Chapter 12 Chapter 11 Assets, nothing, no money left

Many people do not consider the importance of working capital at the beginning of their business, so they start a business rashly without sufficient working capital.As everyone knows, there are too many entrepreneurs who have to close down because they do not have sufficient liquidity when their business is not going well after starting a business and they need to stick to it for a period of time.If the entrepreneur does not have sufficient liquidity to maintain the operation for more than half a year when starting a business, it is best not to start a business lightly.In any case, you must keep enough "life insurance money" on hand for emergencies, otherwise, the chances of success in starting a business will be a little lower.

Generally speaking, larger companies will not hesitate to hire accountants to manage their accounts.This need not be repeated, but many small entrepreneurs ignore this point, especially those who plan to open a small shop, thinking that they know their income and expenses well and do not need to keep any accounts.This idea is definitely wrong.Although a sparrow is small, it has all the internal organs. The daily income and expenditure of a small business must also have clear accounts.In addition to fully controlling the business situation, cost accounting, tax planning, capital management and other items should also be considered.In any case, no matter how small a business is, you need to have an account book. You don't have to hire a special accountant, but you can also consider bookkeeping services or accounting software.

To open a small shop, you need to have an account book Xiao Yang and Xiao Ma have always treasured the accounting books they used to open their shop.It is said to be an accounting book, but it is actually two very ordinary notebooks, and the accounts are not so standardized.It is nothing more than how many tables were sold a day, how much money was spent, etc.But keep it simple, and remember every transaction in the ledger very carefully. Xiao Ma has his own job, stable income, regular working hours, and plenty of spare time. In June 2005, his girlfriend Xiao Yang resigned from the supermarket where she had worked for three years. Xiao Ma and Xiao Yang began to think about ways to make money.Later, under the introduction of a friend, Xiao Ma took a fancy to a certain brand of student desks. "If you open a specialty store in an area where there are more residential areas and schools, the business will definitely not go wrong."

After selecting the project, he began to look for a store without stopping.After several twists and turns, I finally found a small shop on the edge of several neighborhoods. "There is an elementary school and a middle school next to it, so it should be a more ideal store location." After choosing the storefront, Xiao Yang and Xiao Ma began to talk to the landlord. Price. "I had 1,300 yuan at the time, and she had 1,000 yuan in her hand. That's all in total." Xiao Ma said, the two began to think about capital issues after finding a store, and the first start-up capital was only 2,300 yuan. .In the end, the rental price of the store was negotiated at 900 yuan per month, and the landlord asked to pay two months' rent and one month's deposit in one lump sum, totaling 2,700 yuan. "You may not even think of opening a store with 2,300 yuan, but that's what we do."

This is just the beginning, and then there will be some continuous investment.The two of them scraped together a few thousand dollars and started to decorate the store.In order to save money, I asked friends to help me with simple tasks such as painting the house. Five people worked for 10 days. On July 10, 2005, Xiao Yang and Xiao Ma's student table specialty store opened.The account book shows that on the first day of opening, a student desk, a chair, and an eye protection lamp were sold, and the income was 420 yuan. In the months of off-season, the average monthly profit was only 1,000 yuan. Excluding some necessary expenses, there was basically not much left, but we had to stick to it no matter what.Slowly, with the increase in the number of books, they are becoming more and more familiar with this industry, knowing which products are selling well, when is the golden season, and paying attention to studying customer psychology and trying to figure out the way of doing business.Their business is booming day by day, and the scale is also getting bigger and bigger. It is no longer the small shop at the beginning.

In the process of starting a business, money is needed at any time, and you always feel that the money is spent without knowing it. You might as well try to start with bookkeeping. Only by knowing the flow of money and accurately grasping the details of expenditures can you start a business Only those who can understand it can spend it reasonably.And when you start a business, you can use the method of bookkeeping to let yourself know the cost and profit, and regularly check the profit status in a year or a quarter, so as to avoid blind expansion. According to different purposes, account books can be divided into three types: sequential account books, classified account books and reference account books: No matter how small your business is, you must prepare at least these three types of account books for yourself:

A chronological account book, also called a journal, is an account book that registers economic transactions day by day and transaction by transaction according to the chronological order in which economic transactions occur.According to the different recorded content, this kind of journal is divided into ordinary journal and special journal. Ordinary journals, also known as general journals, are journals used to register all economic transactions that occur in an enterprise.In the account, accounting entries are prepared one by one according to the order of economic transactions that occur every day, so this kind of journal is also called entry journal.Units that set up ordinary journals generally do not prepare accounting vouchers to avoid duplication.

