Corresponding to the previous section, the long board is used for offense, and the short board is used for defense. Treating the long board is the bright spot of manufacturing, and treating the short board is a requirement that there is no fatal weakness.
No matter how strong an organization is, since there are strengths, there must be weaknesses. Even if you're strong enough to have no weaknesses, weaknesses appear when you start to attack. It doesn't matter if you have a weakness, but it is very relevant if you are weak to the point of being fatal, and this is what this section is about: you can't tolerate a fatal weakness, and you must control the risk.
Shopping malls are like battlefields, give an example of a battlefield and a shopping mall respectively. No matter how strong you are, your weakness is not fatal.
l At the end of the Eastern Han Dynasty, Yuan Shao and Cao Cao fought a decisive battle in Guandu, with a strength of 10:1, and Cao Cao was absolutely inferior. Cao Cao originally resisted Yuan.
Shao's best location was the Yellow River, but if they each held on both sides of the Yellow River, Cao Cao would be undefeated at best, and if he could not cross the Yellow River, he would not be able to fight for victory.
So Cao Cao took the initiative to retreat to Guandu, the ferry of a tributary of the Yellow River, after beheading the famous Hebei general Yan Liangwen Chou in the Yellow River. Guandu is only 87 kilometers away from Xuchang, his rear, not only farther away from Yuan Shao's grain production area, but also Yuan Shao's grain and grass must cross the Yellow River, Yuan Shao's rear is difficult to maintain a long distance across the river transport, so Yuan Shao had to establish a material transfer station in Wuchao, south of the Yellow River. But the south of the Yellow River is an area where Cao Cao maneuvered, and once the grain of Wuchao was burned, it would be considered Yuan.
Shao has grain in Hebei, and he can't transport it for a while, and the soldiers will mutiniate after three days of starvation, and the black nest is the Achilles' heel created by Cao Cao for Yuan Shao.
For this fatal weakness, Yuan Shao neither sent a powerful general to defend it with heavy troops, nor did he store grain in several places as a backup, knowing that Cao Cao did not send the main force to support the Wuchao after he attacked the Wuchao, but sent Zhang He to take the main force to fight Cao Cao's camp, and he was still sitting in the Chinese military tent. As a result, the black nest was also burned, and the camp was not defeated, and was successfully hit by Cao Cao.
For business operations, if one of the customers contributes more than 20% of the revenue, it constitutes a huge business risk point for the enterprise. 20% of revenue, equipment depreciation that can be apportioned, and wages for managing labor can support the profitability of other product lines. Once a large customer is lost, 20% of the fixed costs cannot be amortized, and it is difficult for the company to make money. Let's take an example of a shopping mall.
l Apple accounts for 28% of OFILM's total sales, which is the biggest weakness of OFILM and other Apple industry chain companies. 2021
In March, Apple unilaterally announced that it would kick 34 Chinese companies including OFILM out of the first chain, and such a sudden decision caught OFILM off guard. On August 30, OFILM released its semi-annual report, with the company's revenue of 117 in the first half of the year4.2 billion, a year-on-year decrease of 4996%, went half, net profit 03.4 billion yuan, a year-on-year decrease of 9325%, which is a fraction of the original. The risk of large customers made OFILM almost die.
The top is the weakness that almost died, and the bottom is the weakness that is completely dead:
l Fan Bingbing was fined 8 for tax evasion8.4 billion, which has since disappeared from the entertainment industry.
Deng Lun was fined 10.6 billion, which has since disappeared from the entertainment industry.
Zheng Shuang was fined 2 for tax evasion9.9 billion, which has since disappeared from the entertainment industry.
Wei Ya was fined 134.1 billion yuan, which has disappeared since then.
Compliance is the fatal weakness of most small companies. At the beginning, the power of the enterprise is small, and it doesn't matter if the boss is the cashier himself, but it can't be like this forever, otherwise it will never be big. Standardized operation is conducive to the management of enterprises with fewer mistakes, and is the only way for enterprises to become stronger, just like self-disciplined people are healthier. Buddhism has precepts, Judaism has precepts, and businesses and people should have their own precepts. Standardized operation is a precept that business operators must abide by.
If an enterprise wants to develop, it cannot focus on attacking, but also leave some strength to defend, and the balance of offense and defense is the right way.
Analysis 13] Business management is building blocks.
The philosophy of management is first and foremost a philosophy of survival, not a philosophy of competition. Those who can survive are not fast, but have a solid foundation. If you can survive, you will have the confidence to operate sustainably and never get out, and you can slow down, and only by slowing down can you do a good job in investigation and research, reserve resources, make appropriate layouts, and lay groundwork all the way to achieve strategic encirclement. A tactically fast company, no matter how fast, is no faster than a tactically slow but strategically fast company. The flowing water does not compete for the first, but the competition is endless.
