Wensi Sheng has diverse business experience across North America, China, and South Asia. As a creative individual, she enjoys her partnership with Mission Q, an escape game company in Malaysia. As she has now moved to Canada, the best part of her venture is that she still gets paid as her partnership investment make profit, while attending graduate school.
Starting An Escape Room Business
Pinkfolio: Mission Q looks awesome. What encouraged you to start a new business in a foreign country?
Wensi: Firstly, the market. I was fascinated by the escape room concept after trying it in Shanghai. But the market in China was very competitive so it led me to look into “opening a business in blue seas”. Secondly, having a reliable partner in Malaysia who was trustworthy, capable and dedicated, which made my foreign investment less risky. Lastly, the budget. In comparison to opening a store in Canada, or other developed countries, investing in Malaysia was more affordable for me.
- Being the first one in the market with an idea allows you to gain the most profit before competition increases
Pinkfolio: What were the most challenging parts of starting the business?
Wensi: Marketing for sure. We had a great business idea and product, but we underestimated the importance of marketing. Without effective marketing, no one would ever know the business exists. If I had a chance to do this again, I would relocate half of my budget in marketing.
- Budgeting your business is one of the most strongest financial tools to help control your finances
- Effective marketing creates brand awareness and it’s important to align your objectives with customers
Pinkfolio: Was the Return on Investment (ROI) better than buying financial products or real estates? What was the biggest financial lesson learned from this partnership investment?
Wensi: I wouldn’t say the ROI is absolutely better. Partnership investments certainly involve a higher risk in comparison to other types of investments. However, if you’re the first in the market and are well prepared, you may obtain a higher ROI and feel a lot more accomplished.
Since, you have to spend your savings in the business, the biggest financial lesson I learned from this investment was that you should never invest more than you can afford. Initially, we lost money in Mission-Q because of inefficient marketing. Although it eventually survived from its down time, the risk of losing all your invested money is still there.
- ROI is the return on investment, which measures your costs to profit
- Having a financial plan helps manage unexpected expenses and control cash flows
Partnership Investment in a Foreign Country
Pinkfolio: After moving, how did you communicate and protect each partners rights living in different countries?
Wensi: I believe each country has a different legal system to protect partnership investments. To ensure every partner receives accurate information we use an independent accountant that creates quarterly financial reports. We also hold monthly meetings to discuss plans and share documents. We’ve also set our bank account to request approvals from other partners to withdraw money for major expenses, to make sure our money is being used appropriately.
Pinkfolio: What’s your overall advice for those who want to invest into a partnership?
Wensi: Never over trust your partners (even if he or she is your best friend), always read all legal documents, establish a mutual monitoring system and strictly follow agreements to ensure your rights are protected. Also, always prepare for worst conditions, such as emergencies, losing your partners, or closing down the business.
Understanding Risk and Liquidity to Invest
Pinkfolio: I understand you have other investments too. What is your overall advice for those who have not yet invested?
Wensi: Learning how to diversify my investments was the key to my success. I divided savings into three categories: high, medium and low risks. In order to place the funds in the correct category, I always considered liquidity in terms of when I would need the money. For instance, if I need $10,000 to pay my mortgage next year, I would purchase low risk financial products and if I had extra money that I wouldn’t use for the next three years, I would purchase higher risk financial products.
- Liquidity measures how fast funds can be altered into cash, basically the ability to sell an investment when you want