sell the startup

Six months ago, 27-year-old Liu Zhi sold his first company; soon he started his second venture, and now this "smart project" he called "smart project" is gradually on the right track .

The company that was sold was called Centurion, which deals in incontinence care products for the elderly. It won the third place in the "Searching for Entrepreneurial Heroes" in the first business plan competition of "CEConline" in December last year.

The net income from this transaction is not much, 1.89 million yuan. Liu Zhi also has some regrets because he cannot continue to operate this promising business. However, from his first startup, to selling the startup, to his second startup, the whole process reflects some similar difficulties and inspirations of many entrepreneurs. Liu Zhi benefited a lot from it.

Entrepreneur with a background in sales

Liu Zhi joined Mengniu when he graduated from college in 2007 and began to work in sales. After working in Mengniu for more than a year, he went to a company called Besute and continued to do sales.

Best company mainly produces baby diapers, women's tissues, wet wipes, sanitary napkins, and nursing pads for the elderly. In the few years of Besute, Liu Zhi grew up very fast, starting from the lowest-level county salesman, and later became the Shandong provincial manager.

During this process, Liu Zhi was familiar with the business process of all aspects of the sales work, and accumulated a lot of dealer contacts, so the idea of starting a business was born. "I didn't work in Mengniu for a long time, because I had just graduated at that time, and maybe people were a little more impetuous. After working for more than a year, I felt that it was not as good as I imagined, so I came out. After I came out and encountered setbacks, I was in Shute is more steadfast in his work, and he may do it more steadily after being steadfast. At this time, he is familiar with the process, which leads me to be relatively familiar with this field, so I still want to start my own business to do this.”

In September 2010, Liu Zhi founded the Centurion Company, and took the elderly incontinence care products as the product of the business. This is not only because he has the industry experience and resources, but also because the market space is huge.

The industry research report of China Business Intelligence said that the adult incontinence product market entered a stage of rapid growth in 2010. In 2010, the consumption of adult diapers in China was about 481 million pieces, and the consumption of nursing pads was about 263 million pieces; the adult incontinence products market The scale increased by 69.0% over 2009. In 2010, the consumption of adult incontinence products in China increased by 52.1% over the previous year, among which the consumption of adult disposable diapers increased by 103.0% and the consumption of nursing pads increased by 4.4%. As China's population aging becomes more and more obvious, the market demand for incontinence care products for the elderly will increase in the future.

Although the market demand is huge, Liu Zhi's start was not smooth sailing, and the troubles of starting a business followed one after another.

The troubles in the early days of the business

When the Centurion Company was first established, everything was empty. Although Liu Zhi has done business and sales, when he started a company and a product, he found that sales was only the last part of making a product. Before, the design of product packaging, product pricing, etc., were very vague." In fact, we are in a process of learning by groping. Sometimes we are very confused and don’t know whether some choices and decisions are right or not. This is the first difficulty, but this difficulty does not appear very early.”

Probably at Two months after the product was put on the market, Liu Zhi discovered the problem with the product. "In the market inspection, we found that our packaging is a little small, the gram weight of our products is a little low, and the price is a little high, and then we make adjustments. This difficulty is not a big problem, because we can overcome it after adjusting ourselves. "

Liuzhi's biggest difficulty is the unsatisfactory product sales. "This process lasted about two to three months. In this process, we relied on our own beliefs and persistence, and then went to the market by ourselves, and this situation was opened." It started to be put on the market. After the product adjustment in June and the promotion in July, August and September, 30 to 40 dealers were established in nearly 6 provinces, and the sales at this time were quite good. From the peak sales season from September to December, the monthly sales volume reaches more than 700,000.

The reason for the increase in sales, in addition to building a dealer network, is also related to quality, packaging and price. "I feel that our operation idea is quite right. When the market is full of low-end junk products and foreign waste, we use more orthodox pulp. Another is that our packaging design is more beautiful, We use the scheme designed by a formal advertising design company, which is different from those on the market who get a transparent plastic material and type a random image. It feels like we are still a brand."

But when the product was selling well, 9 Liu Zhi encountered a bigger difficulty in the month. "We found that we lost money after this account was calculated. What is the reason for the loss? Many dealers, because our brand is a new brand and a small brand, ask us to increase their promotion efforts, and the margins of profit and discount are relatively large. , Some dealers pressed the payment more seriously, and only paid once a month or two months, which led to our capital turnover and extremely low gross profit. This was the most painful thing for us at that time. "

To sell or not to sell, that is the question

The difficulties encountered by the Centurion since its establishment more than a year ago caused great disputes among the five partners, including Liu Zhi, If we can't continue, market competition, our strength, and various reasons." The centurion was faced with the question of where to go.

Awards build confidence. Just when the partners had disagreements, the elderly incontinence care products operated by Centurion stood out from nearly a thousand business plans because of their broad market prospects, and won the "CEConline" first business plan competition "Looking for entrepreneurial heroes". "The third place.

This award gave Liu Zhi and the others a boost. “It gave us a lot of recognition that we were right in the direction we took. So we chose how to continue this, and that’s what we thought after winning the award. The shareholders came together again and started There is no such thing as disagreements, quarrels, and trying to get out of the way."

