According to the National Bureau of Statistics, there are:In December 2023, the national consumer consumption index (CPI) fell by 03%, negative growth for three consecutive months, month-on-month **01%, which is the first time to turn positive after being in the negative range for two consecutive months; The national industrial producers** index (PPI) fell by 2 percent year-on-year7%, down 0. month-on-month3%, of which, the means of production ** decreased by 33%, the decline narrowed by 01 percentage point; The means of subsistence** decreased by 12%, the same decline as the previous month.
Looking at China's manufacturing purchasing managers' index (PMI) in January 2024, the manufacturing PMI increased by 02 percentage points, ending the downward trend for three consecutive months; The composite PMI output index rose 06 percentage points; The non-manufacturing PMI rose 03 percentage points, but the overall is still below the 50% boom and bust line.
These data show thatIn the long run, China's economic prosperity level will gradually pick up, but at this stage it is still facing a serious contraction in demand and a decline in residents' consumption power, which in turn will cause the entire means of production and living to be sluggish, resulting in a recession in the manufacturing index. Although the RMB M2 (broad money) has been in double digits every month in 2023**, the increased currency issuance has not entered the realm of production and consumption, but has turned into deposits.
Some data show that deposits have shown a trend in recent years, and in 2017 it was 1351 trillion, deposits have increased significantly after 2020, reaching 26 in 2022The highest point of 26 trillion is still 25 in 202374 trillion.
To sum up, today's entire economic environment is still shrinking demand, declining consumption, and consumers have no confidence in future expectations, which exacerbates involution and anxiety. In the face of such a situation, what should enterprises do when they are about to start construction in 2024? How can we cope with various shocks and difficulties, and at the same time accurately seize the changing market opportunities? This needs to be sorted out and promoted from the following six aspects.
A sense of co-spending in a downturn
Unified thinking within the company. In the face of the complex and changeable external environment, the business growth of the enterprise is sluggish, limited, damaged and even facing life and death, the New Year's start should be clear within the enterprise that the enterprise has entered a difficult period, so everyone must be nervous and go all out to devote themselves to it, so as to form an ideological system within the enterprise.
1. Team morale of coordination, initiative, active response, and overcoming difficulties together.
Only effective customer links are the basis of everything. Under the predicament, the only hope for enterprises to survive is to effectively link with customers, no enterprise can always rely on the efforts of entrepreneurs to do success, the vast majority of enterprises today can not do, so only the effective link with customers is the only way out.
Only creative efforts can have a future. When the enterprise encounters problems, customers may also encounter challenges, at this time only creative efforts have a future, we can no longer follow the rules as before, live a stable life, and must creatively solve various problems under limited conditions, and only employees and the company move together, it is possible to achieve.
Get the basis to live from the customer
Due to too much uncertainty in the external environment, we can not blindly shout slogans for the future, saying that it will be good, we must start from the reality to understand the real status quo and needs of customers, in order to make a correct judgment. There are three main points to understand:
First, understand the customer's business situation and clarify the reality of cooperation. Find out the current situation of the customer's business as soon as possible, serious enterprises may not be able to resume work, and some companies may stop some business or production lines although they look fine, and of course some companies may be good. Therefore, it is necessary to find out the customer's situation and understand the reality and possibility of cooperation, for example, some companies with cash flow can no longer continue to cooperate.
Second, understand the customer's business strategy and know the company's future production capacity and sales estimates. When we understand this, we can estimate the future production according to the customer's business situation. For example, some will cut off the production line, and some will say that due to the decline in sales, they will only cooperate with the top few merchants, which means that you can become the first person in the directory of other merchants, to see if there is an opportunity, because if the customer's sales are declining, it will definitely cut the first business, or cut off the share of the first business, at this time, it depends on how you do future business with customers.
Third, generate new customer insights and needs**. At this time, we know what kind of demand the industry we serve is in, and how to readjust our products, output, and target customers.
Simulate a company's income statement to form cash flow**
Once you've figured out the current situation of your customers, it's okayMaking a simulated company's income statement can not only predict what kind of revenue and cash flow situation it may be this year, but more importantly, form cash flow**.