Special journals are journals used to record the occurrence of a specific type of economic business.In the account, such economic transactions shall be registered day by day and transaction by transaction according to the order in which they occurred.Businesses that need to set up special journals usually include cash receipts and payments, bank deposit receipts and payments, purchases and sales, etc.The special journals required by our country to be set up by enterprises are cash journals and bank deposit journals. Ledger.Ledger books refer to the account books that classify and register all economic businesses according to general ledger accounts and detailed ledger accounts.The account books that are classified and registered according to the general ledger account are called general ledgers, or general ledger for short;The general ledger is used to reflect the general content of the economic business, while the subsidiary ledger is used to reflect the detailed content of the economic business. The amount of an account in the general ledger is equal to the sum of the amount of the related subsidiary ledger.

Books for inspection.Account books for reference refer to the account books for supplementary registration of some economic transactions that cannot be recorded or are incompletely recorded in the sequential account books and classified account books, and play a supplementary role in the sequential account books and classified account books.Compared with the two main account books, the chronological account book and the classified account book, the account book for reference is an auxiliary account book, which can provide reference materials for operation and management, such as the entrusted processing material register, the leased fixed asset register, etc.

In China's accounting system, fixed assets usually refer to houses, buildings, machinery, machinery, means of transportation, and other equipment, appliances, and tools related to production and operation with a service life of more than one year.It belongs to the means of labor used to change or affect the object of labor in the process of product production, and is the physical form of fixed capital.Fixed assets can play a long-term role in the production process and maintain the original physical form for a long time, but their value is gradually transferred to the product cost along with the production and operation activities of the enterprise, and constitutes an integral part of the product value.