Through participating in the selection of this award, Liu Zhi met some friends, including senior investment managers of Analysys Capital. Zhang Pengcheng, "We had several contacts after that, and he also gave me a lot of advice, and we are still in constant contact. The resources of this network allow us to step into higher-end resources. It is a relatively low-end resource, such as financing and experts, we have no chance to contact, this time we have a chance.”

Financing is difficult. Although winning the award can bring some opportunities, the problem of funding still plagues Liu Zhi. Liu Zhi believes that the main reason is that he and his entrepreneurial team lack experience in production control.

Among Centurion's five partners, three are pure investors, who contribute capital as shareholders and do not participate in the management of the company. As the legal representative of Centurion, Liu Zhi, and another partner participate in the company's operation and management. They have no experience in production control, resulting in high production costs. This would have caused low gross profit and capital due to strong dealers. Tensions became worse.

Liu Zhi said: "We are really suffering from the issue of gross profit, we don't have a factory, we use the method of OEM processing, and we can't talk about the control strength of the factory, and we can't fundamentally solve the problem in the market. Pricing power, the price of the overall market has a range, nothing more than can only go in this range.”

The lack of production management and control capabilities of the entrepreneurial team makes investors not confident enough to invest in Centurion. Liu Zhi and the others also considered improving the control of production costs by building their own factories. "We thought about such a stage. If everything goes well, we will build our own factory in two to three years. This production line is not It is very expensive. If we do all of it, we can bring in the machines for one or two million yuan. If we lease a factory, we should be able to bear it. But before that stage, our funds can no longer be carried. "

The company's products have a broad market space, but they cannot get financial support. To sell or not to sell the company is indeed a difficult problem for Liu Zhi. Liu Zhi's answer was: "We just thought, either we will invest some money in it ourselves, or we will find financing. We have tried these two paths for nearly two or three months, but both paths have not worked out in the end. Don't sell the company."

Find a good buyer and sell it at a good price

In the end, the Centurion sold it to the Jie Liya Group in a complete sale-the latter wanted to strengthen the elderly through this acquisition Incontinence product line - Centurion's entire assets, including products, trademarks, personnel, distributors, etc., were sold for 2.8 million yuan.

Actually, Jie Liya became a buyer by accident and necessity: Liu Zhi started his own business under an old leader of the Best Company and built a factory in Tianjin to produce sanitary napkins. He always hoped that Liu Zhi could cooperate with him. But Liu Zhi is full of confidence in his products and just doesn't want to go.

During this process, the two sides had contacted five or six times. The leader introduced Liu Zhi about production factories and raw material suppliers in the relevant industries. These people are more aware of Liuzhi's products and intend to cooperate with Liuzhi. Later, when they knew that Liu Zhi encountered financial difficulties, they proposed the form of buying shares and acquisitions. This is how Zelia became the centurion's last buyer.

During this transaction, Zhang Pengcheng, senior investment manager of Analysys Capital, who is very professional in capital operation, provided Liu Zhi with professional informal consulting services. "When we were negotiating the price and selling the shares, he gave me a lot of good suggestions, so that I safeguarded my own interests in the final negotiation, which I was particularly impressed by." Liu Zhi said.

Zhang Pengcheng said that when looking for buyers, entrepreneurs should consider whether the purpose of selling the company is for return and cash out, or to use a new platform to realize their original dream of starting a business and continue this business. big. This is a question that needs to be thought through from the very beginning when selling a company and looking for a buyer.

Zhang Pengcheng also pointed out that a very important point of the transaction is that its efficiency should be as high as possible, because no matter the size of the transaction, it must involve a lot of points. There are many points involved, and the complexity of the transaction will be relatively high. The transaction complexity is relatively high, and the entrepreneur cannot complete the transaction with a relatively high efficiency, so many unexpected things will occur in this process. If the entrepreneur’s purpose is to make this deal, the first thing to consider is timeliness. If the delay is too long, the probability of closing the transaction will be lower and lower.

Create a business she likes

Selling the centurion was not only forced by financial pressure, but also driven by Liu Zhi's interest to a certain extent. He admits that doing business and selling is not his interest. "I like to read and think, but I like to do something more intelligent, but I don't particularly like to do business. Although I can do it well, it is not what I really want in my heart. This road is because I was very confused when I just graduated from college, and I didn’t know what to do. I submitted my resume, and I will go if anyone wants me.”

Selling the centurion, what should I do for my second business? Liu Zhi comprehensively considered his interests, the management consulting seminars he participated in, and the market potential and other factors, and decided to use the professional method of management consulting to help college students find employment. Simply put, his method is as follows:

Using scientific methods to help college students understand themselves. For example, Jungian psychology's personality test, career development tools, 360-degree interviews, etc., help them better understand themselves: what they can do, what they like to do, and what career direction they are really good at and can do well.

Collect career development cases in the industry, so that college students can understand more specifically whether this industry is what they really want. After the industry is determined, help college students design a path to achieve their career goals.

Liu Zhi, a young entrepreneur who helps others design a path forward, embarks on a journey of his own interest.