesses simultaneously in multiple related or unrelated industries.In recent years, this business model has been a key topic of research in the theoretical and business circles. Judging from the current research situation, there are two completely different views that are at odds with each other: one believes that using existing resources and carrying out diversified operations can avoid risks, realize resource sharing, and produce the effect of 1+1>2, which is a modern enterprise. The only way to develop.The other thinks that the diversification of enterprises will result in the dispersion of human, financial and material resources, increase the difficulty of management, and reduce efficiency. In fact, diversification, as a business strategy and method, is not inherently good or bad.The key to the success or failure of an enterprise using this strategy lies in whether the external environment and internal conditions of the enterprise meet the requirements of diversified operation.If the two match, you will succeed, otherwise, you will fail.So, is diversified management a pie or a trap? GM's Road to Diversification Founded in 1879, the Edison Electric Lighting Company was the predecessor of General Electric.During the Edison era (1879-1892), the Edison Electric Lighting Company and the Thomson Houston Company merged to form GE.The latter produces AC appliances, which are related to the former's production of DC appliances.This shows that GE was a vertically integrated enterprise of power production and application when it was established. During the Coffin period (1892-1922), GE expanded its product line to all fields of application of electricity, such as: electric locomotives, transformers, fans, steam turbines, small appliances (toasters, electric ovens, electric irons, etc.), motors, etc. , so that GE has become a diversified enterprise with the axis of power production, transmission and use. During the period of Younger Swope and Wilson Reed (1922-1950), GE stepped up the pace of diversification, greatly increased its product categories, and successively entered the fields of plastics, engines and major appliances. During the Cordina period (1950-1963), GE entered the fields of nuclear power generation and aerospace.Cordina led GE to grasp the vigorous development of new markets and technologies after World War II. Inspired by the slogan of "full sprint", GE developed new products and new markets, and its scale increased by 20 times, becoming the United States Largest Diversified Enterprise. During the Borch period (1963-1972), Borch and the GE Growth Committee summarized nine growth areas of the U.S. economy, and formulated a strategy for the comprehensive development of the nine industries, "to exceed the growth rate of the gross national product."Its performance is that GE's internal departments have increased to more than 350, which belong to 46 competitive "enterprise strategic business units". During the Jones period (1972-1980), the main industries in which GE operated were: mining, petroleum, mining and refining, lighting equipment, central air conditioning, cables and vehicles, electrical machinery, power transportation, turbines, industrial electronics, plastics, engines, medical equipment , financial services, factory automation equipment, etc.There are a total of more than 60 large and small industries, which can be called a typical large-scale diversified enterprise. The Welch period (1980-2001).Welch recognizes that growth in major markets has slowed, technology has accelerated, and global competition has intensified.For this reason, he led the company to restructure the industrial platform, maintained a rapid growth for 20 years, and is still showing a strong growth trend. Welch's industrial adjustment idea is manifested in such an evolution path: coreization and specialization. In fact, GE is composed of more than 20 industrial groups, which are highly diversified from the perspective of a large group, but the industries of each industrial group of GE are relatively concentrated, that is, each industrial group is specialized, and each industrial group is is fairly self-contained.This shows that GE is a diversified group virtually integrated by specialized industrial groups. GE's business model is highly diversified and has achieved great success.But don't forget Welch's classic principle: number one number two.In all the industries that GM is involved in, GM is the top few.Microsoft can claim that it "either do it or do it is the best", because it is the leader in the software industry, and this is its capital. It is generally believed that an enterprise should start to consider the issue of diversification only when two conditions are met: first, the enterprise has achieved absolute or relative leadership in its main market; slowing, competition intensifies, and profit margins fall.Unfortunately, many people only think of the second article when they think about it, and ignore the first article intentionally or unintentionally.Therefore, the diversified decision-making considered in this environment must be marked with a question mark. Generally speaking, there are two types of diversification, one is cross-industry, and the other is limited to the same industry.But no matter what it is, business initiatives will inevitably bring some degree of risk.In foreign countries, GM was the first to blow the horn of diversification the loudest.In addition, there are Intel, IBM, Microsoft, Samsung, etc., which are successful in diversification. Each of them is a model for domestic companies to learn from, and the power of role models is fully reflected here. But from a global perspective, diversification is not the mainstream business model.Among the top ten Fortune 100 companies in the United States, only GM is a cross-industry conglomerate.Diversified management is a greater risk for enterprises, and it also poses a severe challenge to the operation and management of enterprises.Successful diversified management can give full play to the overall advantages of the enterprise and disperse the risks of the enterprise.But the premise of this ideal state is that each of the diversified categories must be among the best in the same industry.If this is not possible, the purpose of risk avoidance will not be achieved if the funds are dispersed in several industries and involved in many categories.If each category does not take the lead, once the economic downturn, it will face the danger of being eliminated, and even drag down the entire enterprise.Shi Yuzhu's "giant" is a lesson for the past. There are still a large number of giants who also died