Thursday, April 3, 2014

The tale of 2 brothers starting a business

Venturing into Business

Once there were 2 brothers who were very poor. They and their family of 9 lived in a small apartment. They had to fight for toilets, walking space and even bedroom space. Desperate for a breakthrough out of poverty, the 2 brothers decided to venture into business. The older brother was working as a renovation contractor and he's paid for every work completed. There was a rich man who said to this older brother: " How much money can you earn by being an employee? The most you can take is 2 renovation projects per day being an employee. But if you start your own company and employ people to work for you, you can do many projects a day. Then you will be rich".

The rich man words left a deep impression in the older brother's heart. He gave it much thought and decided to start a business to get out of poverty. As he was sharing his decision with his parents one night, coincidently his younger brother also said he wanted to start a business. Their parents were happy to hear that and thought maybe they would get out of poverty soon with 2 businessman in the family.

The younger brother got to know an acquaintance who sells specially made crystallised products. He remembered his friend telling him a reputable European company was looking to buy this crystallised chips. He immediately signed a contract with the acquaintance to purchase $400k worth of chips from him. After that, he signed another contract with the European company to sell the chips to them for $520k. That is a $120k profit in just a few days, the younger brother thought. He was amazed at his luck even though he did not have any experience in business nor any experience in handling crystallised chips. When it was time to deliver the goods, his acquaintance did not send him the goods as promised and he could not contact him either. This was when he realised that he had been cheated. Because of failing to deliver the goods, he was also sued by the European company for breach of contract. He was demanded to pay $600k in damages or risk going to jail. A 120k profit became a $600k debt within just a few days for the younger brother.

On the other hand, the older brother successfully started his renovation business and got a steady stream of clients from a reputable property developer. The boss of the property developer was non other then the rich man who said the words that left him the deep impression. The older brother had many years of experience in the renovation industry and was known for his integrity and good workmanship. That was what attracted the rich property tycoon to work with him. The older brother's business was a success while the younger brother's business failed miserably. Both took advantage of an opportunity which came knocking on their doors but the results was completely different.

3 lessons we can learn from this story

1) When doing business, experience is important. Do not trust the wrong person or venture into something which is completely foreign to you. Yes you need to take risk to do business but learn to take calculated risk.

2) Do your best even in the little things. When you are an employee, having a good attitude and delivering good results will attract opportunities to you in the future.

3) When you have been doing your job for a period of time, you acquire the necessary skills and would have built the network of contacts. Starting a business at this stage will be less risky and easier as compared to starting out from scratch.

What other lessons have you learnt? What are your experiences of starting a business?

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  1. This is the story line from a hongkong drama few days back yet you turn to your own story. Hmm

  2. Hi,

    Yes, its from the hong kong drama I watched. Thought it was really meaningful to share.

  3. Interesting read. Thanks for the write out.

  4. Hi SGYI,

    Interesting story, short and straight to the point. Thought to share this tip from Jack Ma on who to/not to work with in a business.