Introduction: Recently, while providing consulting services to distributors, I encountered this case: Lao Li is a distributor of daily chemical products in Hebei. Ten years ago, he left a stable government job to go into business. After ten years of ups and downs, his business is neither big nor small; his highest annual turnover ever was over 100 million yuan, and currently, his annual turnover is nearly 20 million yuan. Four years ago, when his company's turnover was at its peak, Lao Li was particularly worried: the company's scale had grown, but how could he ensure steady growth and become a 'true' 'big distributor'? His concerns were not unfounded. The following year, a major brand he had cooperated with well, citing his insufficient market management capabilities, downgraded his agency from city-level general agent to regional general agent. After this lesson, Lao Li felt that to become a truly 'big distributor', his company needed to make changes and could no longer rely on 'him, an old gun' to charge ahead alone. Lao Li also made a great determination: he bought many books on company management and marketing management, and often participated in many trainings held by manufacturers. But he is still very confused. Not doing it means 'waiting to die', doing it means 'dying anyway'—the biggest confusion in distributors' second entrepreneurship Recently, due to my work, I have had the opportunity to discuss the topic of 'second entrepreneurship' with many distributors. Many distributors who are now somewhat famous initially went through a 'tearful' entrepreneurial history: tossing and turning before diving into business, doing everything themselves in the early days, braving wind and rain, carrying the responsibility to their families and self-expectations, and in battles against the market, they successfully gained rich market rewards. Yes, many distributors have successfully left their solid footprints in China's rapidly developing commodity economy. Compared with distributors in any developed country, they have encountered the most loneliness. Because they have no mentors, no textbooks, only opponents and risks. Only through their unremitting efforts and China's increasingly prosperous commodity economy have they achieved today's brilliant achievements. But the market is cruel. We often see the metabolism of 'the waves behind drive the waves ahead, and the waves ahead die on the beach'. What causes such a cruel outcome? They can start a business, but cannot maintain it! When it comes to this topic, many distributors have something to say: As a distributor in Hangzhou said: 'In the current circulation industry, competition is undoubtedly becoming increasingly fierce, but due to the rapid development of the industry, the industry's prospects are always relatively optimistic. However, now I want to expand the business, but I always feel inadequate. So I thought of carrying out a second entrepreneurship within the company, but after a lot of fuss, the employees did not share my work as I imagined. As a result, I can only become more and more tired, and even my wife and a few relatives have to be pulled in to manage.' Many distributors have the idea of 'wanting a second entrepreneurship', but the fact is that 'change has made distributors hit a wall'. It's easy to start a business, but hard to maintain it! Isn't it? The rules of the market game are becoming more standardized, and the intensity of market competition is increasing. Facing such a market environment, many distributors are in a dilemma of being unable to cope. So some people quit, and some are still struggling! Where is the problem? This is a problem of distributors' lack of development momentum, a problem of transforming the development model, and a problem of 'second entrepreneurship'! When it comes to this, many distributors say that second entrepreneurship belongs not only to the distributor himself, but also to the entire company. Yes, because they strongly feel the need to step out of the individual household's single-handed entrepreneurial model! But their ideas are good, yet practicing them is extremely hard. Because they have tried various means:
To motivate employees, they proposed commission plans, but in the end, employees didn't feel that commissions increased their income much, and the incentive effect was not great;
To standardize employee operations, they formulated company management regulations, but in the end, few people knew what the regulations were, and even fewer strictly followed them;
To effectively divide work, they promoted employees who had performed well before and also recruited professional managers from outside, but business growth and the standardization of business departments did not improve as imagined. It was the same as before, at most just more hands.
