MGTO 331

Go With your Confidence and Plan or You Would Never Get It

Co. Ltd., a company based on partnership, was newly founded in October 2003. It has already become one of the largest car air compressor manufacturing firms in Mainland China, Dong Guan, with both local market and oversea markets like South East Asia, Middle East and USA. I was pleased to have an interview with my friend’s boyfriend, Mr. Kalven Zhao, the biggest founder of the company, who is just about the same age as most of us who are attending MGTO331. What factors make young Zhao a successful entrepreneur? We are about to find out.
　

Opportunism
Owing to the drastic increase of demand for cars, the derived demand for a part of a car, the air compressor, also increases drastically. In year 2004, 2 million air compressors were produced by firms in Guangdong out of the 5 million produced by the entire China Zhao said. The industry of car air compressors manufacturing is actually having quite intense competition among existing firms within Mainland China. In Guangdong alone, there are more than 200 of this kind of manufacturing firm. However, Zhao noticed that most of their targeted markets have remained in Mainland China and less than ten of them have overseas markets. Therefore, with help from his two other partners, his dad, who is already a entrepreneur and his friend, who has more than 10 years experience as a manager of a similar but dismissed firm and has well established networks and thus sources of clients, he successfully initiated his own business and differentiated their own firm from the others by focusing more on the quality of their air compressors and targeting more on the oversea markets. Zhao successfully grabbed the opportunities provided by both the objective market as well as people surrounding him.
　

Confidence
There are no definite successes Zhao said. There are definitely expected risks, like losing money, or problems related to personal matters and daily operations. However, there are also always ways to tackle these problems by giving corresponding reaction flexibly Zhao confidently added. We should not avoid doing one thing because of the potential risks or problems as there are no businesses involve really no potential risks and problems.

Long-term Plan
Having confidence is a very important quality for an entrepreneur but confidence alone is just not enough. You have to make sure you are on the right track in order to succeed. Therefore, careful long-term planning is very essential. Zhao said they have spent 3 to 6 months in the stage of idea generation and actual preparation. The stage includes the design and decoration of the factory, the buying of machines and facilities, recruitment of skilled labor as it is a high-tech industry. Moreover, they need to learn more about the industry and the market in aspects like how to trade and how to promote such as doing exhibition, building website, etc. They would also need to think about how the funds are going to be allocated well among different divisions. And of course, one thing cannot be neglected is to psychologically well prepare for starting a business, to be confident and be to be serious.
　

Flexibility and Adaptability
Another important factor contributes to a successful entrepreneur is the adaptability to sudden and unexpected events. One of the unexpected events is the drastic increase in sales as reputation and trust being built over time. Zhao said. In year 2003, the firm produced 500 air compressors per months while at present, the production goes up to 3000 air compressors per month. It is a multiple of 6! The total production for year 2004 was 6000 air compressors while the total production for the first 9 month in year 2005 is already 20000 air compressors. With the increase in scale of production, more funds are also needed. Like at the beginning, 4 millions are required to start the business, but after scale of production increases, 2 millions would be needed per month operation. Therefore, flexibility in foreseeing market share and expansion in future as well as in generation fund is really essential.
　

Other unexpected events may be negative ones Zhao said. There are sometimes some customers cheat them by changing the components and then claim for insurance. To tackle the problem, they have to take some preventive action like leaving some mark inside the product so that whenever someone tries to change the components, they can find the clues. Also, they must not will to renew the product if they discover such kind of cheating of clients.
　

Good Network and Good Employer-employee relationship
Staring a business is not like a play in a one-man band, you would need help from others, and human resource is one of the most important assets of a company. Zhao gained much assistance from his father and his friend who was once a manager of an agency dealing with the same kind of products. Also, he emphasized much on social activities with his employees. He would have dinner with the supervisory level three to four times a week and there would be at least one big gathering for all employees a month. Zhao said. These informal gatherings help his employees to express their own opinions about the company more easily and thus make the operation smoother.
Also one very important factor which helps Zhao become an entrepreneur is LUCK. The fact that his father is an entrepreneur and his rich family background provided Zhao with a hugh opportunity and possibility to start a business. Still, we should bear in mind what we learnt from Zhao, when opportunities come, go ahead with your confidence and a clear plan, or, you would never get it.




Interview with Mr. Kalven Zhao
Date: 25th September, 2005