How is the efficiency of an enterprise, not to see whether the book is profitable, but to see whether there is cash inflow, if the cash inflow is greater than the cash outflow, it is better, even if this can not be done, at least it must be flat, so that the enterprise can survive, if the cash flow is broken, even if there is a profit on the book may fall down at any time.
Therefore, after simulating the company's income statement**, if the simulated cash flow is positive, it means that you can continue to do business and may survive, if the results show that the cash flow of a certain month may be broken, it means that the cash flow is negative at a certain time, then you need to adjust the strategy, that is, to do the fourth step, make a decision based on the cash flow**.
Make decisions based on cash flow** and find a breakthrough point for revitalization
If the simulated cash flow of the company is negative or likely to be cut off at some point in the future, then the following four adjustments should be made immediately:
First, focus on effective customer purchases. Some customers really want to buy, some customers want to expand the purchase but it is actually impossible to form an order, the enterprise should distinguish and concentrate limited resources on the customers who can really generate purchases, which is to focus on effective customer purchases.
Second, grasp the collection, increase the turnover of accounts receivable and inventory, from profit to cash flow. In the past, in order to win customers, companies were willing to exchange worse payment terms for high profits, such as "long account period" and "low down payment". At this time, this cannot be the case, and better payment terms must be guaranteed first, otherwise even if the so-called surface profit is obtained, the future will be full of risks. Therefore, the premise of trading with customers must be to focus on recovering money, shrinking accounts receivable, and speeding up inventory turnover, all around making money turn up. Because in addition to turning the goods around, we also need to turn the money back in order to have cash flow back, and the most important key is to change from book profits to cash flow for enterprises.
Third, cut costs, including ineffective start-up and capacity, ineffective inventory, ineffective processes and management, and ineffective personnel. Especially when the cash flow is not optimistic or even negative, the company must cut those ineffective operating costs. For example, for those who can't form an effective purchase and can't increase the intensity of payment collection, then they won't open, and the loss will be smaller; For some inventories that have been pressed for a long time, they should be cleaned up; Ineffective processes and management are a waste of costs, which should be cut down; For those who cannot adapt to the status quo of the enterprise, and are not willing to change, and cannot tide over the difficulties with the enterprise, they should be laid off.
Fourth, reorganize the company's needs and positioning according to customer surveys. This step is to solve the practical problem of fundamentals, if the aforementioned results are that customer needs have changed, the market is also changing, then it is necessary to reposition the customer, it is possible that some subdivisions of the industry can not be done, or some segments of customers can not be done, and even some products can not be done, then it is necessary to readjust, sort out the company's needs and positioning. In other words, in this epidemic, we need to understand how we can position and change when customers are changing.
Communicate openly and honestly internally and externally to win more support and opportunities
After the above four points are done, it is equivalent to doing the company's entire strategy, and then it is necessary to communicate frankly with customers, employees, and ** organizations. Communication is the most effective means to solve many problems, especially frank communication, which is an effective way for enterprises to obtain a better business environment.
First, to the customer
Communicate with high-quality customers, increase contacts, and promote business. For example, those good customers who are financially sound and pay on time should increase their contacts and do everything possible to promote business volume.
For risk customers, the return is greater than the book profit. Although this kind of customer is also buying, he may have the risk of repayment and bad debts, and this type of positioning is a risky customer, so the return is greater than the heavy sales, and it is also greater than the heavy book profit.
For problem customers, it is necessary to stop supply, increase collection, and avoid bad debts. That is, for those customers who will die soon, at this time it is necessary to stop supply, increase accounts receivable, and avoid bad debts.
Second, to employees
Clarify the current situation and predicament of the current enterprise, and in the future, everyone can no longer be satisfied with the status quo, but must work together to tide over the difficulties. We should aim at business results, and everything should be measured by performance and strivers. Those who can not work together with the enterprise, to tide over the difficulties will be eliminated, can be according to the "talent nine squares" to find out, from the dimension of ability and willingness to assess, to cut down those who are not willing to work together, the company retains the ability, especially the willingness to work with the people, so that the real willing to struggle people get the best protection and returns. (Refer to reading "How to match talents at different stages of business development?") 》）
Thirdly, to ** and external institutions
YesActively understand and understand various policies such as ** and financial institutions, but alsoArticulate your initiatives to gain their buy-in and support；It is also important to communicate the series of measures mentioned above on how to improve production and business growth, and how to obtain external support.
