What do you think about the first batch of corporate closures?

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 make money. After a year or two of resistance, they began to go bankrupt in the second half of 2019. In early 2020, small and micro businesses 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 already 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, and 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.

Like it after reading it. I am rich. Thank you for reading and paying attention.

Learning from history can inform the future.

As the title says, 2020 is an extraordinary year. To correctly understand the collapse of the first batch of companies, we might as well look back at what happened in the thrilling year of 2003.

A review of the economic impact of the 2003 SARS epidemic

The SARS epidemic began in December 2002 and spread in the first quarter of 2003. The epidemic reached its peak in the second quarter and reached its peak in May. The peak is around March, and the epidemic is basically over after the third quarter.

The SARS epidemic had the most obvious impact on the service industry and lasted the longest.

It had a significant impact on the economic trend in the second quarter. In the second quarter of 2003, when the SARS epidemic was the most severe, GDP grew by 9.1% year-on-year, down 2 percentage points from the first quarter. We can see that even if GDP falls by 2 percentage points, the growth rate is much higher than it is now. At this time of economic adjustment, we can imagine that the impact this time will be even more rapid.

Judging from the economic performance in the last few quarters of 2003, after the epidemic eased, the primary and secondary industries rebounded quickly, but the recovery of the growth rate of the service industry was still relatively slow. From the perspective of economic growth throughout the year, the SARS epidemic did not change the upward trend of China's economy. GDP increased by 10% year-on-year, an increase of 0.9 percentage points from the previous year. The SARS epidemic in 2003 had a short-term impact on the economy and economic structure, and did not affect the overall trend of economic growth and economic structural adjustment in subsequent years.

Analysis and Judgment of Economic Trends after the Current Epidemic

After understanding the economic performance of the previous round and combined with the background of this round of economic adjustment, we can draw the following opinions relatively clearly :

The epidemic has had a fatal impact on the service industry, tourism industry, shopping mall retail industry, catering industry, hotel and other industries. The Spring Festival period was originally the prime time for the above-mentioned industries, but due to this The impact of the epidemic not only made no money, but also compensated for rent costs, labor costs, etc. Taking the film industry as an example, the box office for the seven days of the Spring Festival in 2019 reached nearly 6 billion yuan, but the box office for the Spring Festival in 2020 Still less than 2 million yuan. Many streaking companies have begun to lay off employees, or even went bankrupt.

What do you think?

If the epidemic lasted for three months or even half a year, and then companies began to go bankrupt, I would not be surprised at all. However, a company only closed for less than one month (from January 23rd to January 23rd). It has only been about half a month since the city started to lay off employees or go bankrupt. So, in fact, whether it is due to the epidemic or not, such companies basically cannot go very far?

Why? Because this company has no ability to resist risks at all, it can even be said that the founder or operator of this company has never had a sense of crisis. Running a business itself is a high-risk thing. Being prepared for danger in times of peace is a major event that every successful entrepreneur should consider. However, from the current point of view, the founders of King of Karaoke and Band of Brothers Education have never considered this aspect. The problem is that if the situation is good and the development of enterprises goes smoothly, these enterprises may achieve considerable development, but if there is any trouble, these enterprises will be in catastrophe.

Summary

Any enterprise must consider failure before winning. Only in this way can it gain a foothold in this fiercely competitive market. If an enterprise will always expand blindly without considering Risk factors, if you don’t keep enough precautions, you will collapse one day.

I am also an entrepreneur myself. It has been more than 6 years since my company was established, and I have experienced ups and downs. In the past two years, I have been studying the rules of business operation in depth and sharing some of my experiences.

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 quite 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, then find ways to handle 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 has 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.

If you think it makes sense, please like it and support it. You are also welcome to have in-depth discussions in the comment area.

At this special moment, the resumption of work of enterprises has been delayed. Including the Spring Festival holiday, many companies have not started work for a month. The problem is not big, but for small and medium-sized enterprises, one month is still a long time. Small and medium-sized enterprises are originally at the end of the supply chain. They are under the pressure of account periods from upstream enterprises, and there is great pressure on accounts receivable and upstream. The business is several months in arrears.

