“Forming a business partnership [in China] can sometimes go really wrong. I think everybody entering a business partnership should be very cautious. This doesn’t apply only to Chinese people; people everywhere are complicated. People are quite greedy. When money is involved, it can be very difficult.”
Mark Pummell (UK), Founder and CEO, ChinArt, Sinapse, and Music Pavillion
“When it comes to business plans, you have to make sure you are profitable within a year. It is nonsense to make a five-year plan before you can make a profit. Things are changing so fast [in China] that if your business model isn’t profitable in a year, you have to seriously reconsider. Maybe that’s not true in other places, but it is true in China.”
Olaf Litjens (Netherlands), Founder and CEO, Unisono Fieldmarketing (Shanghai)
This chapter covers the second set of “initial steps” for foreign businesspeople setting up shop in China: funding the new business, and finding the right Chinese business partners. Both steps are difficult for entrepreneurs in any business environment worldwide, but starting up in China offers several unique additional challenges.
In terms of startup funding, entrepreneurs in China generally choose one of three main sources of funding: their own savings; those of family or friends; ...