Shopping malls are like battlefields, and shopping malls can learn from two principles of "The Art of War":
1. Sun Tzu is not talking about defeating the strong with the weak, but about defeating the weak with the strong. If you are sure, you should make a move, and don't use your fate to gamble on small probabilities, that is, don't defeat the strong with the weak. Enterprises should also do things within their own capabilities, and slowly increase their strength, and slowly they can do great things. If you develop the character of defeating the strong with the weak, even if you succeed for a while, it is impossible to defeat the strong with the weak every time, and sooner or later you will be unlucky.
2. Sun Tzu is not teaching you to win, but to make you undefeated, others are strong, you just need to enhance your strength, and when the other party has problems, you will naturally win.
What kind of small business can survive? If you have a cost advantage, or a technical advantage, or a channel advantage in a certain market segment, you can survive, in short, you have to have an advantage. As long as you don't make mistakes, there's always a chance. People who really want to start a business don't have to think too much, no matter how good the general environment is, the success rate of small businesses is only in single digits. Do your own thing, live or die, leave it to fate. Starting a business is a personal choice, not a noble cause, don't put the whole family in, don't mortgage the house, if you can't grasp the development of the next few years, don't sign a bet.
What I agree with is a step-by-step approach, which is in line with the law of quantitative change to qualitative change, and it works from theory to practice. For example, if we build a house with building blocks, the house must be flat and stable from the foundation, and then it can be built up, if the foundation is crooked, then the more crooked, and then the height will collapse. Another example is yoga, which starts with adjusting the breath and then operating the limbs in a basic alignment position each time. If you don't warm up enough in front of you, you can easily strain your ligaments and muscles if you directly challenge difficult movements. Doing business, building a house, and doing yoga are all the same thing, and running a business must always lay a good foundation, that is, as the saying goes, "sharpen the knife and not cut the wood", and you can't go beyond your own resources to make a big leap forward. Later in this article, we will emphasize the basic skills many times, and laying a good foundation is a prerequisite for development.
Here are the three building blocks that the children built:
The first one is the fastest, and the lowest is also the lowest, and if you add it any more, it will collapse, and there is no possibility of going up.
The second one is the highest, but it is crumbling, and the higher you go, the more dangerous it becomes, and if you touch it, the building will topple over.
The third one has the most stable foundation and some heights, and if you want to build it again, it can be higher and has the greatest development potential.
When I was in college, my master's supervisor said, "Over the years, those who have studied well are those who have solid basic skills. "I didn't understand at the time, isn't the basic concept understood by everyone? Only now do I understand. If you want to stand at the highest, then you have to use your kung fu at the lowest, and you can stand tall if you stand firm. I like an idiom very much, called "thick accumulation and thin hair", where "thin" means to spray thin, rush out. For example, "righteousness is thin and cloudy". The premise of "thin hair" is "thick accumulation", and thick accumulation is the foundation of building blocks. Business management and life development are like building blocks.
Analysis 14] Business operation should be healthy, and there are indicators for health.
Traditional Chinese medicine says that the human body with a balance of yin and yang is a healthy human body, and in the same way, an enterprise with a balance of offense and defense is a healthy enterprise, and the health of the enterprise has indicators. The business logic of TOB's industrial enterprises is different from that of TOC and IT, even if TOB is different from different industries, health indicators are difficult to generalize, and the following key indicators are for reference only
1. Balance sheet.
l The asset-liability ratio should not be greater than 70% of assets. A healthy business is not created by borrowing a lot of money.
Profit. If you can do something for the rest of your life, it means you're no different from the rest of your peers. More than 70% are considered too risky to get a bank loan.
It is also expanding with the help of capital, but some companies also focus on improving internal strength, such as JD.com; Some companies only focus on market share, such as ofo bicycles, and the product service experience has been not good. By the time the bubble is removed, the former is already resilient to recession, while the latter is dead when it twists and turns. When you are growing rapidly, you must distinguish which ones you earn by virtue of your ability and which ones are given to you by the general trend. Ren Zhengfei said: "What is success, like Japanese companies, after nine deaths and still alive, that is called success, we have not succeeded, we just grow." "It's good to be able to grow, but I'm afraid that I don't even grow, just grow.
l Accounts receivable, this indicator is appropriate. Assuming that the maximum is calculated according to the three-month accounting period, the total accounts receivable should not be exceeded.
