Why does the cafe crowdfunding become so "sad"?

In August 2013,66 overseas returnees from all over the world and all walks of life invested 20,000 yuan each and jointly raised 1.32 million yuan to create China's first female crowdfunding cafe Her Coffee. Almost all of these beautiful shareholders had the background of famous foreign schools. Most of them worked in investment banks, funds, and the Internet industry. At first, only eight or nine people came together to open a coffee shop. Because they did not have enough money, they pulled in many friends and finally opened this coffee shop known as "the most beautiful shareholders in history." This is known as "the history of the most beautiful shareholders of the cafe", in the trial opening, was rated as "Beijing's sexiest eight places" one, and for "sexy" interpretation of the new height-dream beauty is the sexiest. 66 beautiful shareholders from all walks of life launched the concept of dream plan and dream manual as a common vision of Her Coffee. They are determined to help more friends who need dream support, and to realize and pass on their dreams together by collecting resources from all walks of life. HER COFFEE, which adopts crowdfunding mode and is the first in China represented by All-Beauty Corps, also quickly attracted enthusiastic attention in the investment and business circles. However, the good times don't last long. In the past year, crowdfunding cafes like Her Coffee have blossomed everywhere for a while, but the follow-up management has encountered growing pains, and even bankruptcy is not a case.

First, crowdfunding becomes popular "worry"

Analyze the past life and present life of the Her Coffee case until it is on the verge of bankruptcy, and how crowdfunding has become a public "worry". Crowdfunding is a resource, and shareholder resources bring business promotion opportunities; but the problems are chaotic decision-making, vague operating models, difficult balance of payments, and often a lack of professional, coffee-savvy management teams.

(1) lack of rules and restrictions, difficulty in organizing shareholders and confusion in decision-making

The primary reason for the poor management of Her Coffee lies in the decision-making rules, because it does not take the form of setting up core shareholders or "class committee", but stipulates that all decisions need to hold shareholders' meetings, which directly leads to the high cost of decision-making. When holding shareholders' meetings, we often encounter the problem that a person will hold a meeting to vote repeatedly, which leads to many decisions having to be delayed again and again. Since its opening, Her Coffee shareholder meetings have been organized several times, but the actual number of shareholders present is limited, and the core decision-making circle has been changing, people continue to come in, people continue to fade out. Her Coffee has held dozens of online and offline meetings from fund-raising, naming to the distribution of various affairs. Although the crowdfunding model has strengthened the participants' sense of ownership and can integrate the resources brought by shareholders at a low cost, due to the fact that everyone has full-time jobs, meetings are often absent, and as the company's affairs become increasingly busy, shareholders' enthusiasm is no longer so high.

In addition, the biggest drawback of crowdfunding model in management is that there are either multiple management or management gaps. Her Coffee also has such problems. Her Coffee nominally has 66 shareholders, these 66 returnees Bai Fumei have their own jobs, and most of them are "three high" people, busy work, usually no time to manage the coffee shop, even if occasionally come to the coffee shop on weekends, often bring friends to "curiosity", and happily tell their own crowdfunding stories, rarely really help the operation of the coffee shop. In the final analysis, this crowdfunding is not so much venture capital as dream fund or ticket consumption. Originally, "people gather firewood", but behind the glamorous appearance of crowdfunding, the mentality of shareholders who say "it doesn't matter if I don't collect firewood" is also widespread. In addition to being unable to take care of it, another important reason is that there is no way to take care of it. As the saying goes, "three cobblers are better than Zhuge Liang". However, in many cases, the more people involved, the harder the idea. The end result may be that one monk carries water to eat, while three monks have no water to eat. Her Coffee because of the large number of participants, leading to the decentralization of power, operation and management confusion, you have your ideas, I have my ideas, and then led to the operation so far, the cafe has been in a state of loss.

(2) opening a store dreams of romance, but the operation mode is confused and lack of planning for the future.

Many women used to have a romantic dream of opening a flower shop or a cafe or bar to sell something they particularly like, so they can't help idealizing this originally pure business. but after all, the investment to open a shop is not small, so it is really a good thing to open a coffee shop through crowdfunding to realize the dreams of many women. As a fragmented equity investment, Her Coffee crowdfunding attracts more participants with shareholder feelings but a lack of understanding of being a boss. In other words, every woman has at least a romantic dream, which includes opening a flower shop or a book bar or cafe, running what she likes and idealizing pure business.