Special moments are indeed a test of the cash flow of enterprises, and it is also a time of survival of the fittest. If a company's capital flow cannot survive for a month, even in the current epidemic, such a company may not be far from bankruptcy.

Therefore, most of the first batch of companies that have closed down now have problems with the companies themselves. The companies closed down after a month without production and operation. This shows that there is a problem with the business strategy and the strength of the company. In this way Enterprises will definitely be eliminated in the market, sooner or later.

It has only been less than 20 days since the outbreak of the epidemic. A company has closed down in 20 days. What problem does that mean? Is there a problem with the operation of the company itself? Does it mean that even if Without this epidemic, companies may not survive for a few months, so don’t put all the blame on the current epidemic situation, but also look for problems from the companies themselves. Why are many companies still able to survive under the current circumstances? Still a healthy operation.

Brother Hu’s point of view: Be prepared for danger in times of peace, cash flow is the lifeline, learn from Shi Yuzhu.

1. Our cash flow is about to run out

There was a saying on the Internet: The company only has 2 months of cash flow. Some people may curl their lips and not believe it, but Brother Hu believes it.

Because Brother Hu’s company currently has funds in its account that can only last for two months. Rent and staff wages are fixed. At the end of last year, the property management company informed that the rent would increase in 2020, from 100,000 yuan/year to 120,000 yuan/year. At the same time, since the consulting industry is a highly intelligent industry, personnel salary is the largest expenditure, and every month's salary is spent like water.

2. Our response

Of course, we belong to a typical asset-light industry. Although human salary is a big expense, it is always linked to the project. As long as there is a project, the money will eventually come back.

The epidemic sweeping across the country has had a profound impact on labor-intensive enterprises such as manufacturing, and starting operations is a big problem; of course, the consulting industry is also affected, but I believe that, It has little impact on us;

On the one hand, even if face-to-face communication is inconvenient, as long as the preliminary interviews and communication are completed, the project team members can complete the plan writing at their respective homes , just contact us online if you have anything to do; on the other hand, with the collection of new project funds and the introduction of new investors, all problems will be solved.

3. Be prepared for danger in times of peace

Of course, on the one hand, it is the particularity of the industry, and on the other hand, fortunately, there was a layout before the year - investors came in. This epidemic has taught us that if there is any unforeseen situation, we must have backup plans, especially for companies that are strapped for funds.

In the past few years, some listed companies expanded aggressively without paying attention to the country's fiscal and monetary policies. As a result, they are now living in misery - because they used to borrow money from banks. The right hand's trick has long failed to work. Without sufficient cash flow, the company is on the verge of collapse at any time. Welcome to "follow" Brother Hu's financial outlook and get useful information on business, investment, and entrepreneurship!

This is the "law of survival of nature", the weak eat the strong, and the fittest survive.

There is no way!

You have to know that every crisis will cause a group of companies to close down, but at the same time, every crisis will promote the birth of a wave of new companies and opportunities.

Just like during the SARS outbreak in 2003, many companies experienced money shortages and bankruptcies.

But at the same time, we have also seen the rise of companies like JD.com and Alibaba.

Therefore, everything is composed of two factors. On the one hand, many companies that have been hit hard by the epidemic have closed down. On the other hand, there must be people inspired by the epidemic. The rise of new industries that were born.

It can only be said that for a company, how to combat risks may be more important than how to make profits.

Just like Jack Ma once said, a company will make money, but it may not last;

But those long-lasting companies that have "lived" for more than ten years, or even decades , you will definitely make money;

The same is true now!

If you blindly expand, blindly go into debt, blindly have no cash flow reserves, and blindly do not know how to change your operating ideas, then this risk will be the "doomsday" for many companies.

However, if you understand the online and offline model, you know how to maintain strong cash flow, and you know how to reduce your debt!

Then maybe after this epidemic passes, you will "survive from the desperate situation". You may eliminate many opponents in your field, obtain more resources, and make better profits.

This is the market and the law of survival of nature!