25% of sales. Small businesses would rather reduce their profits than fight for full shipments.
Enterprises in the Internet era, such as Alibaba, Tencent, Xiaomi, etc., can develop rapidly, and a very important factor is that they are not affected by arrears, or simply they drag other people's money, and others are not qualified to owe them money at all. If you use Alibaba Cloud's services and don't pay on time, people can shut down your services immediately. Arrears and account periods, this is the current largest business environment, the most basic entrepreneurial environment. In the TOB business, this kind of vicious debt and non-repayment of debts will not break through, and ordinary people should really be cautious when starting a business. In the 90s, the most serious triangular debt in the history of New China, the total triangular debt was about 200 billion, accounting for 10% of the GDP of that year, which made it difficult for enterprises to move forward. Zhu Rongji personally took charge of clearing up the triangular debts, and paid a huge price to let the economy breathe. Huang Qifan made a report: In 2018, the debt of China's non-financial enterprises was more than 130 trillion yuan, accounting for more than 160% of GDP, the highest in the world, and the average debt ratio of enterprises exceeded 70%. Arrears, this is the current largest business environment, the most basic entrepreneurial environment. In 2022, the state requires central enterprises to take the lead in not defaulting on payments to small and micro enterprises, hoping to bring a ray of righteousness to our market economy.
In my practical experience, the credit of small ** companies with about 5-10 people is the best, and the advance payment they receive from customers basically covers our shipment payment. Because their contract amount is small, it is easy to ask users for money. The larger the company, the more it has to make a big contract, the lower the pressure, the more troublesome it is to urge the payment, and the customers who can pay according to the contract are high-quality customers.
Because of China's actual national conditions, there must be an account period between upstream and downstream and between major customers. An appropriate account period is conducive to market development, which tests the risk management ability of enterprises. Again, it can be relaxed during the upward period, and the general trend of the economy will cover risks; Tightening during a downturn will exacerbate the risk of arrears. In particular, ordinary small and medium-sized enterprises have limited funds, and all the needs that have no money are pseudo needs. One contract becomes a bad debt, and it takes at least five contracts to make it back.
2. Income statement.
l The gross profit margin of the product, if it is greater than 40%, indicates that the product is not in a vicious competitive environment and can earn good profits. In the current environment, it is becoming increasingly difficult to maintain normal profits. It's good to have a net profit of 10%.
3. Cash flow statement.
l Net cash flow from operating activities should be positive. Cash flow is the most important indicator, and it cannot be overemphasized.
Some business failures are due to cash flow interruptions, entrepreneurs should check their cash every day**, remember, every day!
Fourth, management indicators.
l Per capita output value, with the increase of sales, the per capita output value should continue to increase. It can't be improved by laying resources and paving people.
Sales. A healthy company should be in the upper middle. Ten years ago, my postdoctoral supervisor once told me that a per capita output value of 1 million yuan is a relatively good company, and now the per capita output value of my company is about 1.35 million people, which is not enough, and it is good to continue to rise to 2 million.
Many people are worried about China's aging in the future, in fact, Germany has long entered the aging population, but Germany's development is still not bad, and the products are still very competitive in the world, because their efficiency is constantly improving. The world's economic development is a long-term low growth, how to achieve profit growth when external sales growth is not high? It is to improve internal efficiency, which is "strong". Suppose the economic crisis comes, and sales fall by half, those companies with low per capita output value, no matter how big, will immediately go out of business, while companies with high per capita output will still have the possibility of surviving if their profit margins drop by half.
Looking at the situation of 28,853 listed companies in the United States, sales are directly proportional to the number of people 098 power, almost linear. Corresponding to the data of listed companies in China, sales are proportional to 08 power. It seems that our efficiency is a bit of a problem, the number of people has not led to the same proportion of sales growth, and the larger the scale, the lower the efficiency. It stands to reason that with the replacement of manual labor by production lines, the replacement of manual labor by information management, and the replacement of manual labor by automated warehouses, the larger the scale, the higher the efficiency. If there is a situation where the per capita efficiency is inversely proportional to the scale, the enterprise should be vigilant, and the scale effect has gone away? Is it the internal bureaucracy that is causing the decline in efficiency? Is it that the company's leaders only pay attention to "quantity" and do not pay attention to "quality"?
l Product quality. With the increase in shipments, the product defect rate should continue to decrease, and the average enterprise is 3-4 sigma.
Our company is currently 4 Sigma. The failure rate is 1 per thousand. If an industrial product can approach 5 sigma, it is a very good enterprise.
l Customer recommendation, the higher this indicator, the better. It's an indicator of whether your customer recommends your company to his friends.
