Can you believe that half of the bosses who are now doing live broadcast e-commerce can't even read their company's financial statements, and they can't even understand how much net profit the company has.
I say this without the slightest disparagement, but by stating a fact. I am in Hangzhou, managing a live broadcast e-commerce venture capital company, mainly engaged in live broadcast e-commerce **chain finance and equity investment business. In the past year or so, I have done my due diligence on more than 100 live broadcast e-commerce companies, and also invested in more than a dozen of them, what impressed me the most is not how pitted this industry is, and there are so many bosses in this industry who don't even have basic financial knowledge, and even many bosses don't know how to read financial statements.
I am in Hangzhou, I am in the private equity industry, and I am also an entrepreneur, in the past ten years, I have also founded a number of companies, some of them make money and some of them lose, but no matter whether the company loses money, at least I have a number in my heart, but some of these e-commerce bosses I have done my due diligence do not know whether their company is losing money or making money.
Let me share with you the following cases.
The first case is a project to do two luxury. This company is located in Hangzhou Jiubao. The boss is not from an e-commerce background, and told me that he used to be in finance, and later learned that he should be doing cash loans. The owner is young, it seems to be 93 years old.
This boss was quite bold, and he also made a lot of money with cash loans, and later after the cash loans were suppressed, his company also ran into trouble. So he decided to transform into the live broadcast e-commerce industry. It should have been introduced by a friend, and he decided to invest in the category of second luxury.
According to him, he inspected it for more than half a year and felt that the industry was very suitable, so he invested seven million to do this project.
In addition to his own 7 million, he also borrowed 8 million to make pallets, with a total investment of 15 million.
For a start-up second-luxury e-commerce, this amount of funds is sufficient, so the boss is also full of ambition. opened two offline stores, renovated three live broadcast rooms, rented thousands of square meters of office space, and hired more than 60 employees.
When he came to me for financing, the company's liquidity had dried up, and he couldn't pay his salary for the month. I asked him why he had come to this point to think about financing. He actually told me that he thought there were more than one million in the account, and he was not in a hurry, but he didn't expect that there was actually no money.
At that time, I was very speechless, as a company owner, I don't know how much money I have in the company's bank account, isn't this something to pay attention to every day?
I asked them how much money the company had lost and why.
He told me that he couldn't figure it out either, because the company's financial books showed that the company had always been profitable, and it couldn't be paid just by doing it.
I asked them how much the company's gross profit was and how much its net profit was.
He said that the gross profit is about 20-30%, and the net profit has not been carefully calculated, but it is estimated that it is also 15%.
After listening to it, I actually decided that I would not invest in his company. Such a confused boss can only make money by lending usury, and he can't do business seriously.
He doesn't even know how many people there are in the company, the detailed monthly expense payment, employee salary expenses, and specific inventory data, depreciation and amortization, and such things are really hell that such an e-commerce company can still make money.
I politely rejected his financing needs, and gave him advice to lay off employees as soon as possible, clear inventory, reduce company expenses, sort out the company's accounts, and then seek expansion, otherwise it would be extremely risky to run blindfolded.
He didn't listen to my advice, I don't know, it seems that a live broadcast room is still being retained, and there is no other news.
The second case is a little brother who makes children's clothing, also in Jiubao, Hangzhou. When he found me, he was doing well and wanted some money to expand his sales.
Because I don't know much about the e-commerce industry, the customer's risk control due diligence mainly relies on the risk control department, and our risk control team is mainly from e-commerce. However, as the main person in charge of the company, I have the right to veto the voting committee, and I have to make interviews with all customers.
I asked this guy how much their net profit was, how much the return rate was, and what was done with the inventory.
He said their net profit is 15 percent, the return rate after shipment is 15-20 percent, and the inventory is mainly thrown off as a discount benefit.
His description is reasonable and basically consistent with the results of our risk control department's due diligence, so we also invested in his project.
After actually investing, for a while, I felt good, but then I found out that there was a huge risk.
First of all, taxation is not good, the taxation of such small companies is too arbitrary, if it was placed in the past, when the tax inspection was not strict, it would be fine, but now, this is a huge risk.
On the other hand, the return rate and inventory clearance are also different from the original expectations. In the peak season and some single products, the return rate is indeed not high, but this is not stable, when encountering some products or encountering unreliable anchors, the return rate will be more than ten points higher, not only that, but the processing of inventory is far less than expected.
It's unrealistic to get rid of it at cost, and I've found that a lot of inventory can only be disposed of at a garbage price of less than a discount.
If the true value of the inventory is not estimated, the merchant is likely to be deceived by the false profit on the books, mistakenly believing that the business has been in a profitable state, resulting in a larger and larger funding gap and higher and higher debts.
At the beginning of this year, we also withdrew from the project, and we would rather not make this money for projects that we could not grasp.
The third case is also made of clothing. This boss is from an operation background, has a lot of feelings, and is also very good at sales. He used to be the director of operations of a children's clothing cat store, and the company's annual sales were five or six billion, and all the sales channels were in charge of the boss I mentioned.
Later, because of some entanglements of interests, the boss decided to come out and start his own business. In fact, the original boss of the company did not fulfill the previous promise of profit distribution.
This friend of mine is a very righteous and committed person, and he is very good to the people under him, so he and his brothers are willing to start a business with him.
The initial stage of the business was quite smooth, and in my opinion, the only problem was that the boss was too human. Although I am from Northeast China, I learned to do business with the boss in Zhejiang in my twenties. I found that the bosses in Zhejiang who do well in business are basically very clear about business and human favors, and will not be confused.
But this friend of mine didn't tell the difference. Obviously, his company has a lot of employees who are not suitable, and the salary is very high, simply because the boss can't save face and lays off employees.
When the company is making money, these are not big problems, but once the company is not doing well, then the problem will be magnified.
There was a period of time last year when the company lost money due to the epidemic. All of a sudden, the problem broke out, and the high expenses made the company without revenue stretched all of a sudden.
And because of the model of cooking in a big pot all the time, the dissatisfaction of employees exploded, and finally the company was on the verge of bankruptcy.
This boss is a typical good person who does wrong things, and doing business is not doing charity. The company is a team of interests, and the first priority of being a boss is to calculate the accounts and share the money, and if you can't do this, you will collapse sooner or later.
Later, I suggested that the boss lay off employees and reduce salaries, retain the company's core competitiveness, maintain the company at the lowest cost, ensure that the balance of income and expenditure, and then seek financing to expand after surviving the difficulties, otherwise the capital will not enter to support you.
After all, this is a private enterprise, not a state-owned enterprise, and the purpose of a private enterprise is to make money and survive, not simply to solve employment for the society.
There are dozens of cases like the above, I won't introduce them one by one, in short, whether it is a live broadcast e-commerce or any company, as the first priority of the company boss is to learn to read and settle accounts, if you can't understand this, don't start a business, harm others and yourself. In the end, it's all chicken feathers, and no one says hello.
I am Gao Hongye, a live broadcast venture capitalist, and I joined the circle of friends of Hangwan Club, making more friends and stepping on fewer pits.