Have you noticed?
After many entrepreneurs failed to start a business, they did not lose a little money, but lost everything, or were heavily in debt!
Why is this?
Because everyone has made one less preparation before starting a business!
As long as you make this preparation, no one can lose so much!
Let me first tell you a story about my own entrepreneurship. Lose 3 million a year!
In 2006, I suddenly had the idea of ??making a discount website.
It is a website that puts together discount information from all stores and merchants, similar to the current Meituan.
I gave the website a name: Zheshangzhe.
I also registered a trademark and designed a LOGO. The LOGO is a green caterpillar, because the body of a caterpillar is folded like this.
I made some money making mobile phones at that time. Because I had money, I started doing it without thinking too much.
Started renting servers to build websites, and started forming a team for offline promotion.
At that time, the company's costs were very high, about ten or two hundred thousand a month. At the beginning, I didn't pay much attention to the cost.
About half a year later, I guess 1 million had been burned in, and the company had no income. I suddenly felt that this was not going to work.
Then I started to think of ways to make money. I sold membership cards and made DM magazines with discounts. Anyway, I tried every way I could think of, but I still lost money.
In the end, all the money was lost, the office rent could not be paid, and the employees’ salaries could not be paid!
As soon as I gritted my teeth, I sold the house I had just bought in Senyuxingyuan, Haizhu District, Guangzhou!
At that time, the house was bought for 100 square meters and 4,980 per square meter. I just checked online and the price is now 36,000 per square meter!
Not two months after the house was sold, the company ran out of money again.
I really can’t come up with the money to pay the rent at the end of the month.
The landlord sent a few men over to lock the door of the company. When they came, their men also brought several large electric batons.
I guess they may have encountered conflicts with tenants before when they locked the door for payment.
The company office door was locked and employees could not go to work, and the whole company began to panic!
Then I called everywhere to borrow money, tens of thousands from this one, hundreds of thousands from that one, to maintain the company's operations.
Finally one day, one of my subordinates told me: Mr. Jin, there is no hope for the company to do this. Let’s not do it.
I woke up immediately.
I took inventory of assets, paid employees’ salaries, and sold company items.
I lost more than 2 million in cash and more than 1 million in debt. I lost more than 3 million in this entrepreneurial project.
In 2007, it was more than 3 million. At that time, you could buy 6 or 7 houses in Guangzhou with full payment.
I experienced my first huge failure since I started my business and suffered heavy losses!
After the failure, I have been reviewing and reviewing, and I have been thinking why, why?
Why did I persist for so long when I didn’t make any money or lose money when starting this business?
Why would I sell my house and continue my business after I lost so much money before starting this business?
Why don’t I give up even after the house is sold and all the money is lost, so I still need to borrow money to continue working?
Later I discovered that everyone has a fatal weakness!
Loss of 2.7 million in one year!
At the end of 2007, after I closed the company, I did not return to my hometown.
What home should I go to? I have no money and no shame to go back.
I stayed in Guangzhou to look for a job, and I found a job doing telephone sales in a securities investment consulting company.
This company provides securities consulting services to shareholders.
I remember that there was a stock in the A-share market at that time, 600150 China Shipbuilding.
I remember clearly that the highest price of this stock in 2007 was 300 yuan per share. One of my clients happened to buy it at around 300 yuan.
Heavy position, bought 10,000 shares, invested 3 million.
At that time, A-shares had been falling all the way since the high of 6124 in October 2007. The market was very bad and had entered a bear market.
I called this customer and said, brother, sell it.
At that time, the price of this stock was 250.
He said: If I don’t sell it, I will lose 500,000 yuan, so I won’t sell it.
Within two months, the stock fell to 200, and I called him again.
I said: Brother, it has dropped to 200 now, sell it.
He said: Not for sale! I didn’t even sell it for 250, but if I sold it for 200, wouldn’t I be sick?
Another two months later, China Shipbuilding Corporation fell to 100 yuan per share. The stock purchased by this customer for 3 million yuan is now only worth 1 million yuan.
I called and said: Brother, there is no sign of the market improving now, you should sell it.
He said: Brother, I have lost so much, and it is even more impossible to sell it.
In the end, this customer left the market at a price of around 30 yuan, resulting in a loss of 2.7 million yuan in less than a year!
The weakness of human nature!
After these two things, I discovered that people-all have a weakness!
That is, for something that you have invested time, money, and energy into, even if you know that the future development will not be very good, you still don’t give up!
This is true for entrepreneurship, this is true for investment, and this is true for relationships!
People always imagine that things may get better one day. Although this possibility is slim, people still have a glimmer of hope.
It turns out that things that don’t work at the beginning usually only get worse later!
Later, I learned a concept in an investment consulting company:
Stop loss!
Stop loss is also called "cutting", which is a term in the securities industry.
When the loss of a certain investment reaches a predetermined amount, the position should be liquidated in time to avoid greater losses.
The purpose is to limit losses to a smaller range when investment mistakes are made.
Later I discovered that the words stop loss are applicable in various scenarios in life, and it will reduce many misfortunes in our lives.
For example, when starting a business, you set a time and amount for yourself, give up decisively when you reach that line, and stop the loss in time!
This will prevent us from losing everything or being in debt if we fail!
When investing, you set a certain amount and ratio for yourself. When the loss reaches that level, you will be out decisively and stop the loss in time!
This will prevent us from suffering huge losses.
In anything, as long as you are prepared to stop losses, you will not lose too much!
The risk of making a desperate move is too great!
So I hope that the concept of stop loss I shared today can penetrate into the heart of every entrepreneur.
When starting a business, if the project fails, you should stop the loss in time!
As long as we don’t lose everything or are in debt, as long as we still have some capital in hand, we have a chance to turn around.
Without capital, it is really difficult to turn over!
As the saying goes: If you keep the green hills, you won’t have to worry about running out of firewood!