Wen / Ba Jiu Ling
The epidemic is like a "magnifying glass", which magnifies the financial statements of every company.
Recently, Tsinghua and Peking University jointly investigated the current situation of 995 small and medium-sized enterprises, one of which is - if the construction does not start, how long can the enterprises maintain?
According to the data, 34% of enterprises can only maintain 1 month, 17.91% of enterprises can maintain 3 months, and only 9.96% of enterprises can maintain more than 6 months.
In the "expected impact of the epidemic on the company's revenue in 2020", 29.58% of enterprises estimate that the epidemic will cause a decline in operating income by more than 50% in 2020, and only 4% of enterprises believe that the decline is less than 10%.
The minibus found that almost all the data pointed to three words – cash flow, cash flow, cash flow.
Recently, the minibus has seen some views of the circle of friends on the screen, and most of them are also like this. For example, Zhu Xiaohu sent a circle of friends to say: this year is more severe than SARS, for many start-up companies is a life and death pass, must strictly control the cost, dead card cash, at least to maintain the assumption that there is no income in the case of 6 months of cash, it is best to have 12 months, according to this to calculate the cost.
Wu Shichun, founding partner of Meihua Venture Capital, believes that when the income suddenly drops to 0, the number of cash available months on the company's account is more than 18 months, which is very safe; more than 12 months is relatively safe; less than 6 months is on the verge of danger; it can only be maintained for 3 months, then it is in crisis.
According to the above view, the maintenance of corporate cash flow for 6 months is only a passing line, and according to the above survey results, 90% of SMEs are unqualified.
Today, the epidemic has lasted for almost a month, and although some companies are resuming work, most companies still have to rely on remote work. Especially for industries such as catering, education, tourism, and entertainment that need to be gathered and carried out offline, it is even worse.
The more blood is shed, the slimmer the chances of survival. Minibuses have found that companies have recently taken action.
For example, "blood transfusions" through financing. Jia Guolong, the chairman of Xibei, who is publicly crying poverty, has now received a credit of 430 million yuan from the Beijing branch of Shanghai Pudong Development Bank, and even a bunch of investment institutions are lined up to invest.
Another example is to "stop bleeding" by reducing labor costs. On February 10, the first day of the resumption of work, New Wave Media announced a 500-person reduction and a collective salary reduction of 20% for executives.
The epidemic is like the ultimate test of corporate cash flow. So, how can companies "save their lives"? If you want to develop for a long time, how to reserve cash flow? Let's take a look at the analysis of the big head and the case of the enterprise.
How much cash flow should the business reserve? On the one hand, look at the industry in which the company is located, and on the other hand, look at the company's industry status.
From the perspective of the industry, the cash flow reserves of catering and engineering companies are often relatively small, while the cash flow of liquor and pharmaceutical companies is generally more abundant.
From the perspective of industry status, having a dominant position within the industry, the reserve of cash flow will be relatively small. For example, Gree Electric Appliances has a strong position in the industry, with many accounts payable and fewer accounts receivable.
In order to maintain cash flow, I think there are several things that companies can do:
1. Control spending. In the cold winter, it is especially necessary to control marketing expenses, and do not blindly expand and blindly borrow debt;
2. Manage accounts receivable. It is necessary to pay attention to the number of accounts receivable not to exceed the speed of income, but also to pay attention to the quality of accounts receivable, and control bad debts and bad debts within a certain range.
3. Master the rhythm of financing. Don't wait for money to be used to raise money, but prepare enough food and grass before the cold winter comes.
4. Improve competitive advantage within the industry.
At present, many views in the market believe that the epidemic has suppressed people's short-term demand, and has no major impact in the long run, so it has little impact on enterprises. In fact, this view is to consider the problem from the perspective of the industry, rather than from the perspective of the enterprise.
Short-term operational difficulties may directly lead to the elimination of some enterprises, and the occurrence of large-scale similar events may trigger systemic risks.
Therefore, at this time, the state should actively encourage enterprises to resume work and production, and financial policies should be inclined to small and micro enterprises and private enterprises, because their cash flow pressure is the greatest.
Private enterprises should also actively help themselves, the possibility of open source in the short term is unlikely, throttling is very critical, the money that should not be spent is not spent, and the delay in the payment of employee wages and bonuses are all measures to face difficulties.
How can companies weather this financial crisis? I specifically consulted the financial expert Yan Jing, combined with my many years of experience in corporate consulting, and summed up 6 life-saving methods.
1
Seek shareholder financing
After the shareholders come in with the money, there are two ways to deal with it. One is additional investment by shareholders, which will affect the ownership structure, and many companies may not easily do so.
The other is to treat this part of the funds as a loan from shareholders, give shareholders a high interest rate, and then return the capital and interest to shareholders after the crisis. Even if the company fails, the repayment priority of the shareholders' borrowings is above the equity, which will also protect the interests of the shareholders.
2
Sell inventory as soon as possible
Inventory is sold at a discount in exchange for cash, which may require sacrificing a little profit.
3
Advance payments to customers
If you are a chain hot pot restaurant, you can sell stored value cards to customers, store 2,000 yuan at a time, and later eat hot pot for 4% discount (significantly higher than the weekday discount).
Some profits will be lost in the future, but some cash flow can be saved in the short term by receiving some cash flow through advance receipts.