...... So many distributors are confused, and have bought many books and attended many trainings, but have never found satisfactory answers. Yes, the biggest confusion in distributors' second entrepreneurship is: second entrepreneurship, not doing it means 'waiting to die', doing it means 'dying anyway'. Change and innovation have completely failed to achieve the expected results. Two common mistakes in second entrepreneurship The main reason why many distributors' second entrepreneurship has not succeeded is: **in most cases, distributors' second entrepreneurship.**often makes two major mistakes: The first mistake is that although distributors have proposed second entrepreneurship, they have not actually thought clearly about what the purpose and goals of second entrepreneurship are; the second mistake is that distributors ignore the huge gap between their own mentality and abilities and those of their employees. Why say that distributors do not think clearly about the purpose and goals when starting second entrepreneurship? Some distributors say: When I started second entrepreneurship, I set a goal to increase sales by 20% that year. How can you say I didn't think clearly about the purpose and goals? Others say: At that time, I formulated management systems and employee assessment systems, planning to transform the company from single-handed to group charge within one year. Such goals are both reasonable and achievable. How can you say I didn't think clearly about the purpose and goals? Yes, what these distributors said is not wrong. Some goals are to increase sales, some are to improve internal management efficiency, but many distributors, when starting second entrepreneurship, did not think clearly about the development goals of the business. Why do distributors set sales goals? Because it is the basis for survival. But what proportion of sales completion is due to the efforts of salespeople? Market factors, competitive factors, product factors, corporate support factors, etc., all affect whether distributors and their sales teams can ultimately achieve sales goals. So completing sales goals must involve the distributor boss's own responsibility. He is responsible for maintaining and developing relationships with cooperative manufacturers, selecting and ultimately choosing products suitable for market sales, and guiding salespeople in market development. Only then comes the sales team's responsibility for market development and maintenance. If distributors do not think clearly about their own responsibilities and goals, and directly transfer sales tasks to their team, it is normal that they cannot ultimately achieve the goals, because the sales team does not have the authority to do certain things. What is the development goal of distributors' second entrepreneurship? It is for distributors to clearly understand what their company will look like in the future and think clearly about their role and responsibility in this new look. Undoubtedly, distributors' first entrepreneurship relied on personal effort and the opportunities of the times, but for second entrepreneurship, from the perspective of business management goals, it is necessary to achieve 'enterprise-style operation'. Originally, distributors relied on interpersonal relationships and networks to make money, but after second entrepreneurship, distributors rely on resources and manpower to make money. All management has costs, but the purpose of management is to make resources and capabilities create greater value! Many distributors have outstanding abilities, but compared with some excellent enterprises, they still have a big gap because they cannot materialize tangible or intangible resources, nor can they use stable organizational structures and human resources to earn money. In plain terms, the bottleneck that prevents many distributors from becoming stronger and bigger is: they cannot use 'money' to make money, nor can they use 'people' to make money. They have to do everything themselves, and as a result, they cannot deploy their abilities to where they are most needed. The second mistake distributors often make in second entrepreneurship is that they ignore the huge gap between their own mentality and abilities and those of their employees. Many distributors delegate some powers and affairs to their subordinates, but soon the distributor bosses feel uneasy. First, they fear that after fully letting go, employees will grow and then jump ship or start their own businesses; second, they turn a blind eye to employees' efforts, but remember their mistakes and criticize them from time to time. In such an environment and management approach, it is hard to imagine that distributors' employees can truly grow. As a result, distributors can only think that their employees have limited abilities and are not up to important tasks. Facing this situation, the main reason is that distributors have not clearly divided the relationship between authority and responsibility. The biggest difference between distributor bosses and their employees when facing direct customers is authority. When a major customer of the distributor comes to the distributor, the boss can immediately determine preferential prices and settlement times, but usually employees do not have this power. So when customers have problems, they always think of finding the boss first. This is the same as when distributors cooperate with enterprises and always want to talk to the general manager. Before the power at the customer interface is effectively shared, distributors' accusations of employee incompetence are, in many cases, overgeneralized. 'You can't even handle this, you have to call me out!' If distributors often encounter such situations, it shows that they are still in the first entrepreneurship stage, still fighting for the survival and cash flow of their company, and also shows that such distributors cannot achieve significant development. But on the other hand, some distributors have delegated authority, but employees have not achieved good results. Why is that? It should be said that all people are lazy. When distributor employees encounter problems and difficulties, many think of handing the problem to the boss first, and few actively seek solutions themselves. This is due to habitual thinking, and also because there is a gap between employees and bosses in the desire for development. In many distributor companies, there is no corporate culture, no shared values, so although many distributor companies are small, communication problems are still serious. At the same time, many distributor employees, after gaining authority, lack prior ability training, so it is quite difficult for them to suddenly meet the requirements of distributor bosses. Mentality gaps, insufficient abilities—these various reasons cause many distributors to still not achieve significant results after delegating authority. 