Previously, Xibei said that his cash flow could only support three months. Many people dismissed it and thought it was a shame.

A Tsinghua professor conducted a survey and found that 85% of small and medium-sized enterprises could not survive for three months, and about 30% of them could not survive for one month.

Many people who have never run a business find it unbelievable that a company does not even have cash flow to support three months. Others say that such a business will go bankrupt if it goes bankrupt and has no value.

In fact, this statement is very one-sided, and the chain effect will affect everyone. Because business closures will cause a lot of unemployment. These job losses will in turn affect consumption, creating a domino effect.

For those who don’t understand, let me give you an example. Many senior white-collar workers who buy houses and cars in big cities will be unable to live without wages for a month. In fact, companies have the same situation.

Market competition is very cruel. If an enterprise wants to develop, it must continue to invest. In the current competitive landscape, many companies are swimming against the current and will retreat if they do not advance.

Those who open factories must constantly update equipment to meet market demand. Those who are engaged in real estate must constantly acquire land to maintain the development of the company. Those who are engaged in e-commerce must keep up to date with the latest trends, test new models, and enhance delivery capabilities.

Any industry has an effect similar to "weight accumulation". When you are not developing and others are developing, your share will be increasingly diluted by others. Therefore, if you want to survive in the long term, you must continue to increase investment.

The investment cycle is getting shorter and shorter, and the speed requirements are getting faster and faster. Therefore, small and medium-sized enterprises must seek loans under the premise of limited funds.

Once the income stops, it means that there will be problems with capital turnover. Increased purchases, more employees, and the accumulated interest will all become a huge burden for the company.

A number of companies have closed down now. In fact, in the long run, there will definitely be companies with sufficient funds to fill their gaps.

But for the owners of these bankrupt companies, it is a fatal blow, and they will be saddled with a lot of debt.

It is likely that large companies will fill the shoes of failed companies, because they have more abundant funds and can occupy the blank market more efficiently.

Compared with the companies that have now closed down and been liquidated, I am more worried about those companies that are still hanging on.

Any boss treats the company like a child, and even sells cars and houses for the sake of the company. He will not be willing to abandon his company until the last step.

Some bosses with a strong sense of responsibility will not have the heart to lay off employees to reduce costs, but the final price may be very high.

Most of the companies that are now starting to lay off employees and cease operations are actually trying to stop their losses in a timely manner. If you still have the money in hand, you can use your previous resources to re-enter when the market improves.

But if you are saddled with huge debts, the future may be very worrying.

Faced with the first wave of business failures, to be honest, you won’t feel it if you don’t run a business. A friend of mine's travel agency in Shenzhen has closed down before the Spring Festival, losing more than 7 million yuan a year and going bankrupt. The CBD office building in Qianhai, Shenzhen, has been vacant since 2017 until before the Spring Festival (previously, the monthly rental income under normal circumstances was 120,000). I couldn't bear it anymore, so I spent hundreds of thousands more to convert it into an apartment for rent. Judging from industry experience during this epidemic, many companies will not be able to survive and will go bankrupt.

Typically, travel agencies, real estate agencies, the catering industry, the exhibition industry, and industries with large crowds such as the Yiwu Commodity Market will be affected by closures of at least three months, and the labor costs during this period will be affected. Wages are being paid as usual, but corporate cash flow does not flow back normally. For most companies that rely on high corporate turnover rates, especially high debt, it will be difficult to persist.

Take my friend’s travel agency in Shenzhen as an example. His main travel routes are Southeast Asia and China. Among them, travel to Southeast Asia, especially Hong Kong, is the main revenue contributor. Last year, for well-known reasons, Hong Kong and Southeast Asia The market simultaneously came to a standstill. Due to the epidemic that started before the Spring Festival, a large number of domestic travel orders were canceled or lost. The main labor wages and other expenses caused his company, which was originally profitable in the first half of last year, to continue to lose money in the second half of the year. In the end, it lost more than 7 million yuan and had to reluctantly close its doors.

Judging from the epidemic situation, the impact will be first on industries with intensive human flow, mainly industries such as real estate agencies, business centers, and exhibitions, which will be the first to feel the pressure of closure. Other industries can basically be regarded as one-time losses due to the epidemic. After all, the country's overall economy is still growing. After the epidemic, the economy still needs to develop, and some demand can still be made up. As for catering and exhibitions, for example, the World Communications Conference has canceled its annual exhibitions due to the epidemic. Among them, companies like Nokia alone have lost US$3.5 million in exhibition expenses.

