Analysis of the causes of corporate crises
"A three-foot-long freeze does not last in a day." When companies encounter difficulties, the influencing factors are complex. Statistical analysis of the operating difficulties of various companies , the reasons are also varied. Below is the knowledge I bring to you about the analysis of the causes of corporate crises. Welcome to read.
Enterprise sales are not smooth and operating losses
Enterprises often only focus on the profit of products on the "profit and loss statement", but ignore the situation that may still be a loss on the "balance sheet" , in the author’s diagnostic counseling experience, there are many such operators.
The first reason for enterprise failure is "operating losses". If operating losses exist in a short period of time, the enterprise can also use company funds to overcome this difficulty. As time goes by, loans from financial institutions will be considered , or use commercial credit borrowing between enterprises to obtain temporary financial facilities. However, if the operating losses are long-term, we must get to the root cause and find solutions. Otherwise, whether it is borrowing from banks or transferring capital from peers, the interest burden will only become heavier and heavier. At this time, the company may be facing a crisis. .
Unable to adapt to turbulent environmental changes
The dinosaurs were unable to adapt to changes in the environment and died; and in the current rapidly changing business environment, it also confirms the wise saying that the fittest will survive and the fittest will survive. , for example, Japan's Toyota cars swept across the new U.S. market, forcing U.S. automakers to suspend production and reduce production, resulting in heavy losses.
The markets and customers of small and medium-sized enterprises are too concentrated, so their risks cannot be diversified. If they are engaged in a single-product business model, once the business situation turns bad, they will not be able to take contingency measures. They will have to "sit back and wait for the consequences". ".
For example, the economic downturn in 1982 and the impact of the government's tightening monetary policy caused an unprecedented crisis in the * housing construction industry. Many construction companies declared refunds and went bankrupt. Therefore, operators must have keen insight, observe changes in the environment early, be able to adapt to changes in the environment, and make timely and flexible adjustments to business goals and policies in order to avoid the occurrence of a bankruptcy crisis.
Insufficient turnover
The main reason for difficulties in capital turnover is the mismatch between the source of funds and the period of use.
For example, the funds raised are intended for short-term use, but the company uses them for long-term investments such as building factories and expanding equipment. Short-term funds are used for long-term investment. When the company needs a large amount of funds, or when the short-term loan period expires, the company will not be able to come up with the money, so of course it will have liquidity difficulties.
There is a common phenomenon in the corporate world, that is, when the economy is good, it is easy to borrow money from banks, or when inflation continues, people often borrow heavily to purchase real estate. Because at these times, the appreciation rate of real estate is much higher than the interest rate. Once the economy is in recession or there is an oil crisis, the severity of the recession will become increasingly severe. If an enterprise purchases a large amount of real estate without careful planning, the funds will be frozen because it is difficult to sell, resulting in serious liquidity problems.
Most people often mistakenly believe that as long as there is a surplus, there will never be difficulties in business operation. In fact, if a company that is profitable and has a surplus has accounts but no money and lacks working capital, "surplus bankruptcy" will still occur. situation (for details, refer to Chapter 15 of this book). The second purpose of business operations is to obtain profits, and the second is to sustain operations; in other words, making money is important, but being able to continue operating is equally important! If an enterprise wants to achieve the second purpose, the smooth turnover of funds must There is no other way, but whether the capital turnover is flexible is only a symptom of whether the company's operating results are good. Therefore, if we want to avoid capital turnover inefficiency, we must trace the root cause, find out the symptoms, and eradicate them completely. Otherwise, even if it can be turned around for a while, but the disease is not eliminated, it will relapse one day!
Mistakes in diversified investment
Diversified operations or over-investment will lead to business failure. Risk of crisis.
Although diversified operations have the advantage of spreading risks, during a recession, any one of the departments may be in danger at the same time. As a result, the risks are not only not dispersed, but may be concentrated and doubled; diversification Although the organization method can adopt the method of profit center or different company names, due to their close relationship, they will still be involved in each other.
