Name
Course
Tutor
Date
My Family Business Profile
The Business
My family business encompasses a group of hospitals within the Xin Jiang province and Beijing city. In total, there are four autonomous businesses headed by my father, who is the Chief Executive Officer and the founder. Xin Jiang Tian Shan hospital, Xi Bu hospital, and Wu Zhou hospital are all found in the province of Xin Jiang. The Beijing Ban Jiao is the most recent branch started in 2011. It is located on the outskirts of Beijing city. The four hospitals are relatively big. The largest of them all is the Xi Bu hospital. It has a bed capacity of 25 and 15 permanent members of staff. The sizes of the rest of the other hospitals fall within the range of 15 to 20 in terms of in-patient bed capacity. This essay provides an interview with a family member and seeks to create the family business profile in a historical context.
In an interview with the founder, Dr. Zhixiang Zhou, he revealed that he came up with the idea of opening private hospitals in the mid 90’s. However, the idea never came into being until 1999 when he took his first bank loan to open a small clinic within the town of Xin Jiang. During the startup, he only had one assistant and could only deal with outpatients. He being a neurologist, his first clinic focused on offering specialized care to local residents suffering from neurological disorders. He invested in modern equipment just for diagnosis and treatment of diseases of the heart.
Soon afterwards, he developed a brand within the local town. Many patients from neighboring provinces began to visit the hospital for treatment because they had confidence in the services of the hospital. That marked the beginning of the chain of hospitals that my father opened. Each hospital specializes in one disorder.
The Xin Bu was the second hospital in the chain. It was founded in 2001. Dr. Zhou had collaborated with a friend called Goa, to put up a clinic that specialized in cardiac disorders. Dr. Goa was a trained neurologist with no capital or entrepreneurial experience. My father provided the blueprint upon which the operations of the new establishments were built. On the other hand, Dr. Goa was the lead doctor. He composed a team of medics whose sole purpose was to deal with diseases of the nervous system.
Wu Zhou lies a few Kilometers in the outskirts of the province. The hospital, with a bed capacity of 15, deals with matters urology. Most of the patients have minor ailments with their urine- passing function. However, some suffer from serious conditions such as kidney stones, renal failure, and kidney failure. The hospital offers specialized treatment for the urine cycle such as kidney dialysis, and transplants.
The most recent hospital is a cancer center in Beijing city. The idea of Beijing Ban Jiao Hospital came into being in 2011 when my father collaborated with the University of Beijing. The hospital doubles as a center for cancer research. Scholars from the University of Beijing obtain their subjects and samples from the center. Just like the rest, the hospital specializes in diagnosing and treating cancer and related diseases. It also harbors a counseling center for survivors and those who are battling cancer.
Historical Context of the Business environment during the startups
According to Dr. Zhou, all the hospitals made normal profits during their first year of operation. Although it took long to offset some of the loans, the business could fall under the banner of ‘good business ventures.’
Following a study conducted by Burke et al (3), many Chinese people had started to move away from herbal medicine for a number of reasons. Among them is the issue of modern culture. Most educated young people would rather take Western medication than Chinese herbal medicine. In a rather unfortunate revelation, many Chinese youth think of herbal medicine as backward and ineffective. Others cited the lack of ease of administration as the primary reason they prefer western medicine. Quite often, herbal medicine requires other substances, such as green tea, when taking it. In the modern society, it is almost impossible for someone to access green tea three times in a single working day.
When my father was opening his first clinic, most of the local residents were in the process of embracing western medicine. The people were changing their view of western medicine from a construct of Western imperialism to take advantage sick people with the prospects of getting better, to an alternative solution to their health issues. The shift from herbal medicine to western medicine forms part of the reason that my father’s Pioneer clinic landed on a soft spot. According to Sissi and Benzie (4), the percentage of the Chinese population, relying on herbal medicine was 40 by the year 1995. The figures have been dropping ever since. The current generation of China prefers to integrate herbal medicine and western medicine to cancel out the deficiencies of each other. It is for this reason that 90% of the hospitals in china have a section for Chinese Traditional Medicine.
