Let’s work together! (Or is that crazy?)A lack of job security makes a lot of Koreans think of starting their own businesses. But it’s easier said than done. That’s why it can be better to team up with like-minded people ― whether they are best friends or complete strangers.
The guarantee of lifetime employment in Korea is long gone, swept away by the 1998 financial crisis. The job insecurity that remains sometimes seems worse than the crisis itself. That’s why the thought, “I’m just going to quit everything and start my own business!” pops into one’s head about 12 times a day. But for most people, whose lives hang on their tiny salaries, it’s much too burdensome to go at it alone.
Instead, a growing number of people are teaming up to start new businesses ― even with total strangers.
One year ago, 11 people met on the Internet and decided to start a Vietnamese noodle restaurant. After months of annoyances, threats and fights, just three remained. Today, their restaurant, Pohaisan 420 in Banpo-dong, southern Seoul, is bustling with noodle-slurping customers, and they’ve changed their lives.
It all began with Mr. Lee Jung-hwan, 48, a former interior designer who had made several failed attempts to enter the restaurant business. Years later and struggling under a mountain of debt, he sought to console himself by chronicling his bitter experiences on the Internet. The website, “Opening New Restaurant,” (cafe.naver.com/foodshopopen), which he launched in 2003, also serves as a forum for others trying to enter the business.
About a year after starting the website, one desperate member posted a note titled “Nothing but flies here,” about his empty sandwich shop. Mr. Lee went to visit the shop out of curiosity and suddenly an idea buzzed in his head.
Several years earlier, Mr. Lee had tried Vietnamese noodles and thought it would make a great product for a restaurant one day. He even visited Vietnam, learning to cook from a local who had been in the trade for 40 years. His only problem was finding a partner to share the investment risk. Suddenly he realized that he had access to a sea of potential partners through his website.
He solicited interest and the response was impressive ― over 30 members wanted to join the venture. He narrowed the candidates down to 11 people, all of whom had different ambitions. Some only wanted to invest, some wanted to invest and work, and others could not invest but wanted to work. At a glance, they appeared to be perfect compliments to each other.
However, as actual preparations began for the February opening, difficulties surfaced. One person kept urging Mr. Lee to pass on his cooking secrets, and left when Mr. Lee refused ― the man simply wanted to start his own restaurant. Another guy brought in all of his relatives one day and demanded his investment back immediately or he would kill himself ― he had found a better opportunity. Others insisted on changing the menu. Some very talented and enthusiastic people dropped out due to opposition from family members. For all of them, the two-year contract they had signed was only a meaningless piece of paper.
The two people who stayed on ― Shim Gwang-woong, 32, a former museum curator, and Kim Byung-han, 30, who studied hotel management ― felt that it all boiled down to trust.
“The other two men have great self-respect. Such people cannot cheat others. That’s why we got into the same boat,” said Mr. Shim.
“The other two are very talented and versatile. I felt I would not fail if I worked with them,” said Mr. Kim.
It was not easy to continue a business that had originally started with 11 people. The remaining three worked extra hard to make up for shortcomings in the budget. Although they wanted to do everything themselves, they had to hire employees to do the serving. In addition, despite liking each other, conflicts did occur ― even about how to design the flyers (classy or attention grabbing?). But through thick and thin, they did not lose trust in one another. They say that this was the biggest reason why the restaurant quickly gained ground amid unfavorable conditions.
Five months after the restaurant opened, they are clearly doing well, with daily sales over 500,000 won ($490). Mr. Kim is in charge of management, while Mr. Lee and Mr. Shim are working on starting a franchise with people that were attracted by their story. A second restaurant has already opened in Myeongdong, and a third will open soon on Jongno, both in downtown Seoul. Their business is not large, but has been a fast and solid success. Mr. Kim credits his partners for the victories.
On starting a business together, he is philosophical. “Looking back, it has all been a ‘trust project.’ If we had not believed in our success, it would not have been possible. The three of us talk about how such trust actually exists in today’s world. Now that is really newsworthy,” he says with a laugh.
“It is like looking for a potential spouse. Just as you would soon get divorced if you married someone for their looks, if you only concentrate on the outer appearance to find a business partner, you would end up parting ways. You have to become partners with someone you know well.”
That’s the opinion of the co-founders of Communique, Shin Myung (37) and Shim Young-soo (36). Maybe it is because they are both married with kids. When the subject of partnerships come up, they immediately concluded that “business partnership = marriage. We spend much more time with each other than we do with our husbands, so we get along very well.”
The two have known each other for ten years, when they both worked in the public relations department of a hotel. They were in the same industry, almost of the same age, thus they stayed close, almost like sisters. Ms. Shim’s 10-year old son still calls Ms. Shin “Auntie Myung.”
The two decided to work as partners three years ago. Ms. Shim brought up the matter first. Ms. Shin was hesitant. She had seen many cases of blood relations fighting over money matters. Ms. Shim suggested they go to a fortuneteller to see if they were truly compatible. However, Ms. Shin refused citing her religious beliefs. “I’ve been a Sunday school teacher for ten years.” Shim visited a fortuneteller in Insa-dong on her own. The fortuneteller was confused. “This is not about marriage, why are you here?” he asked. But he did look at their compatibility based on their birthdays and time of birth, and foretold, “Water and tree meet to bear ripe fruit.” Though she does not believe such things, Ms. Shin was also happy about what the fortuneteller said, and the two immediately set up their own company.
In August of 2002, they opened their 82-square-meter office in the Gangnam district with seven employees. They did not have a written contract, but agreed on the principle of “equal investment, equal profit sharing.” They both put in 50 million won ($49,000) for the office down payment, supplies and other initial payments. With each month, they balanced their books and split the profits 50-50, down to the last 10 won.
The work was divided according to their majors and interests. Ms. Shim, a science graduate, took charge of cell phones and other IT businesses, while the trendy Ms. Shin headed the fashion and beauty business. Their roles were divided in the office as well. Ms. Shim is very detail-oriented, proactive, and at times very tough. Thus she took the role of the strict father. Ms. Shin, on the other hand, is very perceptive and sensitive, so naturally she plays the role of the wise mother.
There are now eighteen employees in their staff. They are all women, but there are two outside advisors ― their husbands. Both women eagerly praise their husbands, saying that their business could not have succeeded if it weren’t for their husbands’ help in raising the kids and doing the housework. Could there really be no conflict between the two chief executive officers? Ms. Shin smiles and says, “Ms. Shim had a baby last month, so I had to work overtime for the past three months. We share the profits evenly. This is unfair. So I’m planning to have a baby next year.”
Top 10 'Do's
1. Once you decide to trust your partner, do not doubt him or her.
2. Listen to the experiences of others.
3. Assign duties and responsibilities precisely.
4. Document all promises.
5. Talk about all issues.
6. Be considerate about your partners.
7. Develop one's own specialty.
8. Make an accurate division of profits.
9. If the partnership no longer seems viable, separate wisely.
10. Do not end the relationship after parting.
by Nam Koong-wook, Choi Min-woo