China is the only fastest major growing nation with an average annual GDP growth rate of at least 10%. In 2007, China was ranked 1st by current account balance of USD 262.2 billion dollars (9% of GDP).
China’s rapid development of its economy is no threat to any other country but an important opportunity for other countries to come into China and expand and expose their market internationally. China’s globalisation is becoming “the place to be” for exposure to multinational companies and organizations.
The Chinese business culture is very unique. Chinese like to talk about “guanxi” (relationships), and “mian-zi” (to give face).
• “Guanxi” means relationship, any form of relationship. Once “guanxi” is established, it means constant cooperation and support is exchanged with one another. Basically, it goes as far as exchanging favours on a regular basis. The Chinese believe that by knowing how to make the right “guanxi”, it minimizes the risks, frustrations and disappointments of doing business in China.
• “Mianzi” means to give face. If you “give face” to someone, you respect that one person, and you will not do anything to embarrass them. If you don’t “give face” it means you don’t respect them, hence, they should no longer be in any association with you. It can be as absurd as not accepting a cigarette, meaning you don’t “give face” and thus you don’t respect them.
Developing Relationships (Guanxi)
Once you have developed a mutual relationship and cooperation with a Chinese businessman, it literally means you will support each other. “Guanxi” and “mianzi” are very important in China, not only with networking and doing business, but also in everyday life. PRC Study can help you establish and open up your “guanxi” in China, as well as teach you the morality of “mianzi”, and various aspects about doing business in China.
Basic Understanding of Mandarin Chinese
When doing business in China, foreigners often come across the same problems over and over again. The language barriers between English and Mandarin Chinese are completely diverse. Even if you hire a translator, would it not be better if you have some understanding of the Chinese language to ensure that the translator is at least translating what you are really trying to say? Therefore, it is really recommended that those doing business in China have at least a basic understanding of the Mandarin Chinese language.
Chinese Business Protocol
As for business ethics, men or women should never wear bright suits (to the Chinese it seems very inappropriate), and must develop good “guanxi” and give a lot of “mianzi” to show trust, appreciation, honor, and cooperation.
Starting Up a Business in China
To start up a business in China takes anywhere from one month up to 1 year, depending on the type of business one wants to start. There are 13 procedures to go through till you finish setting up a business. To start up a business, you must be obtaining the following items below before you can open your business to the public:
• A notice of Pre-Approval of the Company Name
• Opening a preliminary bank account
• A registration certificate “Business License of Enterprise Legal Person” with SAIC or local equivalent,
• Approval of making the company seal from the police department
• Organisation Code Certificate issued by the Quality and Technology Supervision Bureau
• Register with the local statistics bureau
• Register for both the state and local tax with the tax bureau
• Open a formal bank account
• Apply for authorisation to print or purchase financial invoices/receipts
• Purchase uniform invoices
• File for recruitment registration with local Career Service Center
• Register with Social Welfare
By: Amit Salkar
Archive for December, 2009
Doing Business in China
December 21st, 2009Business Letter Writing
December 17th, 2009
To get your self enlightened by the fundamentals of the first-rate business letter writing is quite simple. On the way to the content of business letters, phrases are applied as a kind of frame and introduction. By means of those standard phrases, you can confer a professional tone to your English business letters.
While answering to the inquiries of the potential customers, it is vital to make the excellent impression on them. If the resource or information is made available to them of which they have asked for, than they will absolutely find the superlative impression about you. With a well-written response, this affirmative impression can be very much enhanced.
Just retain in your memory to place your or yours’ company address at the top of the letter or else use your company’s letterhead, pursued by the address of the company you are writing to. The date can either be located double spaced down or to the right. You can also incorporate reference number on behalf of correspondence.
If you have to write the Business Letter, asking for the information, you need to write down the enquiry pertaining to manufactured goods, service or other information regarding a product or service that welfare us. If the advertisement of the product which we have seen on the paper, magazine, or on television inspire us, make us tempted to buy that product, but still some-where-down-the-line, we yearn for more information before casting-a-die (making of final decision). And so, these lettering is frequently donned in the reply of those advertisement so as to render the good outcome.
If you have to write the Cover Letter pertaining to Job, it should surely comprise your resume or CV for a possible job interview.