4
Receive incoming receipts in advance
The problem with receivables is: other people's homes have no rice to cook, what to do? Three financial instruments are available.
The first is to pledge the loan of accounts receivable, mortgage the right to collect the accounts receivable to the bank, do short-term loan financing, and repay the loan and interest according to the agreed period in the future.
The second type, accounts receivable factoring, transfer the accounts receivable to the bank or factoring company, they will fold a part of the cost of funds according to the risk, and then give you the rest of the funds first. After factoring, the ownership of the receivables is transferred to the bank or factoring company, and they directly recover the money when it is due.
Third, the discount of bills receivable, the use of unmature notes receivable to the bank to raise funds, the bank will be according to the amount of receivables of the notes, after deducting a certain period of discount interest, the balance will be paid to you.
5
Defer payments due
Refers to accounts payable, bank interest, rent, employee wages, social security expenses, etc. within a certain period of time. This piece can pay close attention to some policies of the provinces and cities where they are located.
In addition, if some employees are not in a hurry to use money, they can postpone the payment of wages and pay certain interest, such as 12% per annum, which is equivalent to employees putting their wages in the enterprise to do financial management.
6
Cut discretionary fixed costs
Discretionary fixed costs such as new product development fees, marketing fees, advertising fees, and employee training fees can be appropriately reduced during special periods.
The above 6 methods can all work, but they all come at a cost, either at the expense of profits or with additional capital costs. But it's all about saving lives, saving lives first, and then buying time to cure the disease.
In difficult times, we have been calling on entrepreneurs to try not to lay off employees, not to reduce the basic wages of employees, the big business, for the country and the people, entrepreneurs need to bear social responsibility, but the reality is that a large number of wage expenditures may crush the cash flow of enterprises.
My suggestion is that in the current or period after the epidemic has passed, SMEs should promote the use of "equity incentives" in human resource management, which can not only save current cash expenditures, but also play a role in motivating the future.
Cash flow is the lifeblood of a business, and every business is looking for ways to save money. Weilai Automobile announced that the thirteen salaries of employees can choose to take stocks, which is actually an idea of exchanging the future equity value for current cash expenditures.
At the same time, it is also a good time for enterprises to screen talents, from which core talents with similar values and potential are selected as equity incentive objects or preparatory objects.
In terms of specific operations, we can try to implement the incentive model of restricted equity, first encourage core employees to contribute capital (you can not directly pay money to contribute, but use forward income discounting) to purchase equity, and then unlock in stages according to the service period and performance completion, so that the incentive object can obtain a complete equity.
At the same time, the implementation of low wages, high stock portfolios or medium wages and medium stock combinations in total compensation. For example, the current salary of the incentive recipient is reduced to 80% of the original, and the reduction of 20% can be used to buy equity in the company.
Of course, the choice should be given to the employees.
I believe that the timely introduction and use of equity incentives may help enterprises re-establish organizational relationships, deeply bundle talents that truly provide value to enterprises, and turn crises into opportunities.
The Spring Festival is the golden sales season of the dairy industry, and there will be a peak of sales throughout the year online and offline. For example, on the e-commerce platform, the sales of Mengniu Spring Festival in previous years can basically achieve 900% month-on-month growth.
Therefore, dairy companies will make full preparations in terms of milk sources, raw materials, production capacity, etc., invest a lot in advertising, marketing, etc., and take the Spring Festival sales season as a must-win battle.
The sudden outbreak of the epidemic has inevitably brought about an inevitable impact, especially in terms of logistics, due to the strict traffic management measures adopted in many places, the transportation time of our raw materials and products has become longer, affecting production and sales, and increasing costs.
In the face of the epidemic, in addition to passive response, we are also actively carrying out self-help.
In the upstream field, the pastures that have signed long-term fresh milk purchase and sale contracts with Mengniu are given five supports: "guaranteed acquisition", "guaranteed supply", "guaranteed transportation capacity", "guaranteed capital" and "guaranteed operation", which is not only to lay out the future, but also to ensure a stable upstream supply chain relationship.
In the field of production, we actively purchase protective equipment from all over the world, in addition to donating to the frontline of the fight against the epidemic, but also meet the basic needs of various factories; in the field of brand promotion and sales, we have improved the new channels and new services such as intelligent unmanned retail and contactless door-to-door delivery such as e-commerce and "tianxian matching".
In addition, it also donated a total of 740 million yuan in cash and dairy products to the frontline of the fight against the epidemic to make the contribution of a dairy company.
Mengniu can cope with the impact of the epidemic, thanks to the fact that it has maintained a sufficient level of cash flow over the years, even if it has done several relatively large mergers and acquisitions at home and abroad last year, the cash flow is still very abundant and can withstand sudden risks.
Another key is that in the past 20 years, Mengniu has formed a high-level logistics system covering the whole country, which has played a great role in the transportation of raw materials, products and donated goods.
Finally, I believe that the blow of the epidemic to the Chinese economy is temporary and will not affect the trend of China's consumption upgrading. According to past experience, after the end of the larger crisis event, consumption will usher in a wave of rebound.
The author of this article | Li Mengqing | When the value is edited | Li Mengqing
Responsible Editor | He Mengfei | Editor-in-Chief | Zheng Yuanmei