From the perspective of accounting, fixed assets are generally divided into fixed assets for production, fixed assets for non-production, leased out fixed assets, unused fixed assets, unused fixed assets, fixed assets for financial leasing, fixed assets for donations, etc. . The value of fixed assets is gradually transferred to new products according to their own wear and tear. Its wear and tear is divided into two types: tangible wear and intangible wear; the part of fixed assets that is transferred to products due to wear and tear during use A compensation method of value is called depreciation. The calculation methods of depreciation mainly include the average life method, the workload method, the sum of years method, etc.; fixed assets are replaced in material form and compensated in value form (that is, renewal); in addition , and maintenance and repair of fixed assets. At the beginning of an entrepreneurial enterprise, if it is not necessary, it is not necessary to have too many fixed assets.Do you know which is the most profitable company in the world?Coca Cola.But it doesn't have a factory building.Fixed assets begin to depreciate from the date of purchase, which means that fixed assets begin to depreciate as soon as they land.No matter what car you buy, as long as you get the license plate, even if you don't drive a kilometer, you will lose money if you sell it.What entrepreneurs think about every day is value-added, so it is right not to have more fixed assets.If a small entrepreneur buys land and builds factories at the beginning, it is very likely that there will be difficulties in capital turnover in the later process. Excessive spending on decoration of workshops led to bankruptcy Although the term bankruptcy has become commonplace these days, the experience of this factory is still worth thinking about.The factory is positioned to manufacture precision injection molds. It started production in February, got its business license in August, and went bankrupt and transferred in September.The factory covers an area of ​​more than 800 square meters, but the equipment is pitifully small. There are only 3 ordinary milling machines, 2 electric spark machines, 1 wire cutting machine and 1 hand grinder. There is also a 5-ton crane on the ceiling.The entire factory looks so empty, but the decoration is also very cost-effective. The total value of the machine tools is more than 300,000 yuan, but the decoration cost is nearly 200,000 yuan. At the beginning, on the issue of factory building and decoration, friends advised him that a start-up enterprise should try to reduce expenses, reduce the area of ​​the factory building to save rent, and adopt simple decoration to save the few working capital; and the crane , a 5-ton crane is estimated to cost more than 50,000 yuan, why not weld a smaller crane yourself?It should be no problem to hang a few hundred kilograms, only a few thousand yuan is enough, after all, it may not be possible to make such a large mold at the beginning.But the boss thinks that the factory building needs some decoration, otherwise it will be very sad for customers to see the factory.As for why he rented such a large factory building, because he has already contacted many customers when he was working, and he will expand the equipment soon after receiving a few orders.In this way, friends have nothing to say. At the beginning of the factory, because the funds were almost spent, there was not even money to buy fax machines, computers, and trucks, so until it closed down, the factory had been borrowing other people's fax machines.At first, they did have some orders, especially in the first two months, the business was very good, but later, the orders became less and less.Finally, the workers have reached the point where they have no work to do but clean.The boss said helplessly to his friend: "I don't know how this happened. I started to talk about it well, and I cooperated with me when I opened the factory. Why didn't they hear about it once I set up the factory?" By September, the failed entrepreneur had to sell all the equipment in the factory to others. Few of us can have the extraordinary ability of "build customers first, then build factories" like Niu Gensheng, so we have to face many practical problems that must be faced in building factories.Entrepreneurs must learn to save expenses at any time, especially when starting a business, it must be the "winter" of the business. Since they have to face the "winter", they must try their best to prepare enough winter supplies-funds. When you first start a business, in order to avoid difficulties in capital turnover, the best way is to cherish the cash on hand and keep it as much as possible.Do not make too many investment expenditures at the beginning of your business, such as purchasing factories, office buildings, machines, and investing a lot of publicity expenses.The recovery of those cash is usually a relatively long-term effect, so some new entrepreneurs, even though they know that real estate will appreciate in value, would rather rent an office than buy an office building.Many office equipment such as copiers, mobile phones, fax systems, etc. can also be leased to set aside more funds as a business reserve. Working capital refers to the necessary working capital for the purchase of raw materials, fuel, payment of wages and other operating expenses for normal production and operation after the project is put into production. It has the characteristics of short turnover period and changeable form.Having more working capital can reduce the financial risk of the enterprise to a certain extent.Therefore, it is an important part of corporate financial management.If entrepreneurs can master the management methods of major working capital items such as cash, accounts receivable and inventory, they can achieve the purpose of saving and rationally using working capital, accelerating the turnover of working capital, improving utilization efficiency, and reducing risks. It is said that business is becoming more and more difficult, because the general environment for enterprise development is worse than before, and customers have been demanding continuous price cuts. At the same time, the output, price, business, and profits of various companies are constantly declining, while costs are getting higher and higher.Therefore, in the commercial market, we can often see that some companies with good development momentum are suddenly in distress and facing survival difficulties.A