How to survive as a small business

How to survive as a small business

It is said that it takes ten years to sharpen a sword, but in China's increasingly competitive market, how many companies can do it in ten years? Many companies Disappeared in three or five years, or even less. There are various reasons for this, but after all, there is a problem in a certain link, which leads to the gradual loss of profitability of the company, the complete collapse of the company, and elimination becomes inevitable.

An enterprise must grow from small to large. What needs to be solved initially is the problem of survival. If we explore how each enterprise solves the problem of survival in the early stages of development, there are many possible answers.

The author once had an in-depth understanding of a liquor company in H Province. This company is a typical family business located in G Village, W Town, H County, H Province. The elder brother is the chairman, the younger brother is the marketing general manager, and the daughter He is responsible for finance, and his sister-in-law is responsible for production. Most of the production workers and sales staff are his relatives and neighbors from the village.

During the development process, the company also hired external talents to serve as general manager of marketing, but in the end, because there were too many bosses, it was difficult to carry out the work, and most of them died halfway. In the early days of the establishment of the company, because Mr. L had many years of experience in operating local trading companies and had a sound network of counties and towns, the low-end liquor produced was also selling well in the local township market.

In its 9-year history, it has always adopted a low-price contracting model, with sales staff or dealers developing their own products. It has also been popular in some markets in southern H Province for many years. In 2005, under the huge protective umbrella of the local government, the company began to prepare for rapid development and expansion, and this costly game was played out.

1. Blind investment, lack of funds

?Development is the last word?, a saying that Chinese people are familiar with. But how to develop, every business operator will study this issue related to the fate of the business. The government of H County, a national-level poverty-stricken county, is also considering how to develop it.

H County, like other cities in China, has begun to prepare for the establishment of development zones and to attract investment. Mr. L seems to have seen the hope of development, focusing on public relations, enclosing large areas of land, and assisting the government in attracting investment. The hard work paid off. After many efforts, we reached an agreement with a company to prepare for the construction of a brewery. Mr. L was responsible for the construction of the factory. The cooperative company was responsible for preparing the factory building and the cooperative company held the majority share.

What the government needs is political achievements. After giving the land, you need to give it money. Mr. L raised money everywhere and invested all his savings over the years into the land for the brewery, but there was still a big gap. Banks are pressing for land payment, breweries are unable to produce profits, liquor factories lack investment, the market is stagnant, the off-season is too weak, the peak season is not prosperous, there is no basic market support, and there are serious problems in the capital chain.

2. High investment, design to make money

L is always a smart person, always has a plan in mind when encountering problems. He cannot get a bank loan and has insufficient self-owned funds, how to make money?

By chance, Mr. L once again saw the light of day. W Company in H Province was originally a regional brand huddled in X City. After cooperating with Y Waimao Company, it quickly grew into a province-wide brand in 2 years. As a leading sex brand, sales have doubled year by year.

In a surprise attack, he hired Company Y to fully integrate the liquor he had been operating for many years, and used Company Y's reputation in Province H to design a money-making scheme. Company Y has certain standards for selecting customers to serve, so how can such a small factory attract the attention of Company Y?

When negotiating with Company Y, the annual sales of 12 million yuan was exaggerated by Mr. L. 60 million yuan, a pile of arrears. It is said that he has never taken out a loan in these years. The self-held funds are benign. The latest loan of 10 million yuan will be paid immediately. Mr. L was very ambitious. The service fee was nearly 100,000 yuan a month, but Mr. L did not make any sense. The service contract was signed in this context.

The cooperation officially began. Company Y set up an independent project team to enter the enterprise and provide in-depth services to the enterprise from the three major areas of brand building, market management and marketing organization reform.

At this time, the project personnel of Company Y really felt that the problems in the company were much more serious than imagined. The company has no basic market at all, and sales of 60 million are unwarranted. Human resources are scarce. The highest educational level of company employees is high school graduation, which is very rare. Most employees have not completed junior high school.

A large number of problems and doubts are placed in front of Y Company, but since we have cooperated, we must do things well, no matter how difficult it is, we must do it step by step. Let’s start with people. Company Y goes to the talent market to recruit people on behalf of the company, organizes training, and helps companies negotiate with dealers. The work they do is completely beyond the scope of services provided by Company Y.