However, after all, a dream is a dream, no matter how romantic the dream is, whether the dream can be realized or not will be tested by the market. In terms of the format of the industry, the competition in cafes is relatively fierce at present, and there are too many places for leisure and entertainment, so it is very difficult to get back the cost by selling coffee. Even if there is a certain additional income, the effect on the financial return of the cafe is limited.

Sales at Her Coffee Cafe have been growing in the first three months of its operation, but after the first three months, the expectation of the cafe with the most beautiful shareholders in history has faded, and the number of people who come and go to the coffee shop every day has dwindled after the beautiful owners have run out of contacts. The first time customers are willing to go to the Her Coffee coffee shop from west to east of the city is not to taste the coffee, but most of them want to feel the atmosphere of the coffee shop opened by 66 beautiful women. However, after the freshness, there are few repeat customers. After all, most of the customers who go to the coffee shop are there to taste the coffee, not to see the beautiful women.

Despite the plight of continuing losses, many Her Coffee sponsors hope to maintain the coffee shop business and maintain their dreams. In the final analysis, Her Coffee beautiful owners are not interested in whether the coffee shop itself can make money, but want to make the crowdfunding model work, so that these shareholders from all over the world gather around the coffee shop to form a continuous network and various information resources. In the coffee shop industry, which is so competitive in the market, the beautiful owners of crowdfunding cafes all hold such an idealized consciousness to open and operate, do not act in accordance with the laws of the market economy, and lack a clear mode of operation and plans for the future. subsequent losses and failures are expected.

(3) lack of commercial awareness, it is difficult to balance income and expenditure, and it is difficult to sustain operation.

The biggest advantage of crowdfunding projects is that they can quickly solve the problem of funds and share risks, but as for the advantage that many people imagine that they can make full use of their contacts and promote consumption, they are actually looking at the moon in the water. Although most crowdfunding coffee shops have high expectations for the resources brought by the circle economy, this is not the case. The actual operation of the project depends on the market, and knowing how to manage is more important than contacts.

When the small owners of almost all crowdfunding coffee shops were asked what to do if their business performance was poor in the future, they almost unanimously replied, "We are not for profit." In their view, the crowdfunding coffee shop is not only a very new and interesting form of entrepreneurship, but also the petty bourgeoisie atmosphere and the function of the natural communication platform that the coffee shop itself exudes is their most important selling point. Facts have proved that for most of the shareholders who participate in crowdfunding, the talk of "not for profit" or even "public welfare" is only a high-sounding high-sounding tone. after all, thousands or even tens of thousands of yuan of hard-earned money has been poured into it. most shareholders still hope that the coffee shop can make money and bring a return on investment, even if it is not profitable, if the coffee shop can maintain its operation. But if losses persist, who will bear the funding gap? The success of crowdfunding for the first time depends on hopes and dreams, and when the hope of profit is broken, how many people are willing to throw money into this bottomless pit of loss through the second crowdfunding?

From the early days of Her Coffee, shareholders do it according to their own perceptual perception, rather than rationally deal with the market through data analysis, coupled with the reasons for different styles, there are different difficulties in production and management. On the other hand, too little consideration is given to business issues, and there is no logic in content design, raw material management, gross profit margin approval and attrition monitoring, which is a big loophole in management. According to media reports, another shareholder told the media that on the one hand, Her Coffee's dilemma is that the rent is too high, there is no flue in the store, can not cook to provide light meals, limiting the development of cafes. If the cafe is not profitable, there will be a shortage of funds, causing the store to fall into a dilemma.

(4) lack of professional and coffee-savvy management team

The reason for Her Coffee's transformation is that the crowdfunding model has hit the ceiling, and beauty itself can't solve the management problem. Shareholders of Her Coffee attribute the problem to "no problem in decision-making and lack of landing people", showing that none of Her Coffee's 66 entrepreneurs are good at it, they all have their own daily jobs, and most of them are "three high" people, busy with work, and have limited time and energy to invest in the management of cafes, especially not familiar with the coffee industry. Besides, it is not easy to open a coffee shop across the mountain. The location, location, decoration style, selection of coffee bean materials, coffee roasting technology and food matching are all very fastidious.

In addition, Her Coffee is positioned as a women's cafe with a strong petty bourgeoisie atmosphere in its design: dim lighting, elegant music, pictures of many beautiful shareholders on the walls, books on the big bookshelves and artistic atmosphere. Such a design is indeed suitable for women with more romantic feelings, but obviously, CBD, which is dominated by business people, is not suitable for the positioning of Her Coffee people. In places like CBD in Beijing, there are a large number of business people, most of whom are busy at work, discuss things or relax themselves, and the coffee shop close to the office has become their first choice to ease their mood. Many business investors choose the coffee shop and do not put the taste of coffee first, they pay more attention to the atmosphere and the commercial value it can bring to them.

