The second of the Ten Commandments: investing in unfamiliar industries

Most entrepreneurs are prone to make a fatal mistake, like to choose the hottest industry at the time, blindly follow suit, but ignore the hottest industry not only the most competitive, but also very likely to be completely unfamiliar with themselves.

The transformational decision of impulse

Before deciding to engage in the catering industry, Liu Yishui is already a model of entrepreneurial approach to success. At that time, he has 3 underwear stores in Chongqing Yubei District, and set up a company, called the regional underwear sales industry leader.

Dramatic changes occurred in the May 2003. At that time, he saw in the newspaper that a famous local food and beverage enterprises in only 3 years to become the top 50 Chongqing famous Enterprises, the owner made 50 million yuan personal. At that time, facing the bottleneck of enterprise management, he was easily tempted. Liu Yishui, who grew up in Chongqing, thinks the restaurant market is very large and fits the local consumers ' habits, so decides to enter the restaurant industry. At that time, he even thought that the big shops all over the street business is booming, so the success of this industry will certainly extremely easy.

An unusual project

The hot pot in Chongqing is very famous, but Liu Yishui thinks there are too many competitors, so he decided to look for a new product to intervene. In a trip to Fujian, he accidentally tasted the Taiwanese famous dish-ginger duck, who soon decided to use the dish as the main dish of the self-employed restaurant.

Is the year September, Liu Yishui high salary from Xiamen please to do Ginger duck chef, invested more than 400,000 yuan, in Chongqing opened a Taiwan Ginger Duck hotel. This light taste of Taiwan, so that people eat accustomed to the spicy taste of Chongqing feel very fresh. About 100 square meters of small shops, almost daily full. The first month, Liu Yishui sales amounted to more than 80,000 yuan, the second month rose to a hundred thousand of yuan, after all generally in 100,000 ~15 million yuan.

Success seems to be within reach, Liu Yishui decided to expand the scale. To this end, he in a local famous restaurant on a street selected a more than 500 square meters of the first floor store, one months later took over the second floor of the store, and re-invested 500,000 yuan to decorate, and in 2004 to open the customer.

To his surprise, the business was suddenly deserted. Whether it is the original old shop or the newly opened model shop, the daily guests are much less than originally expected. In the sacrifice of preferential promotion and advertising and other means but no fruit, Liu Yishui that the taste of consumers has changed, so decided to change to do at that time Chongqing is very popular spicy shrimp.

Unfortunately, the restaurant operating the spicy shrimp in the same area at this time has been everywhere, and Liu Yishui can not find a more powerful chef cook, business naturally has not been. A year later, Liu Yishui finally had to dismiss the workers and shut the shop door.

Comments

Blindly follow the biggest risk, in fact, it is easy for entrepreneurs to ignore the investment risk. Because there are many successful people in the market, it is easy for an entrepreneur to see the success of a successful person when evaluating a project, but it is not possible to observe the inherent risks of the industry itself, especially when the entrepreneur is completely unfamiliar with the industry and the risk is magnified.

Prescription

Before deciding to invest in a project, make sure you understand the following: how the top three of the industry is profitable. Why did the people who left the industry fail? Are you familiar with most of the products (services) in this industry? Whether you have a potential customer resource.

As long as you think through the above questions, it is easy to draw conclusions about whether the industry is suitable for intervention. Of course, the reasonable control of the size of the enterprise is also necessary to consider things. But in any case, it's important to keep in mind that the factors that determine the success of a business are always you, not how successful others are.