Cultivate the wisdom of entrepreneurs and consolidate the Dinghai Shenshen needle of enterprises
In the current business environment, enterprises should do a good job in production and operation, in fact, entrepreneurs are the needle of the sea, and the test is the cultivation and wisdom of entrepreneurs.
As Lao Tzu said in the Tao Te Ching, "After the body and the body first, the outside of the body and the body, with its selflessness, so it can become its selfishness." Meaning,People have to let go of their desires to do things for everyone, but there will be more people to support you and make you better and better. From the perspective of business leaders and managers, it is to try to work hard for the material and spiritual happiness of your employees, and because you do not consider your own self-interest, everyone will come to help you achieve you, and your interests are the greatest, which is the wisdom of leaders.
And in the current volatile external environment, especially when enterprises encounter difficultiesEntrepreneurs should always keep a clear mind and a clear heart, and remove desires and selfishness, in order to truly understand the essence of things. At the same time, the more difficult times, the more to safeguard the interests of customers, safeguard the interests of employees, as much as possible to assume social responsibility, through this altruistic behavior, people can read your mind and pattern, naturally everyone is willing to follow you, achieve you. Finally, as an entrepreneur, we must know what the "Tao" is, and on the basis of not violating the "Tao", we must know what to do and what not to do, and to show our courage and determination.
It can be summed up in three sentences, that is".The inner clarity becomes wisdom, the outer altruism shows love, and the Tao is brave”。This is also the "benevolence, wisdom, courage" of "benevolence, wisdom, courage" that entrepreneurs should continue to cultivate.
Summary
How can companies buck the trend and grow?
In fact, in today's environment, there are still some traditional industries and industries that have grown against the trend, and the characteristics areIt is precisely the leading enterprises in each industry that are developing better and better, many of their revenues and profits are growing.
It can be seen from thisThere are no bad industries, only bad businesses.
So, in today's shrinking demand and serious involution, what can enterprises do to grow against the trend? In fact, the key to the success of these companies lies in the fact that they have made a lot of forward-looking layouts in the past few years.
First, the success of the strategic layout. Enterprises that grow against the trend will take the initiative to make strategic layouts, and they will regain insight into the evolution of the industry and customer needs according to the changes in consumption structure, so as to optimize the first curve of the enterprise, and even lay out the second and third curves.
Because the purpose of the enterprise is to operate, and the most important tool of management is strategy, especially in the economic downturn, relying on strategic layout to win has become a new core competitiveness of an enterprise. In the past, in the opportunity-driven era, enterprises could make money without talking about strategy, as long as they had the courage to intervene and had basic resources; Today, if you want to find that blue ocean in a red ocean world, the test is the ability of strategic insight, strategic positioning and strategy formulation.
Second, reconstruct core capabilities. In such an era of shrinking demand, declining sales, and serious involution, it can precisely reflect that such enterprises with contrarian growth pay attention to the reconstruction of core capabilities. Because, in the new normal environment, enterprises should follow the layout in line with the cycle, in line with the national and industrial directions, and at the same time upgrade products, that is, to build their core competencies along the new smile curve of the enterprise. Either to do the ultimate cost performance, or the ultimate differentiation or the ultimate sense of experience. Without the advantage of cost performance and the lack of differentiation, it is difficult for such an enterprise to survive.
Of course, this core competency must be built around the needs of customers, and enterprises should carefully study the new needs of customers, and think and form their own unique ability under the new needs. This capability includes not only technology, products, and business models, but also a new ecology that is in line with this era.
Third, special attention should be paid to the psychological construction of the entrepreneur himself and the team. In an era of changeable and uncertainties, only the self is certain, and people will not be crushed by external threats only when they are not affected by the external environment.
Therefore, the more difficult or even the moment of life and death, the more we must pass on this confidence to the entire team, organization, and customers, and inspire everyone to work together to overcome difficulties, so as to truly walk the predicament and break out of a bright road.