Law 1: The main obstacle to distributor development is the 'founder trap.' In the early stages of entrepreneurship, the founder's courage and determination are the raw forces that sustain the business in its most fragile state. At this point, the company's growth hinges on the boss's every thought; 'I' (the boss) is greater than 'we' (the company and its people), and 'we' is determined by 'I'. The boss's style, charisma, and consciousness dictate everything. At this stage, the company's development relies on the boss seizing opportunities on the front line, and in a sense, it depends on the boss 'playing speculation' and 'playing tricks.' When the company reaches a certain scale, it falls into the 'founder trap,' where the spiritual strength that once supported the company's development may become an obstacle to its continued growth. Because as the company expands, the relationship between 'I' and 'we' undergoes subtle changes. Previously, the boss was the absolute pillar of the company; without the boss, nothing could function. Now, the boss's role has greatly diminished; many things are done without the boss's knowledge. Previously, decisions might be made solely by the boss, and even if the boss wanted to consult someone, there was no suitable person. Now, a proper decision-making team may be needed, and the boss must promote democratic processes. Previously, the boss's core team consisted of a few loyal 'henchmen' who had started the business together. It was common for these 'henchmen' to be scolded mercilessly by the boss and still feel proud, because in the 'gangster-style management' system, being scolded was a form of 'favor' from the boss. Now, professionals and professional managers have become the backbone of the company. They can tolerate criticism but not being scolded. A boss of a large company once said, 'I can scold those who started the business with me, but I never scold those who wear glasses.' He meant that intellectuals with glasses have thin skin and cannot be scolded. Previously, the boss managed everything directly, with all policies, systems, plans, profits, and losses stored in the boss's mind. Now, management levels have increased from one to two or three levels; management requires systems, actions require plans, and profits and losses require accounting. Previously, the boss's word was the company's rule. Now, the boss must lead by example in following the systems he or she establishes; otherwise, the systems become ineffective. The development of a company is also a process of the boss's importance continuously decreasing. If the boss still indulges in the good feeling of 'ruling over all' from the small business era, the boss will become an obstacle to the company's continued growth. Some companies have asked us to conduct employee training. After understanding the actual situation, we often bluntly tell the boss, 'Training should start with the boss.' For companies that have changed countless subordinates and still struggle to achieve results, our final suggestion is usually to 'change the boss.' To avoid the founder trap, the boss must demonstrate a determination when the company reaches a certain scale: the individual is willing to submit to the company. Only when 'we' is greater than 'I' can the company truly grow and thrive. In the early stages, the boss is almost the sole driving force for the company's growth. After entrepreneurial success, the boss is likely to become an obstacle to the company's continued growth. In the early stages, the main resource for growth is not capital but the boss's determination. At this point, the boss is the company, and the company is the boss.
Law 2: No grass grows under a big tree. A 'hero boss' often cannot achieve a 'hero company.' Zhang Yue, the boss of Changsha Broad, once said, 'When I first started, I found I could do the work of ten or a hundred people. But eventually, I found I couldn't do the work of a thousand or ten thousand.' A hero company must find something that can do the work of ten thousand. Comparing the 'small boss' of a small business with the 'big boss' of a large distributor, we find many differences in ability and attitude towards talent. The 'small boss' is often shrewd, capable, and indispensable; the 'big boss' seems 'dispensable' because he or she does not do specific tasks. The 'small boss' often does not forgive subordinates' mistakes; the 'big boss' often turns a blind eye to subordinates' minor mistakes. As the saying goes, 'If the water is too clear, there are no fish; if people are too observant, they have no followers.' Writer Wu Jiaxiang said, 'As a superior, you cannot fail to see subordinates' shortcomings, nor can you always stare at them. If you don't see them, you may misemploy people; if you always stare, no one will work for you.' The 'small boss' often likes to show off abilities, using this to prevent others from underestimating him or her and to bolster courage. The 'big boss' often hides abilities, giving subordinates the chance to shine, and lets the company testify to his or her abilities. When the 'small boss' encounters a subordinate with insufficient ability, he or she often says, 'It would be better if I did it myself,' so subordinates' abilities may never improve. The 'big boss' either trains the subordinate to be competent or replaces him or her with a competent person. When the 'small boss' finds that a subordinate's work is not done well, he or she often criticizes or even scolds the subordinate. The 'big boss' criticizes only if it is a responsibility issue; if it is an ability issue, he or she guides and helps the subordinate. No grass grows under a big tree. The 'small boss's' excessive competence is often the reason for subordinates' incompetence. Those bosses who can 'do the work of ten or a hundred' will eventually find they cannot 'do the work of a thousand.' Therefore, cultivating subordinates and building a team is more important than leveraging the boss's personal talents. A 'hero boss' can only achieve a small company; only a 'hero team' can achieve a large company.
