Hello Everyone,
I’ve started this blog to document my daily life, share insights about making money, and discuss meaningful and philosophical topics.
Today, I want to talk about why I decided to start a new business.
A few years ago, I established a chicken slaughterhouse factory in China, producing various chicken products. This factory operated for about ten years. We invested millions of RMB into it, but in these ten years, we hardly made any profit. Instead, we accumulated significant debt from bank loans and personal loans. The stress and pressure have been overwhelming, compounded by several lawsuits related to the company’s financial issues.
Over the years, not only did we fail to repay much of the bank loans, but we also ended up borrowing even more. If I had the chance to choose again, I probably wouldn’t opt for entrepreneurship. It’s just too hard.
I’ve reflected on the reasons why we didn’t make money, and here are some key points:
- Lack of an Experienced Team: After the factory was built, we didn’t have a team that understood production and marketing, leading to many costly mistakes.
- Small Scale of Operations: Our factory was small compared to others in the industry, resulting in higher production costs and minimal profits. This industry operates on thin margins, making only a few hundred RMB per ton of goods sold.
- Outdated Machinery and High Labor Costs: We couldn’t afford to update our machinery, and relied heavily on manual labor. Over the years, paying wages has consumed half of our expenses.
These ten years have seen losses amounting to tens of millions of RMB.
Now, the chicken slaughterhouse has stopped production. We’ve taken what little money we had left to invest in a new factory, focusing on primary meat processing.
So, why keep moving forward and investing in another factory? Here are a few reasons:
- Utilizing Idle Resources: Without a new project, our resources would remain idle.
- Maintaining Our Investment: We own the land where the factory stands. Even if the factory isn’t operational, we still need to pay for security and basic utilities like electricity.
- Repaying Debts: This is the most crucial reason. We have debts that need to be repaid.
In China today, earning a substantial income through regular employment is almost impossible. Entrepreneurship seems to be the only way to have a chance at financial success. However, the current economic environment is tough. We have no choice but to keep moving forward.
In this entrepreneurial series, I will record everything from designing the packaging to the final product. My goal is to provide a transparent and detailed account of the entire process, including the challenges we face and the solutions we find. This series aims to share insights and lessons learned, hoping to inspire and support others who are on similar journeys.
