Small Businesses Cautiously Deal With Five Major Business Risks

Although small businesses are "small but good", they can only "go downstream" because of the "small root basis". They cannot "reverse the water" and can not control the risk.

From the actual situation,

First, venture risk

Such risks are prone to occur at the initial stage of corporate entrepreneurship.

The venture risks easily arise in small businesses are: owners pay too much attention to the development and production of products, ignoring the problems of long-term development of enterprises, such as the clarity of the property rights of enterprises, the standardization of management system, the lack of research on the potential demand of the market, the lack of foresight in the trend of market change, the overoptimism in the estimation of the macro industry situation, the lack of comprehensive management ability of operators, the failure to establish necessary financial accounts, improper selection of equipment and technology, the underestimation of funds needed, and the neglect of taxation.

Two, cash risk

This risk is mainly reflected in the huge balance of profits at the end of the profit and loss statement, but in fact, the final amount in the corporate cash table is almost zero or even negative.

The operator thinks that the profit on the book is cash. In fact, this is a misunderstanding.

Cash is the blood of an enterprise. From the daily business activities, it is only by providing enough cash that the enterprise can operate normally.

Cash risk is mainly manifested in: owners only interested in the main financial indicators of enterprises, such as asset liability ratio and return on net assets, while ignoring the problems covered by indicators; paying too much attention to the growth of profits and sales, ignoring the cash in hand; excessive investment in fixed assets, resulting in reduced liquidity of enterprises, resulting in the accumulation of funds; the blind expansion of enterprise scale and lack of corresponding short, medium and long-term plans.

Three, authorization risk

After many successful small businesses have reached a certain scale, the owners or managers find it difficult to manage the whole business of the company by singing the "one-man show".

At this point, some management work needs to be delegated to others to undertake the main tasks.

The main manifestations of authorization risk are: the uncertainty of personnel selection; the responsibility of others and the complicated decision-making affairs; the existence of psychological barriers; the authorship that "only I can do well"; lack of ability to select and guide others; lack of trust in subordinates, business development and responsibilities, but the time spent by owners or managers in managing and managing enterprises has not increased.

Four, financing risks

When the operation of enterprises reaches a certain stage, the original owners are unable to continue to provide the necessary funds.

In particular, fast growing growth enterprises are often faced with insufficient financing risk and they will raise funds from various sources.

For example, the initiator increases shares, offers public or seeks unsecured loans, asks financial institutions to subscribe for shares or grant regular loans, and lease equipment from leasing companies.

The problem is that every means of obtaining capital has its advantages and disadvantages. If the operator is not good at avoiding weaknesses and making use of them, he will get into trouble.

Five, continuing business risk

As time goes on, the original managers of an enterprise will gradually grow old, age and busyness will make it less and less capable of doing their job as before.

When a founder or an owner dies, is chronically ill or unable to work, the risk of continuing operation will come.

It is mainly manifested in: when the risk comes, who is not ready to take over the management responsibility; the second officer does not own the necessary shares in the enterprise; no authorization, lack of planning, overconfidence, and debts arising from estate tax.