In 1997, Wei Jie, an economist in Beijing, once made a prediction: This is a stage of great waves washing away the sand, which is very painful. I estimate that in another 10 years, one out of the 200 private enterprises will remain. It is not easy to come down, the downfall of downfall, the growth of growth. (From "Southern Weekend" February 21, 1997) Now it seems that his prediction may be right. An enterprise will encounter various problems in the process of production and operation. Even without the emergency of this epidemic, failure is still the fate of most enterprises! Just as Mr. Wu Xiaobo said in the great defeat: The failure of Chinese entrepreneurs has a unique professional personality defect, a lack of moral sense and humanistic care, a lack of respect for laws and order, and a lack of systematic professionalism. Spirit. It is precisely because of this almost innate and characteristic professional personality defect that generations of start-up entrepreneurs often fall into a surprisingly similar cycle of fate.

Therefore, the failure of an enterprise is not only a failure of the system, but also has some external reasons, as well as some deep-seated human factors.

Facing the first batch of corporate failures, what do we think? First of all, I think it is a bit early to say that the first batch of companies have collapsed. I can only say that some companies have discovered a survival crisis and are beginning to save themselves, and have not collapsed.

During the Spring Festival, the new coronavirus pneumonia epidemic occurred in Wuhan. During the Spring Festival, coupled with our traditional reunion festival, if not controlled, a more serious situation may occur, so various places have taken measures Some closed epidemic prevention measures.

These epidemic prevention measures will undoubtedly have a serious impact on some industries, such as the transportation and tourism industry, the hotel and catering industry, the theater and entertainment industry, etc. These industries are likely to have some more difficult companies. After the Spring Festival, It is also possible that some companies will go bankrupt as a result.

We can regard this as the first batch, but it is not large in terms of quantity. Except for some places in Hubei Province, other provinces and cities should be just isolated phenomena and will not have a major impact on the entire industry. influence.

However, as companies that have been severely affected, they must now consider how to tide over the difficulties. A friend of mine is engaged in the catering industry. He is also very confused now. The company will definitely be affected in the short term. But it is not yet bankrupt, and he is considering how to transform and save himself.

According to what he communicated with me, I think his idea is also advisable. He believes that it is not advisable to rely on layoffs and can only find ways to increase income.

I think his ideas are very valuable. First, he should not wait and rely on himself when facing difficulties. Second, he should fully consider the interests of the company and employees. Third, he should take the lead in overcoming difficulties himself.

Therefore, I think that as long as we have this sense of worry, dare to face up to difficulties, and actively find ways to overcome difficulties, companies should not close down, and they can completely survive the difficult period through self-transformation.

This time it is indeed not easy for everyone, especially the commercial service category, because the overall operating cost of the commercial service category is relatively high, but the gross profit is relatively low.

In recent years, physical business service companies or self-employed businesses have been impacted by network services, and have been already struggling due to increased costs.

The house leaked and it rained all night, and the boat broke and it hit the wind.

Can a company withstand the storm? Mainly look at three points: Either have sufficient cash flow

Cash flow is the most important condition to support the operation of a company. This is why when we invest in listed companies, we must choose those listed companies with relatively stable and sufficient cash flow. reasons for individual stocks. Either the operating costs are relatively low

Nowadays, traditional industries basically have relatively high operating costs, relatively high competition, and relatively low profitability. This is why we are reminded to choose some asset-light projects for investment when investing. Strong shareholders

Any company has shareholders. In many cases, as long as the company has the potential for development, shareholders will not give up. This difficulty will be easier for local enterprises and state-owned enterprises with relatively strong shareholder strength to overcome.

What is really difficult are those small, medium and micro enterprises and private individuals. In the future, only some competitive enterprises among these enterprises are expected to survive the difficulties. Some enterprises that are already in danger may be affected by this round of turmoil. It gradually exited the market.

Generally speaking, after this period of time, small, medium and micro enterprises will usher in new changes, especially some commercial service enterprises. Eliminating some companies with high operating costs and poor profitability is a general trend. Even if this does not happen, it will happen in the future.

We should pay more attention to re-employment. After all, when companies close down, people will lose their jobs.