To the right of the letter, there should be important notes regarding the layout specified in red. Than in the last paragraph, you can go ahead soliciting for an appointment time when convenient to them, asserting that you will be glad to appear at the owner’s office. Make it painless for the reader to follow-up by making available to them your telephone number and email address.
The metaphorical differences here is that the regardless of marvelous similar surface uniqueness, American business letters are reader oriented, French business letters are writer oriented, and Japanese business letters are oriented to the gap among the writer and the reader.
Because Business letters characterize the episode of particular communication, there is a close match between the intentions of the writer and the expectations of the reader. Therefore, for this reason, Business letters are preferred for the examination of an extremely prescriptive form. The written communication enlarges the diverse understandings of the writer’s intention and the reader’s hopes in different civilizations.
By: Sameer Shah
Wholesale Business: How to Start a Beverage Distribution Business
December 15th, 2009
Combine Wholesale Distribution with the Beverage Industry and you get one of the most profitable and fun businesses in the world.
This article will give you an introduction into this great business, how you can start and how much money you can make on each case of beverage sold. Is beverage distribution for you? Find out right now.
Beverage distribution is one of the easiest and most profitable businesses I’ve seen.
I like it because you don’t need a lot of customers to make a lot of money. You can easily make an extra $5,000 with a few customers.
You will see why beverage is one of the best businesses in the world. I started in beverage while I had my tool and novelty distribution business. I was looking for new products, products that I did not need to exchange so often and that I could sell over and over again to the same customers. This last part was key.
You see, when I was selling tools I figured that I could sell up to 1,000 tools per day or more but every customer was unique. In other words, if you buy a hammer at a store on Monday chances are you will not go on Tuesday and buy another Hammer. Even if it only costs $1.98!
Don’t get me wrong, the “tool distribution business” is a wonderful business and I still love it. I was just looking for another type of product to add to my current items.
I figured out that in order to sell the same product over and over again it would have to be a food product. So I started going to trade shows and looking at chocolate, potato chips, candy, and other products. I even looked at name brands like Hershey’s. The problem was that I could not buy directly from the manufacturers and the profit margins were super low, about 12%. I was used to up to 70% profit margins.
Finally I ran into a beverage manufacturer of an Energy Drink. They were just starting with their product and it was easier to become a distributor.
Now let me tell you a bit about Energy Drinks. Energy Drinks are the new Super Profitable products. Everybody makes money, the manufacturer, the distributor and the retailer. You see, Energy Drinks sell for $1.99 to $2.40 at the stores for 8 to 16 ounces. This is incredible if you consider that you can buy a soda that’s the same size for $0.50 to $0.75. Even a 20 ounce soda runs you about $1.25.
Distributors love the product because they make about $8 per every case they sell compared with about $2 to $4 for their other products.
Let’s get back to the Beverage Business. The great part of this business is that if you have only one customer going into the store buying your product you sell at least 1 case of that product per month.
You see; if you sell a soda someone can buy a soda every day, compared to a hammer, where people don’t buy a hammer every day. So you need fewer customers because you sell more per day.
For example: Let’s say you have only 100 stores that you service yourself and sell 3 different beverages. You sell one Energy Drink and 2 Sodas. You make $8 from every case of the Energy Drink and $3 from every case of soda.
If you sell only 1 case of the Energy Drink per week per store and 3 cases of each soda you’ll make about $600 profit from the sodas per week and another $800 profit per week from the Energy Drink. That’s $5,600 profit per month with only 100 stores and only 3 different products. It’s very easy to ramp up to 5 or even 8 products. This is why I love the beverage business.
Now let me tell you a bit more about Energy Drinks. They are the category that is growing the fastest of any other drink. It grows up to 70% per year in the US compared with 2% growth for soda. Companies are still growing from 100% to 300% per year every single year. The best part is that there is no end in sight.
Not only that, the Energy Drink Business is incredibly fun. You get advertising and promotion from companies, you get to do club and store promotions, get t-shirts, hats, gifts, extra commissions and free product from the Energy Drink companies. You also get free racks, coolers, sometimes even refrigerators.
Copyright 2006 Cube 17, Inc.
By: Jorge Olson