of diversification, and the list is expanding every moment. Regardless of whether "diversification" is a trap or a pie, it actually varies from person to person. The key depends on whether the company has the conditions for diversified operations.Even if this condition is met, attention should also be paid to correctly handling the relationship between expansion mode and enterprise resources in the management process.It is also necessary to constantly adjust the company's diversified business policy, and to make the diversified businesses good enough, so as to increase the stability of the company's operation process, otherwise, it will only turn the pie into a trap. In the "caterpillar experiment" of psychologist John Farber, the caterpillars that were connected end to end in a circle walked around the edge of the flowerpot for seven days and seven nights, and finally died of hunger and fatigue. But there is food not far from them.It is the caterpillar's habit of sticking to precedent and experience that led to this tragedy. If a caterpillar breaks the trail to forage, the situation will change.This phenomenon of failure due to following is called the "caterpillar effect". Dear Entrepreneur, Are You That Caterpillar That Trails?Has your business ever fallen into a deadlock in development due to the "caterpillar effect"?How can we successfully avoid the "caterpillar effect"? People often develop inertia in their thinking and think about problems according to fixed ideas, which makes their work fall into a dead end.Those companies that have no sense of independent innovation in the market and can only be followers will soon fall into a deadlock in development.And those entrepreneurs who invest in a muddle-headed way without subjective rational judgment when they are not familiar with the situation, the market, consumer psychology and market demand and other objective conditions, the most likely result will be investment. Failure, severe cases will lose everything. For entrepreneurs, blind obedience is a fatal mistake.Entrepreneurs with a blind obedience mentality are extremely dangerous in a business war, and they are always in danger of being wiped out. If you want to overcome this kind of psychological misunderstanding, as an entrepreneur, you must first have your own opinions. You can't be like "the grass on the wall, the wind blows on both sides", and you can't hold a skeptical attitude towards everything, which will lead to hesitation and eventually miss out. opportunity.Secondly, you should reduce your excessive desire for success, keep a clear head, don't be afraid of failure, believe in your own objective analysis, and do what you should do. walton broke the convention When Walton and his partners had 15 Franklin 10-50 cent franchise stores, a new format emerged, the early discount stores that appeared in urban areas.With his unique keen eye, Walton saw that similar stores might have development potential in rural and small town markets, but his proposal to his partners to open discount stores in small towns was rejected.According to the common sense of the American retail industry, it is not feasible to open a discount store in a small town with a population of less than 50,000 people, but Walton broke the convention with amazing courage. In 1962, Walton and his brothers opened the first Wal-Mart discount store, and since then it has continued to expand and gradually become a prairie fire. When the chain trend prevailed around the world, and traditional chain stores highly concentrated their operations, pricing, and promotional powers at the company level, "Wal-Mart" once again pioneered the opposite.The cross loading and unloading method of Wal-Mart logistics management center is to reverse the demand control logic, so that customers can pull products at the time and place they need, so as to truly meet customer requirements most effectively. Walton's breaking convention is also reflected in the extensive application of the latest technology and information systems.Walton's early service in the Army Intelligence Corps made him pay special attention to information communication.In fact, in the huge group buying and selling network of "Wal-Mart", the information-based high-tech contact methods represented by satellite communication and computer management play a pivotal role. In the early 1980s, when other retailers were still digging into the "informatization" problem, "Wal-Mart" cooperated with Hughes Company and spent 24 million US dollars to build an artificial satellite, which was launched in 1983. empty and enabled. "Wal-Mart" has spent more than 600 million US dollars to build the current computer and satellite system.With the help of this high-tech information network, the communication and business processes of various departments of "Wal-Mart" can run quickly, accurately and smoothly. Today, "Wal-Mart" is still growing rapidly with its unique vitality and amazing speed.Experts predict that in the next five years, the chain group will continue to expand at an average growth rate of 18%.The evaluation made by Martin Teanzi, general manager of Pacific Connection Company, is pertinent, "Just like what it has done in the United States, Wal-Mart will change the situation of the world's retail industry." Walton's approach to opening discount stores in rural areas well embodies the enterprising spirit of pioneering and innovative.His success lies in the fact that he did not blindly follow other people's views and practices, but invested decisively after choosing a project he thought was feasible.The enlightenment he and his success brings to us is that entrepreneurs must overcome blind obedience before investing, and must overcome hesitation after choosing an investment plan to invest decisively. The market is a huge ocean, which is ever-changing at any time, and the information from the market is therefore varied in thousands of ways.Some popular information often makes many people flock to it, rush to it, follow suit, and follow suit.As everyone knows, there is always a limit to the market share of a commodity or project.If everyone is keen to do a certain kind of business, the market will be saturated very quickly.Therefore, smart people seldom run behind others, because they know that blind obedience is the most taboo in business.When a certain transaction is "hot" in the market, you have to observe patiently and wait for the opportunity. Maybe the hot spot will disappear soon, or it may just start, but you must see it before you act.If you can stand on the sidelines of popular information and do the opposite, you may be able to get ahead.