For chain catering brands such as Xibei Restaurant, Haidilao and Little Sheep, taking Xibei as an example, it is estimated that if it is closed for three months, it will lose more than 17% of its revenue, and the holdings Even with all the cash, the wages of more than 20,000 employees across the country cannot last more than three months.

In short, the epidemic has no mercy. In particular, a boss saw a WeChat message sent by an employee saying that he was willing to take less salary or not give up one month's salary during the Spring Festival to tide over the difficulties with the company. The boss was very touched - an employee who has a heart to give back and cares about the company's overall situation is more important than money and wealth. Not only did he pay his salary normally, but he also clearly told him to come back after the year for an increase in salary. I think this touching spirit of overcoming difficulties is even more needed at this time!

I am also an entrepreneur myself. It has been more than 6 years since my company was established. Share your experience.

What I want to say is that when running a business, you will encounter various uncertain difficulties, but this time the difficulties are relatively bigger. Therefore, I don’t think that the COVID-19 epidemic is the decisive factor in the collapse of these companies. At most, it is the straw that breaks the camel’s back. The same is true for other small and medium-sized enterprises that may go bankrupt during this period. The epidemic has only accelerated the pace of bankruptcy.

Many century-old companies have experienced natural disasters, man-made attacks, and financial crises, but they still remain standing, which explains why.

So what’s the key? A company's ability to resist risks is mainly reflected in:

1. Is the company opportunity-based or value-based? Many companies focus on chasing trends, finding hot spots, and creating models, but ignore understanding user needs, polishing products, and verifying models. Can such a company have a solid foundation?

2. Is the core competitiveness established and maintained? Many people's approach to running a business is too simple and crude. They take the business when it comes, find ways to deal with the delivery, and then receive the money and end it. I have never thought about how to survive in this society for a long time. For example, manufacturing factories don’t even have the concepts of quality, delivery, and cost. In the past, making money relied entirely on the dividends from China’s environment. Once the dividends are used up, the ability is used up. Moreover, to maintain core competitiveness, we must rely on a culture of innovation, which stumps many heroes!

3. Is the strategic selection style robust? Century-old companies all have one thing in common: their decisions are sound but not pedantic. Many times, after decision-makers are dazzled by too many victories, they will drift away, leading to poor decision-making. Jack Ma said that Alibaba survives today not because of what it has done right, but because of what its competitors have done wrong.

Of course, this is easier said than done. But the logic is this.

Survival of the fittest, survival of the fittest, this is the law of survival of nature and the law of survival of all major industries. Let me talk about my personal views on this issue.

2020 is destined to be an extraordinary year. In fact, the collapse of many small and micro enterprises did not just start this year. It really started in 2018. Many small and micro enterprises have no business and no money. As a result, many companies have been struggling to survive. After one or two years of resistance, bankruptcies began to appear in the second half of 2019. In early 2020, small and micro enterprises experienced concentrated bankruptcies.

Electric vehicle industry

As of now, more than 20 new companies have closed down in the electric vehicle industry in 2020. Most of the reasons for bankruptcy are due to increased costs and profits. Decrease and competition increase, leading to increased corporate debt, unable to continue operating and forced to close down.

As shown above, this is a newly closed company in the electric vehicle industry, including Guowei Electric Vehicle, Mulan Electric Vehicle, Eagle Electric Vehicle, Jinlin Electric Vehicle, and Aike Electric vehicles, Wusheng electric vehicles and other small and micro enterprises.

Only two months have passed in 2020, but it is known that 20 companies in the electric vehicle industry have closed down. How many unemployed people will there be here? If the collapse of other industries is added, many industries will be rebaptized in 2020.

Nowadays, the competitiveness of all major industries is very high, and it is completely a legal system of survival of the fittest and survival of the fittest.

For example, a company may be very profitable this year, but next year it will suffer losses or even go bankrupt. The reason is that if another company surpasses this company, the market share will be occupied by another company. Naturally, companies that stand still will be eliminated.

There is another kind of legal system for the survival of enterprises, which is to make money and strength. Only enterprises with funds and strength can survive to the end. Only enterprises that survive to the end can is the biggest winner.

This is true in any industry and any market. Similar to the same person, the same person has hands, feet, and brains. Some people can make money and live a life of wealth and freedom, while some people can’t even survive. is a problem. The same people have different endings. Some people adapt to the market and find ways to make money. But under the conditions of success and making money, this person must step down many people. Only he can stand on the top of the mountain, and everyone else will be eliminated by him.

The same is true for enterprises. As long as you continue to update and constantly step down your competitors, only in this way can you continue to operate, and the money in the market will be made for you. If you are eliminated by other enterprises, It will definitely go bankrupt slowly.