Law 3: If you don't get personally involved, you can't do well as a distributor. If you do everything yourself, you can't grow as a distributor. Distributors rely on intuition to do the market; without personally doing the market, there is no intuition. But if you are in the market every day, you will experience 'intuition fatigue' and lose sensitivity to the market, which is the so-called 'aesthetic fatigue.' Distributors often make two extreme mistakes: either they do everything themselves, spending all day in the market, equating themselves with a salesperson, or they stay away from the market for long periods, only going to the front line when problems arise. If a distributor wants to grow, the market must be handled mainly by subordinates; the boss alone cannot do a large market. But relying on subordinates to do the market does not mean letting them cross the river by feeling the stones; subordinates need the boss's guidance. To command subordinates, the boss must spend 2-3 days each month personally experiencing the market, not just taking a cursory look.
Law 4: For small distributors, standardized management increases costs. For large distributors, non-standardized management increases risks. People with formal training often cannot do small businesses because they always apply the model of large enterprises to small ones. They have small scale but many departments, few tasks but many rules. In contrast, those without professional training have fewer rules and processes; they handle things flexibly and operate well. But once the scale grows, distributors find that their old tricks no longer work, and they realize the importance of rules and processes. Small distributors focus on opportunities because with small scale and little capital, they can only succeed by seizing opportunities. Large distributors must first avoid risks, then consider seizing opportunities. Opportunities are found in chaos, while risks are avoided through processes and systems.
Law 5: The number of people a distributor can manage determines the size of the business. From the start of entrepreneurship, distributors generally go through the following stages: Stage 1: Mom-and-pop store. At this point, sales cannot be large; too many customers would overwhelm them. Stage 2: Couple plus helpers. Helpers are mainly relatives who can only do odd jobs and have little effect on market development. Stage 3: Boss plus salespeople. Sales may expand, but they dare not hire very capable salespeople. Stage 4: Boss plus sales supervisor plus sales team plus service staff plus accountant. The market can expand indefinitely, with company-style management and specialized division of labor. The development of a distributor is also a process of increasing personnel, or rather, because personnel increase, business gradually expands. Many distributors cannot grow because they dare not hire people. The reasons for not daring to hire include: First, sales are too small to support them. Second, they are unreliable and cannot be trusted; they only dare to use relatives, fearing that excellent salespeople might become competitors. Third, their abilities are too poor to be useful. Fourth, they don't know how to manage or use people. In reality, it is often the case that: First, it's not that 'sales are too small to support them,' but rather 'because they don't dare to use people, sales are small.' In the initial period of hiring, sales may not support the new hires, but as long as you don't dare to hire, sales will never increase. Second, many distributors' ideal 'capable person' is a 'shadow' of themselves, leading to the phenomenon: 'If their ability is too poor, they are useless; if their ability is too strong, they are not dared to be used.'
Law 6: Small distributors rely on insight, medium-sized ones on professionalism, and large ones on management. Small distributors rely on intuition, instinct, and insight, which come from hands-on experience on the front line. We often see small distributors with many ideas and tricks. Medium-sized distributors need professional judgment; without it, they cannot keep up with the pace of industry changes. Large distributors have accumulated sufficient resources; they do not do things themselves but rely on others. Lacking long-term front-line experience, their intuition and insight diminish. But as long as they have sufficient management ability, they can mobilize many employees and fully utilize their intuition and insight.
Law 7: Entrepreneurial distributors must either become professional managers themselves or hire professional managers; otherwise, it is difficult to transform from a startup to a normally operating enterprise. Liu Bei was an entrepreneurial boss, and Zhuge Liang was a professional manager. Liu Bei never transformed from an entrepreneurial boss to a professional manager in his lifetime, but because he hired Zhuge Liang as a professional manager, he achieved the tripartite division of the world. Some companies are always in the startup stage; managing a scaled company with startup management methods will certainly not make it big. Companies always in the startup stage are always seizing opportunities but fail to accumulate resources to maximize those opportunities. Companies always in the startup stage are always adjusting and experimenting, but fail to maximize what has been proven correct. Companies always in the startup stage are always in the excitement of continuous entrepreneurship, while normally operating companies may be plain or even boring. If a boss addicted to entrepreneurship cannot successfully transform into a professional manager, then the boss should hand over the daily management position to a professional manager and focus on entrepreneurship. Because entrepreneurial success requires the boss, while normal operations require professional managers.
Law 8: Only when products have room for appreciation do distributors have room for operation. Famous brand products sell well but are not profitable; non-brand products are profitable but hard to sell. Almost every distributor is caught in this dilemma. The way out is to 'distribute products with appreciation potential.' When the Hope Group brothers split, Chen Yuxin, the boss of Huaxi Hope, did not use the Hope brand but created his own 'Wanqian' feed brand. At that time, distributors faced the choice of continuing with 'Hope' or switching to 'Wanqian.' Most chose 'Hope,' while a few with foresight chose 'Wanqian.' Since 'Hope' and 'Wanqian' came from the same origin and were similar in quality, but 'Wanqian' was priced lower, its appreciation potential was much greater. Some distributors sold the low-priced Wanqian feed at the price of Hope feed, thus earning excess profits. Choosing a product is like choosing a stock; you neither choose high-priced nor low-priced stocks, but potential stocks—those with low current prices but expected to rise in the future. Only when products have room for appreciation do distributors have room for operation and profit.
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