When Wu Shengying's wine-selling business failed in 2003, he
abandoned farming in his hilly village in
Shandong Province and turned to an idea that he hoped would
please Chinese palates as much as KFC chicken wings.
Roasted eggs
Almost everybody around Wu, including his wife, doubted he could
succeed, since roasting can easily break an egg without getting the
tastes through. But Wu forged on, and after breaking several
thousand eggs in experiments, he finally worked out a formula that
he believes strikes a perfect balance between temperature and
timing to make good roasted eggs.
"I was in a run of bad luck at that time and was about 350,000
yuan (US$43,500) in debt with the wine business," Wu recalled. "The
rest of my life would be a failure if I could not work out a
project that demands small input but makes money quickly."
Wu's roasted eggs, with a chewy texture but fresh taste, sold so
well at the market that he not only paid off the debt quickly, but
also bought a flat in town and a car. Now he has 310 franchised
partners nationwide, and is still growing.
The roasted egg king's story may never be recorded in a textbook
used in a master of business administration (MBA) program. Neither
is he, at age 39, likely to have a Nasdaq initial public offering
in the near term. But he does represent many entrepreneurial
Chinese who, from humble beginnings, achieve success by relying on
creativity, perseverance and, perhaps, a little bit of luck.
According to a joint survey by the MBA center of China
Agricultural University (CAU) and the National Entrepreneurship
Research Center of Tsinghua University, 48 percent of new Chinese
businesses have start-up funds of less than 100,000 yuan
(US$12,400), and 19 percent of them have less than 300,000 yuan
(US$37,300).
"Many people who want to start their own businesses don't have
much money, and that is one reason they would favor small products
that don't incur too much financial strain," said Fu Wenge,
director of the MBA Center of CAU.
"But if you look at the small businesses in east China's
Zhejiang Province that are making a big share of the world's
buttons, lighters and shoes, it's obvious that small products
generate tremendous business opportunities."
The survey, which sampled nearly 1,000 entrepreneurs in 26
provinces, indicated the most favored start-up trades are low-cost
and labor-intensive restaurants, wholesale or retail businesses,
and processing business. Seventy respondents said their business
idea came from familiar things in their work and lives.
Most people starting up businesses live hand-to-mouth lives, as
the survey indicated 41.6 percent of those starting up a new
business are employees in enterprises and 25 percent are farmers.
The average education level of the surveyed entrepreneurs was
senior middle school.
Another survey, released by Shanghai's labor and social security
administration last November, made a sharper point that most people
who start up businesses are motivated by the need for survival.
About 56 percent of the surveyed start-up business founders in
Shanghai said they chose to take the plunge because they needed to
feed the family, couldn't find a job, or were unhappy with prior
jobs. Only 27.5 percent said they wanted to do something they
enjoy, and 5.7 percent said they saw a precious opportunity that
they could not afford to miss.
Fewer than 20 percent of the start-up businesses have more than
10 employees or annual revenue above 500,000 yuan (US$62,500),
according to the survey in Shanghai.
"To a certain extent, people in financial difficulties may have
stronger desire to change the status quo," said Gao Jian, vice
director of Tsinghua University's National Entrepreneurship
Center.
"But regardless of financial situations and education
backgrounds, business founders have one motivation in common: To
manifest their personal value and be better-off."
David Zou is an example of those able to live well working for
others but obsessed with being their own bosses. After graduating
from the business school of Renmin University of China three years
ago, he got a job in a major State-owned real estate company. But a
year later, after he had familiarized himself with the workflow of
project planning and preparing documents, he felt bored with 9-to-5
office life and quit.
"As a major in marketing and management, I often had some new
and interesting business ideas, and I realized it's impossible to
put all the new ideas into practice considering the competitive
atmosphere and red tape in a big company," he said.
After leaving a couple of other jobs, Zou opened a small company
with several partners a year ago offering service in organizing
expos, seminars and fairs. Although the business is just breaking
even at present, he believes he has made the right choice.
"In the past when I applied for new jobs, it usually took some
mumbo jumbo formalities and then a face-to-face interview with
stereotype questions to answer, and that all made me feel bored,"
he said.
"To someone who has strong business ambitions, starting up his
or her own entity is a step that should be taken before it is too
late."
Twenty-five years ago, when almost all Chinese worked for
State-owned businesses, entrepreneurs like Zou might be viewed as
eccentric. But today they are, in a sense, darlings of a society
that is facing mounting pressure in employment.
According to the forecast made by the Ministry of Labor and
Social Security last year, about 10 million new laborers will flood
the job market each year in the next five years, compared with 9
million new jobs the economy can generate annually.
"A key solution to China's employment issue is to foster
freelance practioners, and small or even mini-enterprises," said
Zhou Tianyong, vice director of the research center of the Central
Party School.
"In that way one who used to need a job may create several
jobs."
Central and local administrations have issued a host of policies
in recent years, including tax breaks and streamlined
administrative formalities, to encourage start-up businesses.
The National People's Congress (NPC)
also revised the company law last year, lowering the minimum
registered capital requirement for a limited company to 30,000 yuan
(US$3,700) from 100,000 yuan (US$12,500), to make it easier to form
a corporation.
Even so, there are no guarantees. According to the Tsinghua-CAU
survey, 48 percent of start-up business founders reported failures
and frustrations. The top three factors for failed businesses were
a lack of liquid funding, bad choice of start-up projects and poor
management, according to the survey.
"Many people choose to start up their own businesses because
they're thrilled by the seemingly infinite opportunities in our
rapid-growing economy," Zou said. "But the real business world is
full of risks and hardships, and even a small lapse in the start-up
period could cost the whole game.
"One should understand both sides of the coin before he takes
the plunge."
(China Daily April 29, 2006)