Due to the overheating of the economy, business operators often blindly expand the scale of production and sales and make huge equipment investments, failing to understand the changes in the marketing market and have sufficient capital plans, resulting in funds being frozen in fixed assets. Bitter fruit. For example, without considering their own financial weakness, they blindly expanded equipment to achieve a plan to double the original production capacity. However, they encountered a depression in the market and the machine rate was greatly reduced, resulting in an increase in interest burden and fixed costs. As a result of the surge, its operating results suffered heavy losses and faced bankruptcy.
Insufficient own capital, borrowing interest is too high
Small and medium-sized enterprise operators always hope that investing one yuan of capital can create sales of one hundred yuan. If there is a shortage of funds, or even borrowing with high-interest loans, resulting in a poor financial structure, it is no wonder that the proportion of self-owned capital (total self-owned capital) of ordinary enterprises is rarely more than 50%.
If you do not pay attention to the business crisis of insufficient capital, once you face a sluggish business environment, the effect will be counterproductive. Due to your own weak capital, you will have to bear heavy interest expenses, resulting in even more serious losses. , will create a vicious cycle of short capital and suffer negative consequences.
Providing guarantees for other companies and being implicated
Providing guarantees for other companies and being implicated. This kind of example happened very frequently this year. Exchange notes (checks, checks, etc.) with others Promissory note, promissory note) also belong to this type.
Due to the habit of using postdated checks as credit instruments, endorsement guarantees and exchange of bills have become common methods for corporate financing. In fact, this approach is extremely risky. For example, in the famous case of the closure of Guoso Company in the past, those manufacturers who exchanged checks with Guosu had no hope of cashing their checks, but the checks they wrote had been discounted by Guoso from financial institutions. When it expires, the result will be a chain of collapses.
Another example is the crisis of Baolong Company, which has also dragged down the related companies such as Great Wall and other mutual guarantees, creating a knot that is difficult to untie.
What’s more serious is that the corporate world often likes to open several companies and then guarantee each other. Of course, this is also an abnormal phenomenon derived from the requirement of financial institutions to provide guarantees. This kind of legal conjoined twins, if one company has a problem, all related companies will be pulled down; and if outsiders or business owners themselves have to solve the problem, it will become so complicated that it is difficult to figure out a clue. , and in the end even the subsidiaries that could have survived were dying.
Too much inventory
The reason for too much inventory may be that the original estimate of the boom was wrong, excessive expansion caused the inventory to be too high; it may be an internal management problem; or it may be due to Failure to wait for orders may cause manufacturers to have liquidity problems. The famous Housheng Rubber Company had too much inventory in its early days, causing foreign banks to withdraw its money. Fortunately, with the support of major banks, it avoided a crisis of poor liquidity.
All accounts receivable cannot be collected smoothly
Accounts receivable are difficult to collect, and the money is delayed; or the quality of the accounts receivable has deteriorated, and the check has bounced. , The fate of high bad debts has also dragged down the company itself.
Operators are not dedicated
Operators lack care and management for their own enterprises and are not committed to management. Instead, they spend energy on socializing and public activities outside the enterprise, and unknowingly leading to business failure.
Personnel disagreements within the company
If there is an "internal" situation of personnel disagreement within the company, it will reduce productivity in the least case, shake the foundation of survival in the worst case, and "dig one's own grave", even if it is a shareholder , Infighting within the management class is most likely to cause a company's crisis.
Secondly, it is the company cadres. If employees are at odds with each other, factions arise, they undermine each other, and cause internal dissatisfaction, it will accelerate the company's fall into trouble.
In addition, the quality of employees and the lack of team concept will also cause danger.
Once a company suffers a loss, it will shake employees' confidence in the company, because there may be salary delays, salary cuts, worsening benefits, or no hope of salary increases, resulting in employee dissatisfaction. This situation often accelerates the company into trouble; therefore, in If there is a surplus in normal times, it is necessary to improve personnel management, promote good employee relations, and cultivate the team spirit of employees sharing the joys and sorrows, so that when the company encounters difficulties, it can obtain the support of employees and work together to tide over the difficulties. . ;