In addition, the daily affairs of Her Coffee Cafe are trivial and very many, and it still needs to be managed by special personnel, otherwise there are too many opinions and it is difficult to unify, and other entrusted shareholders really do not care about day-to-day operations. Therefore, if you want to make money in a crowdfunding coffee shop, you must first require at least one or two shareholders who have relevant entrepreneurial or management experience, or hire a professional consultant to carry out the preliminary plan; secondly, after opening, we must form a set of effective management system, which not only ensures the rights and interests of shareholders, but also does not allow every shareholder to express their business opinions at will, leading to confusion in business thinking.

It is reported that Her Coffee is preparing to adjust the existing crowdfunding model, preparing to centralize the ownership structure and discuss the introduction of one or two major shareholders, whose shareholding will be as high as 40%, 50%, and hire a professional team to implement the management. Let professionals do professional work, and then crowdfunding owners integrate some resources to boost the cafe, which may newly rescue the crowdfunding cafe from the shadow of bankruptcy.

Second, profit is the king, raising funds is only the first step, allowing the project to grow and make a profit, and improving the income opportunities of investors is fundamental.

Crowdfunding model is sought after by many entrepreneurs because of its low threshold, low cost and low risk. As can be seen from the Her Coffee case, raising funds is only the first step to explore a suitable business and management model, so that crowdfunding can gather firewood. For an entrepreneur, the phrase "not for profit" is after all just a high-sounding cover, and the ultimate goal of doing business must be to make money, otherwise it will have to close down.

Before crowdfunding, we should first make a good budget, determine the positioning and the amount of investment, and then make an initial budget for the first purchase of decoration funds, deposits, hydropower properties, manpower, and so on, according to the approximate market price. When Her Coffee opened the store, the original crowdfunding was only enough to cover the initial investment expenses. Except for the rent, the decoration, equipment and daily expenses of the store are not small. For her Coffee crowdfunding Cafe, crowdfunding is only the first step in building a platform. Starting from management, when an enterprise enters the actual operation stage, it needs to operate according to a normal company model, including the chairman, general manager, financial director and even executive director, all of which need professional people to do.

Third, the way out of Chinese crowdfunding: the establishment of modern corporate governance mechanism

(1) to realize the separation of ownership from the right of management, allowing the rich to invest money and allowing professionals to operate.

The modern corporate governance mechanism requires a clear corporate governance organization and a perfect property rights mechanism, which can realize the separation of ownership and management rights. From the management mechanism of the Her Coffee coffee shop above, we can see that one of the important reasons why the operation is in trouble is that there is no perfect corporate governance mechanism. The beautiful shareholders of the cafe are a group of people with dreams, but they are also a group of people who are neither good at operating nor understanding the operation of the cafe. As the owners of the cafe, they are also operators, which directly leads to the poor management of the cafe.

Crowdfunding is based on the project and attracts investors, thus creating a large number of small and micro shareholders or investors, without the existence of any major shareholders, resulting in a large number of investors and scattered ownership, which further leads to the dispersion of management and decision-making rights, which brings great risks to the operation of investment projects, which leads to a great increase in the probability of investment failure. Her Coffee is a clear example. Her Coffee does not have a perfect corporate governance structure, shareholders are scattered, equity is not concentrated, there is no board of directors, there is no clear decision-making mechanism, "one person, one sentence" leads to confusion in business decision-making and inefficiency. The beautiful shareholders of Her Coffee also have no consciousness of the separation of ownership and management rights, have no plans to hire professional managers for operation and management, raise funds but do not know to adopt the daily business model of the separation of ownership and management rights, but rely on contacts to maintain business, and it is expected that Her Coffee is in business difficulties.

Therefore, if "Chinese crowdfunding" is to be successful, a key link is to establish a modern corporate governance mechanism, to realize the separation of ownership and management rights, and to clarify the power boundary between investors or shareholders and professional management talents. through a sound decision-making mechanism, supervision mechanism and incentive mechanism, a dynamic relationship of checks and balances is formed between the owners and managers of the enterprise. It should not only help to protect the interests of shareholders and stakeholders, but also give them enough business space to ensure that they act in the best interests of shareholders through effective supervision and incentive to the entrusted professional managers. only in this way can the competitiveness of the company be improved and the "Chinese crowdfunding" investment model be successful.