'You can't get fat by eating one mouthful'—everyone understands this saying, but when it comes to practice, many distributors forget it. How to successfully cross the second entrepreneurship The so-called enterprise-style transformation of distributors is not as simple as many distributors imagine: setting up a team, making a system, giving a reward and punishment plan—can that achieve second entrepreneurship? The content is not wrong; the mistake is that many distributors do not pursue the next question: 'Is this suit of clothes fitting? To what extent is it fitting? How long will it fit?' Yes, but we must also see that for a commercial enterprise to grow rapidly, the necessary condition is 'simple and replicable'. Many distributors face complex market competition and difficult-to-improve employee capabilities. Even if distributor bosses have good ideas, they are hard to realize. Many distributors require employees to: be familiar with products, understand marketing, know the status of network customers, be good at developing customers, work proactively... So a problem arises: how many years of work experience, how much work ability, and how broad social relationships does such an employee need to be competent? If a distributor needs to take 5 years to turn an ordinary employee into an excellent one, then the distributor's development speed will definitely not be fast. If another distributor can quickly get employees up to speed through short-term training plus departmental internships, then that distributor's development speed will definitely be fast. The difference in employee competence between these two distributors is actually the huge difference in employee management between distributors who have successfully completed second entrepreneurship and those who have not. The former's turnover may exceed 10 million, but it is absolutely impossible to exceed 100 million; the latter has much more room for development. On the surface, the difference between the two is the speed at which new employees get up to speed, but in reality, the real difference comes from the two distributors' profit models, organizational structures, business processes, authority division, informatization of network resources, employee performance assessment, etc. Wanting to solidify the value of network resources with systems, wanting to improve the enthusiasm and operational standardization of sales personnel, etc., are dreams of many distributors, but in fact, they are difficult to achieve. The key obstacle lies in the institutionalization, simplification, and standardization of internal management such as business processes. At the same time, combined with effective corporate culture, distributors can form a company group that can be continuously replicated and expanded. 'Foolproof operation' is the execution goal that distributors should pursue in second entrepreneurship. Distributor bosses look at key indicators and 'foolproof' monitor company operations; distributor financial managers look at cash flow and capital turnover efficiency, 'foolproof' control company operating risks and profit returns; distributor sales managers look at the 'market development map' and sales plan completion rate, 'foolproof' control the company's business operations; distributor warehouse managers look at product turnover rate indicators and inventory indicators, controlling shortages, overstock, and losses. Only by achieving 'foolproof' daily operations can distributors free themselves from busy daily affairs and have the energy to handle matters that can create greater performance and more profits, such as public relations with key manufacturers, product updates, acceptance of new products, deepening cooperation with manufacturers, integration of terminal resources, integration of network resources, etc. Only by achieving 'foolproof' daily operations can distributors materialize tangible or intangible resources, establish a business model with stable performance growth, and truly make their company stronger, bigger, and longer-lasting. In late August, the '2018 China Digital Innovation Conference (2018FDIC)' with the theme 'Finding New Engines for Growth', hosted by the China FMCG Industry Association and organized by New Distribution, will be held in Shanghai! This conference will last 3 days, focusing on two major themes: marketing and supply chain, with six parallel forums: brand, channel, communication, B2B, same-city logistics, and innovative retail. We will invite industry bigwigs, CEOs, and senior brand executives to deeply interpret the trends and drivers of digital transformation in the FMCG industry. This conference will have more than 5,000+ enterprises participating. This grand event brings together outstanding explorers and promoters of digital transformation in various industries, sharing case practices of digital transformation of industry enterprises and partners, discussing digital technology development trends and cutting-edge applications, building a bridge for brand owners, distributors, retail enterprises, and marketing agencies, helping FMCG manufacturers obtain the latest information and understand the best application practices. Help brand owners and distributors find new digital growth engines in the Internet era! Conference Time August 22-24, 2018 Conference Venue Shanghai Baohua Marriott Hotel Conference Content 8.22 All-day check-in Afternoon 14:00-17:30 Distributor same-city logistics parallel forum Evening 18:30-21:00 New Distribution Night Bigwig Dinner 8.23 Theme: Marketing Digital Innovation Morning 9:00-12:00 Marketing Digital Innovation Main Forum Afternoon 14:00-17:30 Brand, Channel, Communication Parallel Forums 8.24 Theme: FMCG Supply Chain Digital Upgrade All day: FMCG Supply Chain Conference Registration Method Registration is now open. Long press the QR code below or click 'Read Original' to register. Special early bird tickets are limited to 200, with a 50% discount, while supplies last! Registration Consultation Ticket inquiries: Media cooperation inquiries: Highlights of New Distribution's Previous Conferences Click the link below to review the highlights of the 1st, 2nd, and 3rd FMCG + Internet Conferences: -END-