large part of them are due to lack of cash flow, resulting in the company having no money to turn around and having to close down. As an entrepreneur, managing a company is actually the same as a housewife. Not only do you have to consider expenses such as rent, water, electricity, and cars, but you also need to keep enough for daily living expenses. This is cash flow.Reasonable control of cash flow is the key to the success of many companies.Likewise, not having sufficient liquid assets can put many companies in trouble.If you want to start a business successfully, you must ensure that you have enough liquid assets on hand to ensure that your capital chain will not be broken. The life and death struggle with cash flow She is a weak woman, but she plans to start a furniture factory.Although she has five years of experience in running a furniture factory, eight years of experience in financial management, and experience and knowledge of the international market, there is no ready-made market, no ready-made suppliers, and no team willing to work with her. You have to start over. She made a budget, thinking that as long as the product is good and the price is good, the old customers and new customers will come to her door, so she resolutely invested and opened her furniture factory. However, she found that starting a business was not as easy as she imagined, because none of her team members knew how to make furniture, let alone develop products.She thought she knew how to produce furniture, because she has shipped tens of thousands of pieces of furniture, but she found that only by clarifying each procedure can one piece of furniture be made, and she does not have this condition. The guests originally said they would come, but they didn't come because she didn't have any products that she could be proud of.At this time, the funds have been spent, and only if the factory survives can it be said to make a decision on the follow-up development strategy.Fortunately, some friends were optimistic about their management philosophy and development plan. In this way, the factory absorbed their investment and was rescued.However, the customers I knew said they wanted to come to the factory, but they didn't come. They probably already made a conclusion about their products: unsatisfactory.So, again, she's in the throes of a cash flow crisis. To break through the siege of cash flow, you must find the market again instead of continuing to find investors.Therefore, she developed their patented product: disassemble the furniture into standard parts for production and sales.Where other factories only sell furniture, they can sell armrests, backrests, seat frames, and more.The purpose of disassembly and assembly is not to sell parts such as armrests or backrests, but to save freight, facilitate transportation and facilitate large furniture to enter small doors and small aisles; and then transform all wood-based panels into solid wood structures.The reason for this change is to ensure excellent environmental protection standards, that is, zero formaldehyde emission; in order to further ensure the cost-effective advantage, they made the furniture frame smooth, compact, beautiful and tidy... However, having a patented product does not mean that there will be a market and sales immediately.Therefore, although cash is very tight, they still took out tens of thousands of yuan to participate in the furniture exhibition.At the exhibition, their products attracted the attention of guests and peers.However, although their products are well-received by the outside world, it usually takes several months or even half a year for customers to launch a project to promote this new product.Therefore, she still cannot extricate herself from the siege of cash flow. In order to show support and encouragement, some guests lent them some money, which relieved their urgent needs.However, the lack of money was still an undisputed fact, and they were still in a life-and-death struggle with cash flow, when she almost decided to sell the property to save the struggling company.Fortunately, some customers who have confidence in their products gave her a life-saving order deposit. Now, the company finally has money to turn around!She could finally breathe a sigh of relief. What happened to the heroine is always repeated over and over again, but others may not be as lucky as her.Once the liquidity is insufficient, no matter how good the project is, it can only be seen as ruined.Therefore, small capital entrepreneurs must pay attention to preparing sufficient cash as working capital, and do not always struggle with cash flow in the process of starting a business. Entrepreneurs should divide all their cash and realizable assets into three parts, and the first part is used for initial investment (including liquidity).The second is used for additional (because there are many unpredictable factors in the business process), you should understand that if the additional is used up, it means that you have no money to invest at all.You can only go so far, don't count on borrowing money.Whether you borrow from a bank or from a friend, a failure can leave you in debt for life.The third is your survival money.Even if you fail, you won't be unable to afford food, and if you can survive, you may make a comeback.If you can survive without borrowing money, you still have strength and face in the eyes of others, and your friends will help you. This appearance is also very important. You know, almost all orders must be paid for the purchase of materials, and then shipped to receive payment.Moreover, your customers or suppliers are not necessarily willing to settle with you on a monthly basis. In addition, many companies have to survive with low profits, which may make your cash flow situation even worse.Therefore, in order not to let yourself fall into a difficult situation, you must not ignore liquidity. Simply put, accounts receivable is the amount owed by customers but not yet paid.As an important part of enterprise capital management, accounts receivable management directly affects the turnover and economic benefits of enterprise working capital. Statistics in 2006 show that the total amount of accounts receivable of Chinese enterprises is about 5.5 trillion yuan, accounting for about 30% of the total assets of enterprises, and more than 60% of the asset value of most small and medium-sized enterprises is accounts receivable.Therefore, it is urgent to establish a risk prevention mechanism for accounts