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Business Costs Rise To Become "Profit Killer" Of Small Businesses In Pearl River Delta

2011/10/13 9:20:00 43

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A joint survey by enterprises shows that the decline in profits has become the hardest part for the small and medium enterprises in the Pearl River Delta this year.

The Pearl River Delta small business operation and the formation of the survey.

financing

The survey report shows that the profit of small enterprises has dropped sharply this year, compared with 2010, the average profit has decreased by 30% to 40%, and business difficulties have increased.

In the face of rising production costs, small businesses lack the ability to increase profits through brand building and core technology.

The report was jointly completed by the National Development Research Institute of Peking University and the Alibaba (China) Limited.

According to the report, the report is a field visit to 95 small businesses, 11 professional markets and 15 local banks in the 6 counties and cities of the Pearl River Delta since September, and finally formed through online surveys on the 2889 small businesses around the Pearl River Delta.

One of the report's publishers, Hu Xiaoming, vice president of Alibaba group, said the survey of SMEs in the Pearl River Delta region was followed by a survey of small businesses in Zhejiang.

Small enterprises are the core competitiveness of China's participation in global market competition. Zhejiang and Guangdong are one of the most intensive regions in China's small businesses. "The results of the two survey have made us realize that China's small businesses have extremely strong vitality, but lack of effective guidance and financing support, giving effective guidance and giving small enterprises support at the level of financing and so on."

According to the report, 72.48% of small enterprises in research enterprises say that the rising cost of raw materials is the biggest difficulty in the current operation.

The cost of raw materials in most industries increased by 20% to 50% compared with 2010.

For example, the price of raw materials and fabrics in clothing industry has increased by 30% to 80%. In previous years, the cost price of the cotton sweater fabric was about 25 yuan, and this year it rose to 45 yuan. In the past year, the fabric cost price of the cotton T-shirt was 5 to 8 yuan, and now it rises to 10 to 15 yuan.

Most small businesses are in

industry chain

At the end, the pressure of rising costs can not be pferred to the pricing of products, only to lose profits.

In addition, the increase in labor costs, reduced orders, and exchange rate changes also weaken the profits of small businesses.

While the profit margins of small businesses are constantly being compressed, they lack the ability to enhance profits through brand building and core technology.

The report also pointed out that although the operating rate of enterprises has been declining, the phenomenon of small enterprises' "suspension and pformation" has not appeared in large scale.

In the face of difficulties, most of the enterprises with low operating rate are mainly thin, rather than closed factories.

According to the report, the current policies of various countries and small businesses need to be put to the floor to improve the living environment of small businesses.

In addition, the report suggests that tax policies should be leaning towards small businesses, encouraging tax cuts, financial discount, income tax relief and provision.

Preferential tax rate

In other words, reducing the tax cost of small enterprises is conducive to the coordinated development of social economy and the further development of small enterprises.

In addition, some small businesses interviewed have realized the importance of brand and channel. They hope to increase the added value of products through brand and channel construction.

The report suggests that relevant policies should be adopted to guide small businesses to strengthen brand building and change the pattern of profit in the past.

The report recommends that improving the financing channels for small businesses as soon as possible is one of the practical needs of the current small businesses. It is recommended to encourage the rapid development of financial institutions serving small businesses, especially micro enterprises, and encourage business model innovation and product innovation.