In a paper by Tang (4), China has been experiencing an influx in lifestyle diseases over the last few decades. Surprisingly, the government is still focusing its energy on communicable diseases such as HIV and typhoid. The number of people suffering from heart diseases is insanely high. The government does not subsidize such specialized services because they are yet to achieve the status of national disaster. The increasing number of lifestyle diseases formed the basis of clients for the first clinic that my father ever created. The number of hospitals that offer specialized cardiologic services was limited and they were expensive. Demand was high for such services. Upon the first month of opening, the clinic enrolled about 50 regular patients. The number of patients in demand of the specialized services kept rising over the months. At the end of the first financial year, the clinic had served 1,344 patients with various heart conditions (Yao et al 23).
In 2000, the government of China launched a development program dubbed the Western development policy (China.org 6). The primary agenda of the program was to develop the western provinces of China since they were lagging in terms of development. The government launched 12 key infrastructural developments alongside policies that favored betterment of the health sector, education, trade and human resources. Due to the development program, the number of people migrating to Xin Jiang and other provinces in Western China increased significantly. The investment programs increased the spending ability of the residents of the formerly sleeping province. The people of the locality could now afford specialized care from private clinics.
Before opening the Xin Jiang Tian Shan hospital, the number of people who had invested in clinics that offer specialized care was limited. Maybe they thought that the area was not economically viable to sustain the idea or the demographic composition of the province was not worth investing in.
The fact that very few people had invested in specialized clinics motivated my father to open his cardiology clinic. Later on as many people began to move to Xin Jiang, the number of clients improved. Although other smaller clinics began to mushroom, my father’s clinic had already become a brand and commanded a significant portion of the market. The improving economy of the province and the increasing population led my father to see a rise in the number of people seeking other forms of specialized treatment. That is when the idea of joining forces with a neurologist came into being. The idea for the third clinic also came up due to the demand created by the population influx because of the Western Development policy.
The profits for the three clinics through the years have been rising. In the first year of the Cardiology clinic, it made revenue of $ 1.8 million and an untaxed profit of $0.9 Million. The second clinic started on a low note but it gained momentum on the second year of operation when it made an untaxed profit of $1.6 million. The third clinic in Xin Jiang started on high note with an untaxed profit of $1.2 million during the first year of operation. By the year 2008, the hospitals were well established. They generated combined revenue of $8 million.
In 2009, the Ürümqi riots marked the darkest point of the hospital business. The members of an ethnic community called the Uighur clashed with security forces in what they called government oppression. The Uighur are an ethnic minority primarily found in the desert parts of Xin Jiang (Wong 5). The community is predominantly Islamic and the major economic activity is cattle rearing. Apparently, the economic policies that the communist government had introduced in the area were working in their disadvantage. Activists and community leaders rallied their people to storm the streets of Xin Jiang and cause havoc. The riots that lasted for a month had a negative impact on the economy of the region. The three clinics recorded a near zero number of patients during the month of unrest.
Some of the assets belonging to the hospital were ensnared in the malicious acts of the rioters. The rioters burned three vehicles belonging to Wuo Zhou clinic specializing in kidney diseases. The commotion also led to the destruction of the kidney dialysis machine. At the end of the month- long rioting, the three clinics had lost a significant amount of revenue and assets with a combined worth of $1 million.
The development of Beijing also took a toll on the family business. The growth of Beijing attracted many people from the other provinces. Currently, the population of Beijing stands at 40 million (China.org 7). Five years ago, a large portion of Beijing’s population was living in the countryside and other rural provinces. The mass emigration of people from Xin Jiang to Beijing led to a drop in the number of patients visiting my father’s hospitals. He had to lay off some members of staff. With numerous adjustments, the clinics were able to make profits again.
Works Cited
Burke, A., Wong, Y., Clayson, Z. Traditional Medicine in China Today: Implications for Indigenous Health Systems in a Modern World. American journal Public health; 2003; 93 (7).
China.org. The Development of Western China. 2016. Retrieved from <http://www.china.org.cn/english/features/38260.htm>
Sissi, W., Benzie, I. F. (2003). Herbal Medicine an Introduction to Its History, Usage, Regulation, Current Trends, and Research Needs. Journal of Medicine; 2003; (78);5.
Tang, S., Ehiri, J., Long, Q. China’s biggest, most neglected health challenge: Non-communicable diseases. Infect and Poverty; 2013; 56(6).
Wong, E. (2009). Riots in Western China Amid Ethnic Tension. The New York Times, July 2009. Retrieved from <http://www.nytimes.com/2009/07/06/world/asia/06china.html?_r=0 >
Yao, C., Wu., Z, Wu., Y. The changing pattern of cardiovascular diseases in China. Pubmed; 2003; 9 (34)