Small and medium-sized enterprises from scale expansion to stable operation relying on self-upgrade

Recently, the "Boss Consultant" of Yizhong Company released the "2013 Small and Medium-Sized Business Operation Survey" report. The report shows that due to the influence of the global economy, more than half of SMEs have failed to achieve profit growth. SME bosses no longer place their hopes on scale expansion and market growth, and instead start to focus on internal development, focus on cultivating internal strength, and tap corporate management dividends. , take reasonable reform actions, and look forward to realizing the stable operation of the enterprise.

In 2012, more than half of SMEs failed to achieve profit growth

The survey report shows that among the interviewed companies, more than half of SMEs failed to achieve profit growth in 2012: companies with increased turnover and increased net profit They accounted for 45% and 32%, respectively, down 21% and 19% from 2011.

Looking back at 2012, some SMEs overestimated their profitability. According to the survey data, at the beginning of 2012, nearly 50% of the interviewed companies believed that their future operating conditions were "relatively good" and "very good", but by the end of 2012, only the respondents whose actual operating conditions were "relatively good" and "very good" were only less than 30%.

This kind of over-optimistic prediction about the profitability of enterprises is basically an inertial thinking that follows the rapid expansion of the scale of enterprises in the past few years. The overly optimistic operating expectations at the beginning of the year have been dashed. (Figure 1)

The main factor affecting corporate profits is still rising costs

The survey shows that since 2012, the two most important factors affecting the profitability of enterprises are still rising labor costs and rising raw material costs. In addition to rising wages and RMB appreciation, another important reason for this phenomenon is that labor-intensive production methods have not been adjusted in time, and the situation that most small and medium-sized enterprises are overly dependent on demographic dividends has not been changed in time. Adjusting the production structure and improving labor productivity has become a problem that small and medium-sized enterprises must face.

In addition, the survey also shows that, for enterprises in the southeast coast, among the factors that lead to the decline of enterprise profitability, the reduction of orders has become the fastest rising one, surpassing the factor of rising costs. The weakening demand and the shrinking market mean that the operating difficulties faced by small and medium-sized enterprises may continue for a period of time, waiting for the market to warm up.

The biggest headache for some small and medium-sized enterprises in the northwest region is still the lack of funds. In addition, the poor financing channels and the high cost of bank loans make these enterprises very cautious in financing, and some enterprises are difficult to alleviate the shortage of operating funds. (Picture 2)

In this case, many SMEs do not Then, the profitability is simply hoped for scale growth, abandoning the previous attitude of rapid expansion, proactively laying off employees, adjusting the structure, turning to focus on the internal management of the enterprise, focusing on cultivating internal strength, taking reasonable reform actions, and looking forward to achieving a soft landing of business operations.

Controlling the speed of expansion and realizing self-upgrade

Faced with declining profitability, most small and medium-sized enterprises have begun to adjust their corporate strategies, control the speed of development, and shift from pursuing rapid expansion to exploring potential within the company to enhance their competitiveness. The main countermeasures adopted include: cautiously expanding investment, strictly controlling costs, attaching importance to product innovation, improving management level, retaining talents and improving labor productivity.

The survey shows that the willingness of small and medium-sized enterprises to expand and invest slightly decreased in 2013, and 45% of the enterprises chose to "continue to expand and make additional investment", down 10 percentage points from 55% in last year's survey. On the one hand, small and medium-sized enterprises are more cautious in expansion and investment; on the other hand, it should be noted that companies that expand and "maintain stability" account for 77% of all interviewed companies, indicating that scale shrinkage has not yet become the main tone of small and medium-sized enterprises.

What is gratifying is that almost all small and medium-sized enterprises are implementing "internal innovation", and innovation has become one of the most important means of improving business conditions for small and medium-sized enterprises since last year. At present, the most common innovation forms of SMEs are: management method improvement, service improvement, process improvement, and new product development. (Picture 3)

Most SMEs indicated that in the fiercely competitive market In order to maintain profitability, enterprises must rely on continuous internal innovation.

SMEs are gradually "accustomed to" facing the trend of rising labor costs and raw material costs, and they have begun to actively digest the above two irreversible through internal management upgrades. Factors, the main methods are: adjust the organizational structure, control operating expenses, increase the performance ratio in compensation, improve employee work efficiency, etc. (Figure 4)

Intense competition and sluggish market, external pressure to transform and upgrade the enterprise—management upgrade, product upgrade, has now become the most important means for small and medium-sized enterprises to continue to survive and develop.

The survey found that product innovation has become an indispensable driving force for small and medium-sized enterprises. Nearly 20% of the companies surveyed said that at least 20% of their revenue comes from new products.

Internal tapping has also allowed small and medium-sized enterprises to gradually realize the standardization of management. According to the survey, 26% of the interviewed enterprises believed that their enterprise management was "relatively perfect" or "very perfect", an increase of 4% compared with the previous year; The proportion of companies with “very imperfect” management dropped from 13% in 2011 to 5%. (Picture 5)

Multiple ways to keep people, no longer blindly dependent High Salary

With the rise in labor costs, talent recruitment has reached the salary ceiling of SMEs. Therefore, SMEs have begun to use a variety of different methods to attract and retain talents. Among them, the three most valued by business owners are: increasing Corporate identity and sense of belonging, providing a good career development path, and a systematic reward and recognition system, followed by "high salary (above the market average)". (Figure 6)

In order to achieve the goal of talent recruitment and retention, most Small and medium-sized enterprises have obviously strengthened the construction of corporate culture. According to their actual situation, they have adopted a development model suitable for their own enterprise management mode, designed a corporate culture implementation plan that conforms to their own actual situation, and gradually realized the refined and humanized management of employees. Enhance the sense of belonging of employees.

Small and medium-sized business owners who resist pressure, undertake, and persevere

In recent years, due to the impact of the economic downturn, most small and medium-sized enterprises are under greater operating pressure. The irreplaceable role of the organization.

The survey shows that 43% of small and medium-sized business owners feel heavy pressure, 54% feel moderate pressure, and only 3% of business owners feel comfortable in business operations. Only 3% of business owners feel comfortable running a business. (Figure 7)

Among the respondents, more than 80% of the SMEs Bosses said they would take the initiative to bear the pressure. At the same time, quite a number of people also said that the load of running and managing enterprises was heavy, and more than 40% said that they were busy with work and lacked leisure time. Only 4% thought that business operations were "relatively leisurely".

Even under the difficult operating environment and enormous pressure, most SME owners are still optimistic about China's economic development prospects in the next three years. According to the survey data, 42% of the respondents are optimistic about the future, and Yu said that the proportion of not optimistic about 22%. In addition, what other reasons make small and medium-sized business owners insist on "carrying out the business to the end"? The results of Yizhong's survey are: responsibility for employees; realization of self-worth; responsibility for family; the above three are the main reasons for this group of people to continue to persist in business operations. (Picture 8)

In business operations, the number of SME bosses is increasing The more they realize the importance of employees, when asked who is more important in the corporate ecosystem, although the proportion of business owners who choose "customers" is the largest, if the proportion of companies that choose "senior managers" and "ordinary employees" is added up , its value exceeds the proportion of enterprises that choose "customer". The survey results show that many SME bosses regard their employees as partners fighting side by side, and devote their affection and training to them.

The survey shows that the group of "SME owners" all regard "responsibility" as the first choice for running a business, rather than profit-seeking in the usual sense. This survey result may reverse some people's prejudice against SME bosses. The survey process also shows that most business owners can clearly recognize the qualities that a good boss should have, and can practice them in their daily operations. (Figure 9)