The above are my personal views on facing the first batch of corporate failures in 2020. We must understand the survival law of "survival of the fittest and survival of the fittest". Whether you are a person or a business, you must abide by this law. Only when you are strong and you eliminate your competitors, you will be the biggest winner.

The impact of COVID-19 on China’s economy is huge, especially on entrepreneurial companies. However, this impact must be short-term and will not change China's overall economic development trend. Therefore, when the first batch of companies are going bankrupt, I think the main factor is not the sudden outbreak of the epidemic. The fundamental reason is that the company's ability to resist risks is relatively weak.

Of course, there are not a few such companies in China, especially many start-up companies. They are also the indispensable backbone of China's economic development. Therefore, even if the main reason for the collapse of these enterprises is still the enterprises themselves, the state and society should give more care and help.

Affected by the pneumonia epidemic, companies have been affected to varying degrees. In particular, the catering, tourism, department store and other industries that are closely related to ordinary people have suffered an unprecedented blow, with the industry's damage level approaching 100%.

Due to the prevention and control requirements of the pneumonia epidemic, all enterprises in all walks of life have closed their doors.

Consumption-driven industries such as catering, department stores, and tourism are facing the dilemma of no customer flow, and they also have to bear the pressure of expenditures such as rent, loans, and human resources. Enterprises in the industry are generally dormant and struggling to survive. Some companies have encountered cash flow risks and have gone bankrupt. Phenomenon, industry employees have no work to do and people are unemployed.

In order to promote the resumption of work and production and help enterprises alleviate their difficulties, three consecutive targeted reserve requirement ratio cuts have been released to release more than 1 trillion yuan in liquidity, targeted support for corporate financing loans, and bank financial institutions are required not to provide loans to enterprises with operational difficulties. Loans can be withdrawn or terminated. At the same time, in order to ease the operating pressure of enterprises, we have gradually reduced the payment standards for corporate social insurance premiums, implemented tax reduction and exemption policies, etc., and taken multiple measures to support enterprise development, stabilize employment, and stabilize expectations.

The support of a series of national policies is to stabilize the economy, stabilize business operations, and stabilize employment. These are closed-loop connections that are interlocking.

Summary: After the outbreak of the pneumonia epidemic, the state helped enterprises overcome difficulties through credit and tax policies, promoted the gradual recovery of the economy, and business operations are continuing to improve.

For the country, business closures are as normal as human metabolism, but an epidemic outbreak is an abnormal metabolism and is a natural disaster. When floods come, there will inevitably be various losses. The same goes for the epidemic. Business closures are only one of the consequences of the epidemic.

So what kind of companies are prone to bankruptcy? Just like the old, weak, sick and disabled are the most unable to withstand the epidemic, unhealthy companies are prone to bankruptcy, that is, in terms of internal control, funds, products, etc. Companies with many problems are prone to collapse, and companies with excessive leverage are most likely to fail. Healthy companies in all aspects are less likely to go bankrupt. The so-called strong will always be strong!

Every disaster will cause more or less problems in various aspects. What we need to do is to always evaluate whether ourselves and our companies are healthy and whether we can withstand the test of sudden black swan events.

Of course, every disaster will eventually be overcome. New life will flourish from the ruins.

Human beings need to respect nature, learn lessons from various disasters, and constantly improve the early warning mechanism. The same goes for enterprises. Only by taking precautions can the risks be limited to a minimum.

The collapse of unhealthy enterprises is not necessarily a bad thing. It is not too late to survive and make amends. As long as you survive, there is hope. The sun always shines after the storm. Use the rare period of self-isolation to thoroughly reflect. I believe you will be able to come up with better solutions. Come on, fellows!

Survival of the fittest, this is market competition. If you can adapt to the market competition environment and survive, you will win. If you cannot adapt to the environment and keep up with the situation, you will inevitably face the dilemma of bankruptcy.

Every business that fails is due to poor management. In the process of operation, many companies are greedy for big money and seek fast speed, resulting in a rapid increase in debt ratio. Once there is any trouble, they will feel unbearable and always complain about changes in the external environment. In fact, if the company operates steadily and has almost no loans, and its expansion is slower, then the company will only develop slightly slower. How can it face a serious debt crisis?

But now many companies are pursuing development speed in the future, taking out a lot of loans, and launching a large number of new projects. They always think they can make a lot of money. As a result, many companies will face debt ratios in the process of expansion. If it rises too fast, if it encounters changes, it may face bankruptcy.

Therefore, the failure of enterprises is mainly due to poor management and has little to do with the current situation.

