Building a business
Companies everywhere go through their ups and downs. But the important thing is that regardless of the size of the company, it should have what it considers to be its core businesses. My personal experience is that if you have core businesses in different industries, you can better manage cyclical economic downturns. In 1950 when I founded Cheung Kong, I started with only $50,000. I had to be very cautious with my capital. My motto has always been to seek growth while maintaining stability, and maintain stability while seeking growth.
Choosing the right path
Because of increasing competition, it isn’t easy to be an upstanding businessman. If an unprincipled man chooses the wrong path, he may get lucky and come away with riches. But the wealth will be squandered just as easily as it was gained and he will be putting himself at risk with the authorities. There are many opportunities on the mainland, but it is important to choose the right path. There are unscrupulous businessmen in Hong Kong , too. But they rise fast and fall even faster.
Macroeconomic adjustments and private enterprises
Macroeconomic adjustments are important. My personal view is that Central Government policies will not allow the national economy to fluctuate wildly.
Our group operates many different types of businesses, and I am personally involved in every one of them. If you want your business to succeed, you have to get involved. Your energy will come from your interest. This point is also relevant to mainland’s private enterprises. You have to make gradual progress rather than speculate. When you face difficulties, you should focus your interests and work to change your circumstances.
Mainland entrepreneurs have to think of ways to create their own markets. Because of the barriers presently in place, profit margins for manufacturers are razor thin. Exporters are doing much better. As the Chinese economy gains pace, mainland entrepreneurs will have plenty of opportunities. But for our entrepreneurs to achieve great success, they will have to find their own markets, which is essential if you want to build a multinational corporation.
The importance of knowing when to stop
From the time I started working at the age of 12 to the time I started my own business at 22, I went through ten very difficult years. I have now been working for over 60 years. I have seen some people in Hong Kong achieve easy success, but their failure came just as swiftly. Why? It’s important to know when to stop. Greed is the reason behind at least half of all business failures.
Our group features a western-style management. As head of the company, I also bring what we Chinese consider compassion. If your staff makes a contribution to your company and hopes to stay with the company for the long-term, and you feel that they have integrity, then you have to recognise them and make them feel secure about their future. Trust is important, but you also need a system of checks and balances. If you hire someone arbitrarily, when things go wrong, you’ll not only damage your own reputation, but also that of the company and the person you hired. A system of checks and balances prevents such problems.
Balance between making a profit and giving
Everyone agrees that as a businessman, you should buy low and sell high. That’s how you make money. As a public company, you must do everything to create value for your shareholders. But a foundation is different. Every penny that I inject is after-tax earnings. My major source of income is dividend from my Hong Kong and overseas companies. Then I put this money into the foundation and contribute it towards education, medical care and other welfare projects. There is no conflict of interest.
Successful entrepreneurs are revered in western countries. But in our traditional society, businessmen are held in relatively low regard. In western countries, and in the US in particular, successful businessmen will donate a great sum of money to contribute to society when they retire. I hope everyone here will achieve success and contribute what you can to society.