Don'T Let Profits Go.

What is persistent is often the most disturbing thing.

Some enterprises

Nowadays, in the process of pursuing profits, there will be some misunderstandings: gross profit margins are declining.

The question is whether the decline in gross margin and gross margin is actually the result of competition, which means we have to lower prices or increase in cost during the period, resulting in an increase in management costs? Gross profit is less than cost.

The company sells its products with profits, but profits are deducted because of the rising cost of the period.

The enterprise has become the so-called "passing money God", and "profit" has only gone through a stage in the operation of enterprises.

For a long time, the net profit of enterprises declined.

How did profits come to pass?

Chinese enterprises generally experience three stages of development:

The first stage is the start-up period.

This period is about three to five years. During this period, two main problems need to be controlled. That is: whether the main business is mature and whether the client group is stable.

The key to sticking to this stage is the need for a steady cash flow.

The second stage -- the period of rapid growth.

At this stage, the main task of the enterprise is to ensure the rapid growth of business and the good control of the ability to allocate funds.

The interval is about five years.

Many domestic enterprises have grasped the opportunity of the second stage to become bigger and stronger.

We can use three verses to describe the enterprises that have grown up during this period: when you are in the stage of entrepreneurship, it is like a word written last night, "the west wind is withering trees, the tall buildings alone."

The important thing at this time is to stabilize the business capability. If this stage is done well, the enterprise has entered the second stage: "the belt is not regretted at the end, and it is haggard for the people."

At this stage, we are still doing a good job, so the enterprise will go to a higher platform: "suddenly looking back, the man is in the shadow of the lights", that is, the enterprise is maturing.

This makes

In the pition period, the growth rate of enterprises has dropped.

Today many enterprises in China have reached the third stage.

What are the characteristics of the third stage? That is, growth slows down and profits lose.

Enterprises must develop new profit sources and market sources.

The characteristic of this time is slow turnover and serious loss of net profit.

Therefore, the fundamental problem for today's Chinese enterprises is to follow the law of enterprise development, keep pace with the times, and change at the right time.

Horizontal observation of world famous large enterprises has gone through such a process, whether IBM or HP, they will go through fifteen or twenty years.

The first big problem is that many of our enterprises have to overcome their inertia in starting and growing up, and many enterprises are moving forward on this road.

The reason is that they are still managing enterprises in the entrepreneurial stage.

This typical characteristic is manifested in the blind pursuit of growth.

Such enterprises do not consider the growth of effectiveness, but consider expanding blindly.

This expansion is manifested in the possession of assets and resources.

They think this is the growth of enterprises.

What is the key to running an enterprise now? The key is to maximize input and output.

Extensive operation has not matched the needs of enterprises, and has not been able to keep pace with the development of the times.

The arrival of the information age indicates the accumulation of wealth, not just the possession of resources, not only the ratio of input to output, but also the speed. Therefore, the growth mode of enterprises needs to be changed.

The second problem is the misunderstanding of the scale of enterprises.

Blindly pursue the scale, make the scale become the burden or even the burden of the enterprise, and the profit will be cleared up by its own scale.

Therefore, enterprises should re recognize the two words of "scale".

The third problem is the turnover mentioned above.

An indicator that entrepreneurs should be familiar with: sales profit margin.

That is to say, how much profit can be realized in every one hundred yuan of sales.

Now China has a very high voice, that is, "the coming of the high cost era", the price of raw materials is rising, the price of energy is rising, the cost of labor is rising, the land price is also rising. After the advent of the high cost era, the net profit of sales has been getting lower and lower.

This decline in net sales has also affected China's overall corporate level.

We can see a very obvious feature. Today, the vast majority of Listed Companies in China, the sales profit seven percent points, eight points, are lower than our country's GDP, which is lower than our country's economic growth rate.

This fully illustrates.

Our enterprises are not strong enough to create wealth.

How to create profits?