More real than customer satisfaction. Customer satisfaction surveys can be perfunctory, even if he tells you that he is satisfied, he may not recommend it to his friends, in fact, he is still not satisfied. There is an action to recommend to a friend to prove that he is really satisfied. Our business indicators cannot deceive ourselves, and we must try our best to dig up the most real data.
l Customer satisfaction, according to the survey, up to 80 can make the enterprise achieve the highest profit, and then the profit will be.
Went down. There will always be special or even unreasonable demands from customers, and it will cost a lot to meet them. It is not that customers are not satisfied, but they are not satisfied with those services that cost a lot but do not achieve much satisfaction, try to spend money on the blade, spend on the occasion of less money and satisfaction, the company is an economic organization, and it is necessary to talk about economic benefits.
l Satisfaction of key employees, the higher this index, the better. A company, as long as 20% of the backbone employees work hard, it is fine.
Brought the rest of the ordinary employees into the driver's seat.
Note: Employee satisfaction is the goal, and backbone employee satisfaction is the means.
As an entrepreneur, you certainly have a responsibility to make all your employees rich. Achieving common prosperity is the purpose of the enterprise, because behind every employee is a family, which is a great responsibility. The company is not a company of a few people, but a company of all employees, and the strength of the company is not established by a few people, but by the joint efforts of all employees. As entrepreneurs, we should establish a fair and just system of more work and more rewards, stimulate the enthusiasm of all people, so that those who are willing to work hard can get fair rewards and achieve common prosperity. The company's business goal must not only be scale, profit or market value, but also must have per capita income of employees, otherwise it is not a common goal and a common cause. The company should not be too utilitarian to employees, otherwise employees will be very utilitarian to the company. Therefore, it is necessary to cultivate employees and let them grow together with the company.
However, the means to achieve common prosperity is to work more and get more, so that the 20% of the backbone employees who have created 80% of the value will get rich first. If you don't treat a good employee well, the good employee will feel unfair, and others will feel that they are doing a good job and doing a bad job. It is to let good people have good rewards, so as to establish righteousness in the company. As an ordinary employee, you must understand that wealth is made by everyone working together, not waiting to be divided by the company.
The goal and means of the market economy is that if an individual wants to be happy, he must first make others happy, and this logic transforms the self-interest of the individual's pursuit of wealth into the driving force for creating wealth and achieving the effect of altruism. In the same way, in the means of some outstanding employees to get rich first, we have the material conditions to achieve the goal of common prosperity for all employees of the company.
Chen Chunhua said in "The Essence of Business" that she studied those companies that have survived for 120 years, and there are two things that must be guaranteed, that is, legal conservatism and financial conservatism, that is, the strategy is a choice made under the premise of legal security and financial security, that is, it cannot violate the law and cannot be financially aggressive, which is the ability of self-restraint, and then the ability of enterprises to resist risks has also been improved.
There are indicators for health, this article lists the good range of these indicators, and the rest of the more business control indicators, generally in accordance with the standard of listed companies in the same industry +5%, as your goal, high standards for yourself. You may not meet these standards at this stage, but you have to think about how you can do it. If that's too much, you can refer to Welch's words: "A business only needs to evaluate three things: customer satisfaction, employee satisfaction, and cash flow." ”
The purpose of the enterprise is to survive and develop, as long as these indicators have not affected the survival security, then there is no need to worry too much, the rest is to work hard to develop. This is the relationship between the purpose and the premise, the relationship between attack and defense. For example, more cash flow is safer, but at the same time, it means that the money is used less efficiently. So as long as the cash flow can be safe, then the excess cash can be used for development. Just like driving, you must take into account safety and timeliness, the faster the better under the premise of safety, you don't have to worry about braking will affect your destination, no brakes will affect your destination. A lot of **, people, and many companies encourage it quickly, and the propaganda is also fast, and it doesn't matter if the subtext is opened quickly, how can you do it? The first thing managers consider is risk, because starting a business is not only difficult and long, but it is a blink of an eye to collapse. One of the weaknesses of human nature is to focus only on the benefits and forget about the risks. Don't lose your money in order to win a bigger victory. Everything depends on the accumulation of bits and pieces, and drips of water and stones can penetrate the earth, so why accelerate the curve and roll over?
The Three Kingdoms Ma Chao fought Cao Cao)" Xu Chu went into battle naked and was hit by several arrows. And Jin Shengsian laughed at him and said: Who told you to be shirtless? —Lu Xun's "Empty Talk on the Continuation of the Canopy Collection".