Soho, as a low-cost, low-threshold entrepreneurial model, is highly desired in the field of foreign trade. However, the reality is harsh, and not every foreign trade professional is suitable for Soho work. So, what are the conditions or thresholds for becoming a Soho entrepreneur? Let's explore that in this article.
As an intermediary between factories and clients, there are two mistakes that Soho entrepreneurs must avoid:
1. Never hand clients directly over to factories.
2. Avoid venturing into industries with which you are unfamiliar.
Engaging in foreign trade Soho requires a minimum of three years of experience in the foreign trade industry. Many foreign trade professionals, after just a year in the industry, may secure impressive orders on their company's platform and consider transitioning to Soho. However, these individuals are likely to end up as mere "cannon fodder" in the industry. Why is three years considered a baseline?
In the first year, one needs to learn the basics of foreign trade operations and become familiar with the products. Familiarity with products involves not only understanding the specifications, materials, packaging, etc., of your company's products but also gaining in-depth knowledge of competitor products in the market.
The second year involves entering the practical stage, being able to independently handle client development, inquiries, quotations, sampling, order production, and other communication aspects. Knowledge in these areas is crucial for Soho work.
By the third year, one should progress to a deeper level of enhancement, including market analysis and planning, finding one's niche, and establishing stable relationships with order clients.
Therefore, three years of foreign trade experience is a foundation. During these three years, you will go through numerous orders, interact with various clients, and collaborate with different suppliers. At this point, you need to coordinate relationships between clients, factories, and your company. If you can handle these tasks effectively, transitioning to Soho should come naturally.
Business acumen is also a crucial criterion for determining whether you are suitable for Soho. Business acumen encompasses not only aspects like client development and negotiation but also knowledge in maintaining old clients, managing relationships with factories, and understanding logistics. In short, Soho entrepreneurs need to possess comprehensive skills covering all aspects of foreign trade.
If you have the above elements, you also need to formulate a medium to long-term business plan. Many foreign trade practitioners enter Soho with ambitious plans, considering setting up a company, hiring foreign trade professionals, and managing finances. However, these might not be necessary in the initial stages. It's advisable to start as an individual Soho entrepreneur, expanding the team only when the business stabilizes or reaches a certain level of development.
At the same time, do not expect significant achievements in the short term. Most Soho entrepreneurs find it challenging to achieve success quickly. It is recommended to set a one-year psychological expectation, planning the tasks and goals to be achieved within that period. Have clear psychological expectations.
During the Soho process, you will realize that, compared to clients, coordinating with factories is the most challenging aspect. While handling client relationships is something most can manage, dealing with factory relationships is more unpredictable. Many fail because of problems that arise when dealing with factories. Therefore, finding a stable and reliable factory in the initial stages is crucial.
Finally, regarding finances, though there is no fixed numerical standard, having sufficient reserves is essential. These reserves should cover daily expenses, normal business transactions, and some contingency funds. If you are not prepared for the above issues, it is recommended to continue working honestly. Additionally, it is essential to understand that Soho is undoubtedly more demanding than regular foreign trade, and this is an undeniable fact. Therefore, if you are considering Soho, be mentally prepared for the challenges ahead.