Many Vietnamese businesses go bankrupt because they don't know how to share profits.

To approach the 4th Industrial Revolution, Mr. Nguyen Manh Hung - Chairman of the Board of Directors of Thai Ha Books Joint Stock Company is concerned that, in addition to facing many difficulties in mastering 4.0 technology, many Vietnamese people are currently not much interested in the field of personal finance or corporate finance.

In particular, there are still many leaders of corporations and large business owners in Vietnam who have not invested much knowledge in the financial field, especially finance in the era of the 4.0 Industrial Revolution, especially organizations and individuals who are thinking of implementing startup projects.

Commenting on this, Mr. Do Cao Bao, Deputy General Director of FPT Group, said that Vietnam is a poor nation and has never had a tradition like many other countries when they have many generations of rich people, so Vietnamese people do not have a tradition of financial culture.

According to Mr. Bao, while in countries with the largest proportion of rich people in the world such as in Europe or in the US, financial culture education has been carried out in each wealthy family for many generations, in Vietnam, financial culture education is very difficult to implement when Vietnamese people do not have a traditional rich background, only very few families in a certain generation suddenly become rich. Originating from this root factor, the way to educate about financial culture for the next generation in Vietnam is not fundamental.

“Most Vietnamese individuals have not been educated on how to earn money, manage and maintain money, how to make money profitable, how to use it and how to spend it. When individuals themselves have not been properly educated on financial culture, it is obvious that financial management will not be standardized,” Mr. Bao assessed.

From the business perspective, Mr. Bao also noticed that state-owned enterprises in Vietnam are often established early, are more numerous and have a long history. While other small businesses are often only in operation for a short time, and have very little experience in developing and successfully accumulating capital to manage profitable cash flow.

This has led to a reality, according to Mr. Bao, that in the past, many businesses initially had no capital but still operated with self-mobilized capital and personal contributions. But after only 5-7 years, when the business was successful in the market, the investment capital began to make a profit, and the businesses wanted to meet to discuss profit sharing, which led to the situation where most of these businesses disbanded.

“A very “ridiculous” reason why many large enterprises have had to split into many different companies is because after doing business successfully, they did not know how to divide the profits. When the company was in difficulty, the staff was very united and “worked together”, but when they were successful, because they did not know how to divide the profits, many enterprises went bankrupt,” said Mr. Bao.

More optimistic about the current generation of Vietnamese enterprises in the trend of international integration, Mr. Bao commented that many enterprises have begun to establish financial management standards, operate under domestic and international audits, and have public financial reports...

In particular, when the Industrial Revolution 4.0 appeared, many Vietnamese enterprises have accessed new technologies such as Blockchain to manage banking finances according to international standards. Enterprises already know the capital structure, share ratio, capital contribution from the beginning of establishment and dividend and profit distribution... according to the initial contribution level, so accessing finance in the Industrial Revolution 4.0 is really not a concern./.

Nguyen Quynh