receivable and to resolve the risks of accounts receivable from the source in view of the various risks that may exist in the management of accounts receivable of the enterprise, combined with the actual situation of the enterprise itself. There are two reasons for the high accounts receivable of enterprises: on the one hand, due to fierce market competition, enterprises increase their competitiveness in order to expand sales. These factors often force enterprises to adopt credit sales, that is, to issue credit. Ways to win customers and expand market share, but many companies deliberately default on accounts, and the market credit system is not perfect; on the other hand, it is due to the problems of the companies themselves.From a subjective point of view, Chinese enterprise managers generally only focus on sales, ignoring internal management including accounts receivable management; objectively, they lack both experience and theory in accounts receivable management. The market competition is becoming increasingly fierce. In order to expand sales, enterprises have increased their competitiveness, which is an important reason for the formation of accounts receivable.The credit sale itself is risky, and this credit sale risk is the reason for the formation of the enterprise's account receivable risk.Faced with this kind of risk, entrepreneurs should not only focus on expanding sales, let alone be proud of your generosity, what you need to do is to be alert to these "accounts receivable" becoming your heart disease. Troubled bad debts, bad debts The half-year accounts receivable amount of a listed power generation equipment company reached 678 million yuan, and the accounts receivable turnover rate was only 0.63.The company said: first, the product production cycle is long, and orders have increased significantly, so the current accounts receivable is very high; second, the unit price of the product is high, and arrears of payment have become common; It was signed three years ago or even earlier. Due to factors such as the change of the person in charge, some historical bad debts and bad debts have been caused.The company mainly adopts methods such as legal proceedings and special collection, but the effect is not great, especially the legal proceedings, due to the difficulty of execution, they often win the lawsuit but cannot win the money. Another listed company mainly engaged in electric vacuum devices also complained that due to increasingly fierce product competition, customers usually require longer repayment periods in order to pass on the pressure on liquidity, resulting in a sharp increase in accounts receivable.In this regard, the company often uses sales discounts to urge customers to pay as soon as possible, and assigns assessment goals to sales staff that combine sales with payment collection rates, but the results are not good.For a small amount of arrears, there are customers who compensate in kind such as cars, which is not conducive to improving the company's cash flow. An ST company's explanation for its high accounts receivable is that the historical problems left over from the initial listing restructuring and asset reorganization process led to this situation. If it is to be resolved, it can only be resolved through consultation with the government.In addition to drawing a sufficient amount of bad debt provision for the enterprise itself, the only way to solve it is through debt restructuring, but it is by no means easy. The loss of accounts receivable includes the capital cost of overdue accounts receivable, additional collection expenses, and bad debt losses. These direct losses are more obvious.In addition, there are some indirect losses. For example, although the enterprise can generate more profits when selling on credit, it does not really increase the cash inflow of the enterprise. Instead, the enterprise has to use limited working capital to advance various taxes and fees. Expenses accelerate the cash outflow of enterprises, which is a headache for every enterprise. With regard to the risk of credit sales, I believe that every enterprise has more or less experience and lessons.Credit sales actually mean that the time span for converting a company's products into cash is lengthened, which slows down the company's capital turnover and increases operating costs.The longer the time span, the greater the probability of bad debts, and the greater the risk that the company will not be able to collect the accounts. The longer the time, the greater the risk.Only by formulating effective protection measures in advance can enterprise managers ensure that mistakes and risks are minimized. So, how to reduce the loss of accounts receivable?When a company has a good investment opportunity, but because many accounts receivable cannot be collected in time and there is not enough funds, it can use accounts receivable for financing. There are four main ways: accounts receivable securitization, accounts receivable For the loan of the account, entrust a professional organization to recover or take the form of arbitration or legal proceedings, and stipulate the retention of ownership clause in the contract. As a small entrepreneur, there is not much liquidity in the first place. If you encounter the problem of accounts receivable being in arrears, it will undoubtedly make things worse.If you are not willing to take risks for certain accounts receivable, you have to consider how to transfer the risks. This is why we must have a certain degree of confidence in the credit of customers.Therefore, enterprise credit management is the only basis for the sales department of the enterprise to issue credit to customers. For customers with poor credit, the enterprise should not sell them on credit.When a customer is evaluated as a high-risk level, generally only conduct cash transactions with it, but if a third party is willing to increase the guarantee for it and assume joint and several liabilities, you can also consider using credit sales for it. to recover. As the saying goes, "before the soldiers and horses move, the food and grass go first."When starting a business, you have to raise enough capital and put a lot of effort into it.Some people think that there is a lot of idle money in this society, and it is not difficult to find someone to invest in. As long as there is a way to make money, there is no need to worry about making money.The fact is that there are indeed a lot of idle funds, but very few are willing to invest for