(2) to establish a sound operation and supervision mechanism, so that the owners can rest assured to delegate their powers and let the operators operate in accordance with the regulations.

Whether an enterprise can survive and develop mainly depends on its business performance. A mature enterprise not only has a scientific decision-making mechanism, effective implementation mechanism, but also needs a perfect management and supervision mechanism. Improving the operation and supervision mechanism of enterprises is of great significance to improve the level of enterprise management, safeguard the rights and interests of shareholders and enhance the profitability of enterprises.

Crowdfunding cafes like Her Coffee do not have a perfect operation supervision mechanism from the very beginning, which is shown not only in the process of fund-raising, but also in the process of operation. In the process of fund-raising, because a large number of strange investors are concentrated in one project, creating a lot of small shareholders, these shareholders are scattered in different places and have different jobs. It is precisely because of the dispersion and extensiveness of space that it is difficult to effectively supervise the funds raised, especially the effective supervision and management of the capital chain has become a major problem, not only difficult to ensure the actual use of funds. Also can not carry on the effective risk prevention. In the process of operation, there are more problems. First, the equal rights structure created by the crowdfunding cafe makes the shareholders have no restriction on each other, and their behavior is random, which not only brings high communication costs, but also brings difficulties to the supervision and management of high cost management expenses such as material preparation generated by the shareholders' meeting. Second, because most crowdfunding cafes do not adopt the management style of modern enterprises, they are unable to effectively supervise and manage the business status, financial revenue and expenditure, tax payment, marketing and other related work of the cafe.

Therefore, if crowdfunding cafes want to survive in the fierce market competition, it is particularly important to establish a sound operation supervision and management mechanism. First, it is necessary to improve the management and supervision of the capital chain, improve the efficiency of the use of funds, and ensure that the crowdfunded funds can be applied to the operation of the project. The second is to improve the operation supervision mechanism, which includes the supervision of the enterprise's development strategy, human resources, production, marketing and other operational conditions, to improve the decision-making efficiency and operation efficiency; the third is to improve the financial supervision mechanism to raise funds, use to control, reflect and supervise, and actively prevent and avoid risks.

(3) to establish a market-oriented enterprise operation system and act in accordance with economic laws.

Crowdfunding cafes do not manage and operate in accordance with the needs of market competition, resulting in poor operation or even losses, which is directly related to the original intention of the cafe shareholders. These investors value the petty bourgeoisie atmosphere and natural communication platform emitted by the coffee shop itself. They sell feelings, and a small number of investors are in order to meet their own public welfare and cultural needs. Profit is not their ultimate goal. However, it is obvious that not making a profit does not mean not losing money. When the income and expenditure is unbalanced and the coffee shop continues to lose money, the gap in operating funds is getting bigger and bigger. Instead of getting a return, investors have lost their investment. The so-called "public welfare" has become empty talk. Therefore, this idealized business model is also difficult to sustain, unable to survive in the standard enterprise management and fierce market competition.

Profits are the ultimate goal of an enterprise's production and operation, and Her Coffee Crowdfunding Cafe is no exception. Otherwise, no matter how beautiful the ideal is, no matter how noble the feelings are, they are passive water and rootless wood. In order to survive and develop, and ultimately expand brand influence, enterprises such as Her Coffee Crowdfunding Cafe must abandon the ideal mode of business decision-making, adopt a market-oriented enterprise operation mechanism, establish a perfect capital structure and property rights structure, form a scientific and standardized decision-making mechanism, and change the chaotic decision-making situation caused by the decentralization of equity at the beginning of crowdfunding enterprises. First, establish a good enterprise operation mechanism, establish a board of directors and other institutions according to the requirements of the modern enterprise system, and improve the organizational management of the enterprise. The second is to improve the ability of crowdfunding enterprises to conduct market research, improve the scientificity of site selection, accurately predict and segment the market, grasp the opportunities of market development and change, find target markets and target consumer groups, and combine their own market positioning to open up markets. Third, strengthen the internal financial control system of crowdfunding enterprises, improve the scientificity of budget and evaluation of project operation, pay attention to cost control and quality control in the process of production and operation, so as to maintain and increase the value of enterprise assets. Fourth, improve the motivation, restraint and regulation mechanism of crowdfunding enterprises, improve cohesion and centripetal force, restrain improper behaviors, and improve the rationalization and scientific level of enterprise behavior. Through the establishment of market-oriented enterprise operation system, the anti-risk ability of crowdfunding enterprises such as crowdfunding cafes can be improved, the business risks of enterprises can be reduced, and the profit goal can be achieved.

Source: Sina Think Tank