With the efforts of Company Y, the company successfully held its first investment conference. Dealers from all over the province were confident after listening to Company Y’s lectures and believed that in Company Y’s systematic Under operation, it can create a miracle in the liquor market of H Province.

The investment fair was over, and payments for goods from all over the province were deposited into the company’s account one after another. Mr. L smiled. But then a problem arose. The money was gone. Within a few days, the money was gone. It was all used by Mr. L to repay the loan. There was no money to pay the suppliers, and the bottles, packaging, and related promotional materials were not in place. After half a month, only a few goods were sent to each market, let alone promotional materials. Catering channels If you can't get in, terminal distribution will be blocked, TV ads, etc. can't keep up, and product visibility won't be built. The confidence of the dealers was damaged, the morale of the sales staff was low, and Company Y was unable to do anything.

3. Cruel reality, falling into trough

Without any market support, big problems soon appeared, and dealers returned goods one after another. Mr. L was detained by a dealer when he visited the market in City J and was released only after he promised a full refund. The entire enterprise has completely stopped operating. Sales staff and logistics managers have nothing to do and cannot receive their wages, so they have resigned one after another. The company is in critical condition, and Company Y looks up to the sky and sighs, ?Liar?!!!

4. My opinion on the survival and development path of small businesses

Let’s look at the company mentioned above and use one sentence The most appropriate saying to describe it is: "You want to learn to walk before you have learned to crawl". Who is responsible for the reason why this company is in critical condition? Is it Company Y’s responsibility? Obviously not. Is it the distributor’s responsibility? Nor is it.

We are very clear that it is the responsibility of the enterprise to make as big a cake as the pot should be. For small businesses, they should focus on their core industries and seek greater development based on a good market and funds.

1. The first is strategy

For small businesses, the strategy of a business is to find opportunities. To find blank spots in the market, looking for opportunities is actually a tactical move, but small businesses do not need to formulate standardized policies. Strategy, the core goal of an enterprise is to survive, and tactical actions are strategies. Then, based on market opportunities, the company relies on the "category first" strategy to quickly become a leading brand in this blank market.

Establish your own core market and focus on one point. Only by establishing your own core market can you ensure your own good cash flow. Don’t overspend for the best. The big market and big brand strategy is something that large companies should consider. The expansion of the market means an increase in investment, and an increase in investment often does not mean an increase in income. The ability to resist risks of small businesses is generally limited. It is relatively poor because it does not have the ability to expand the market and fight against large risks.

Do your best at what you do best. The traditional barrel principle holds that the amount of water a barrel can hold depends on the shortest wooden board. Now we think small businesses need to look at their strengths and make the longest board the longest. The barrel does not have to be filled with water, it can also be filled with stones or other objects.

2. Next is product

In the 4Ps of Chinese marketing, products and channels are the decisive elements for success. The product is the sharp knife that opens the way, the product is the means to conquer the world, the channel is the foundation, the channel is the harvester, and the channel collects the results of the product one by one.

Modern marketing has changed from the previous advertising war to product war and channel war. Products have become the starting point and momentum building point for all marketing elements and activities. Without products, all marketing is empty talk. Therefore, modern marketing revolves around products, and the most critical thing about products is innovation. Regardless of whether the company has truly revolutionary product innovation points, the company must innovate its products and continuously launch new products. Without product innovation, there will be no market and there will be no successful company.

For small businesses, products must strive for a single breakthrough.

This single point does not mean that there can only be one product, but that the positioning or concept of the product must be single. When a company initially enters the market and does not have the ability to operate multiple products and multiple channels, it will generally choose a core product (or A product series led by a core product) enters the market. In terms of product positioning and brand positioning, we can only choose a precise positioning, that is, to be "number one in the category". By concentrating resources, we strive to gain a leading position in a local market or a certain market segment and achieve a breakthrough in a single point. For small businesses, products have many shortcomings and disadvantages, and they are valuable and focused, and single products have the greatest power.

3. Human resources again

Small businesses need to build a sales force with high loyalty to the company, put the best people in sales positions, and everything is based on Sales is the core, and sales will inevitably drive the growth of the logistics support department.

When setting up the sales team, design a flexible salary assessment system to make the sales staff understand that only when the company grows and sales increase can personal pockets be bulged.

We wish that China’s small businesses can grow into large enterprises, and that large enterprises can become century-old enterprises! Have a good journey, everyone!!!