you. Japanese entrepreneur Osamu Nakata said: "Anyone who has money can start a business. The key is how to start a business without money." At the beginning of starting a business, from purchasing equipment to building factories, from purchasing raw materials to paying remuneration, you have to continuously invest money in the company.Even if you have the knack for empty-handed wolves, it's inevitable to raise enough capital.Many people think that they are not mediocre, have great ambitions to make a fortune, and have their eyes on the market. When they really want to go to the sea to try their skills, they find that they have no capital and only sigh.There are also some people who, after a rough estimate, have a good chance of winning, they rush to work.After fighting for a long time, the orders that should have been delayed, and the expenses that should not have been rising steadily. After my savings were used up, there was no way to borrow money, so I had to end up sadly.From this point of view, whether the start-up capital and reinforcement financial resources are sufficient or not is the primary factor for the success or failure of a business. If the capital chain is broken, everything will be lost Wang Ping is full of confidence in the induction cooker project he plans to invest in. He believes that this project will definitely bring him a lot of income. In addition, through his relationship, he can easily "settle" a large amount of funds from the bank, so he has great confidence.He looked down on the way his colleagues shy away and made small fuss, and thought that he must not be like them, and he would do a big job if he wanted to.This mentality made him forget the ability of his own business to resist risks.He only wanted to expand the scale of investment, and spread the "stall" as big as possible. He even put forward the slogan "big is better" and connected two production lines.The corporate debt snowballed with his blind investment, but Wang Ping didn't care about it, and didn't feel scared at all.In his view, once the business is up and running, any debt can be paid off.But when his business was up and running, and other people's money was enough, he began to desperately lower prices.Wang Ping's products were produced but could not be sold, and he fell into a crisis. Shi Mou, the owner of a private enterprise, has gradually despised the support from the bank since he set foot in the business world and achieved success by relying on his own strength.When formulating a huge investment plan for a project that is a symbolic significance to the local area, because the project has attracted the attention of people from all walks of life in the local society, Shi's mind became hot, and non-economic factors in his mind prevailed.He threatened to the outside world that he would not borrow a penny from the bank and only rely on his own accumulation to invest in the project.Unfortunately, in the investment operation, although he tried his best, the operating funds were still quickly exhausted.Not only did he refuse to reflect on himself and asked the bank for help, but he still continued to invest the limited funds recovered at hand into the project, causing a large amount of funds to be locked up.Shi's enterprise eventually collapsed due to a broken capital chain, and the project that was symbolic to the local area had to be transferred to others halfway. The reason for Wang Ping's failure was that he set up a large booth from the very beginning, which is a common feature of some entrepreneurs, but they do not know that various crises lie dormant in them, and may erupt if they are not careful.When the economy is growing rapidly, people tend to overspend their confidence, estimate the future too optimistically, and despise risks, thus forming an investment bubble. Once there is a sign of trouble, the bubble bursts instantly, and investors will fall into crisis and difficulties.Shi’s lesson is: No matter how high your ambition is or how courageous you are, don’t give up bank support lightly.Even if you have a lot of money and a prosperous business, don't easily offend the bankers, and try to build a good relationship with the local bankers, because you never know when you will need their support. One of the main reasons why many entrepreneurs fail is that there is a problem with the capital operation of the investment project.Entrepreneurs should consider the investment orientation of the enterprise from the perspective of risk and return balance, choose appropriate investment projects, and control the investment scale within an appropriate range.When making specific investments, funds should be invested in batches and in stages, and one-time investment should be avoided as far as possible, and spare capacity should be reserved just in case.If the environment changes and there is no funds in hand to help when risks occur, it will lead to a total loss. When starting a business, entrepreneurs must have a good plan for raising funds. Otherwise, no matter how good the idea and plan are, if there is no perfect plan for raising funds, they will definitely encounter troubles such as sluggish performance and bankruptcy.Therefore, after choosing an entrepreneurial project, the next most important step is to decide how much investment is required, how much turnover costs are required during the period from the opening to the track, and how much working capital is available. In addition, when planning working capital and calculating initial sales, entrepreneurs must leave sufficient room and strictly control expenditures to avoid poor calculations and failure.Generally speaking, new entrepreneurs are most likely to fail to grasp accounting costs in terms of capital issues, which may lead to financial crises later on.Because many entrepreneurs are full of enthusiasm and full of entrepreneurial ideas, but they are not very rational and well-planned winners.They assume the idea that the company will win, and they tend to underestimate the accounting cost in terms of conception. The result is usually insufficient capital preparation, resulting in poor turnover in business operations.Therefore, entrepreneurs must properly calculate accounting costs, and then do not make major changes at will.Of course, don’t deliberately increase the cost, because it’s good to be able to break even in the early stage of starting a business. If the cost is too high, there will be little chance of making money on the book, and you will lose confidence in starting a business.