Facing the epidemic this time, many companies may be temporarily unable to operate and may have a difficult time. For example, the catering industry, movie theaters, tourism industry, hotels, shopping mall retail industry, etc. may all face some difficulties.

But the difficulty is definitely only temporary. As long as we can get through this relatively difficult stage, the future will definitely be better.

At this stage, everyone has been holding back at home for a long time. In the future, when everyone can freely go out on the streets, travel, and eat in restaurants, it can be imagined that after everyone’s enthusiasm for shopping is released, they will definitely It can make many businesses happy and satisfied.

Of course, although some companies have closed down now, some people are temporarily unemployed. But after this epidemic, many new industries will definitely be born, such as online education, express delivery services, medical and other major health industries, as well as the self-media industry, including live streaming, including making videos, writing articles, etc., all of which can be obtained The rapid development and vigorous development of these industries will definitely be able to absorb a lot of employed people.

To sum up, the current business failures are mainly caused by their own poor management. Although some people are unemployed now, this is temporary. Many new industries will rise in the future, and these new industries will also absorb more people into employment.

Under this year’s special environment, industries such as tourism, shopping mall retail, catering, and aviation have been hardest hit, directly leading to a decline in profits and even being unable to withstand the impact of rents, labor costs and other factors. In special times, there are certain ways to deal with it. For example, there are national support policies that provide rent reductions and exemptions for some industries. However, for many small and medium-sized enterprises, they may not be able to get substantial reductions in burdens, such as rent and labor costs. Factors such as this still restrict the development of enterprises and make ends meet. If the shutdown time is further extended, the consequences for such enterprises will be disastrous. For the unemployed, arrangements need to be made. Appropriate support and help can be given to enterprises in different industries. For unemployed people, in addition to providing them with skills improvement assistance, appropriate family subsidies can be given to help them make a smooth transition. Dilemma.

The reason why a crisis is a crisis is that there will be new opportunities after the danger. Often, this is the time when a company’s true management capabilities are tested. If you cannot adapt to reality, I’m sorry, I can only Be eliminated.

Why have a number of companies closed down more than 10 days after the outbreak?

First of all, these companies must be highly indebted. High debt can allow a company to grow quickly when the economy and life normalize. However, a sudden black swan event will make them extremely vulnerable. If the giant falls, the body may still have residual warmth. It’s not that the business model is bad, it’s that the business doesn’t have a risk control mechanism and the ability to deal with risks. Last year, a friend asked me, why is Apple, so profitable, still retaining so much cash reserves?

Faced with the current situation, do you understand how much impact cash flow has on a company? If a company saves a trust fund when it is doing well, and maybe has more cash reserves, then it will not collapse immediately when the epidemic comes. The last company left behind must be a company that has a good grasp of risk control.

Secondly, huge cost expenditures failed to return profits. Services, tourism, catering, and retail are all tertiary industries, which are the industries closest to consumers and the industries that most require face-to-face meetings with customers to close deals.

Now that everyone is at home, consumption has been suppressed. Without consumption, the above industries will have no profits. However, the state stipulates that employees still have to pay wages, as well as rent, property, loans, warehousing and other costs. .

I saw a chat record, saying that the tenant asked the landlord to reduce the rent because there was no income due to the epidemic. The landlord said, I also pay my mortgage every month, and my mortgage is not exempted by the bank. I have to pay off my credit card every month.

Therefore, if there is no income, costs will still be incurred. If there is not enough cash to tide over the difficulties, the only option is to go bankrupt.

So where will the unemployed go?

The crisis has eliminated fragile companies, but there must be a group of high-quality companies that can survive. After the epidemic is over, they will choose high-quality companies to work in again.

I believe that during the epidemic, many friends must also be learning various knowledge at home and working hard to adapt to the new working environment in the future. For example, I am learning the skills and techniques to create Douyin.

Moreover, I believe that some people must choose to start a business. They may invest in live streaming to bring goods, they may invest in building an excellent self-media, and so on.

Just like SARS in 2002-03, Taobao was born and e-commerce developed rapidly, so this new coronavirus epidemic will definitely make our physical enterprises think carefully about how to integrate with the Internet. combine.

For the country, it would be great if it could moderately reduce or reduce some taxes and fees for small and medium-sized enterprises.

It’s not that they didn’t work hard, but it was really unexpected. Small and medium-sized enterprises are the backbone of the national economy. Appropriate reduction and exemption policies will allow them to absorb more unemployed people and make the economy more dynamic. I hope this day will come soon and the epidemic will end soon.

Come on Wuhan, come on China!