Chapter 14 Chapter Thirteen Profit, Don’t Do Anything For Nothing

Profit is the fundamental lifeblood of an enterprise. The purpose of business operation is to obtain profit. Only by creating profit can the enterprise maintain development and employees earn something. If there is no profit, even with the best products and the best employees, the best What's the point of having a good social image?It won't be long before the business becomes unviable.Every enterprise has a chance of survival, but the premise is that the enterprise must correctly understand itself, be down-to-earth, and use profits to prove that you are a strong player. The so-called gross profit refers to the balance of commercial and enterprise commodity sales revenue minus the original purchase price of the commodity. Because it has not deducted commodity circulation fees and taxes, it is not a net profit, so it is called gross profit.In China, the price difference between the purchase and sale of industrial products refers to the difference between the ex-factory price and the wholesale price of the same product (the difference between the wholesale price and the retail price is called the wholesale and retail price difference), and the price difference between the purchase and sale of agricultural and sideline products refers to the difference between the same kind of agricultural and sideline products. The difference between the purchase price at the origin and the wholesale or retail price at the origin.If the gross profit is not enough to compensate for circulation costs and taxes, the enterprise will suffer losses.

Gross profit as a percentage of merchandise sales or operating revenue is called gross profit margin.Gross profit margin is generally divided into comprehensive gross profit margin, category gross profit margin and single commodity gross profit margin.The gross profit rate of commodity sales directly reflects the price difference level of all, major categories, and certain commodities operated by the enterprise, and is the basis for calculating the operating results of the enterprise and whether the price setting is reasonable. Gross profit margin is the initial basis for the company's net sales margin. Without a large enough gross margin, profits cannot be formed.Enterprises can analyze the gross profit margin of sales on a regular basis, based on which they can make judgments on the occurrence and ratio of sales revenue and cost of sales.

Calculate gross profit before making a decision Ma Shengye, who wants to start a business, plans to open a bamboo charcoal products store. What will be the benefits?He made a calculation: the initial investment for joining a bamboo charcoal product store is about 20,000 yuan, mainly for the first batch of inventory of 10,000 yuan and the brand usage fee of 3,000 yuan.In addition, the franchisee will carry out the decoration with a unified logo according to the drawings of the headquarters, which is expected to be around 3,000 yuan.If you choose a shop between 10 and 20 square meters, the rent is about 3,000 yuan per month. Calculated by paying three deposits and one deposit, the initial rent is about 9,000 yuan.In this way, the initial capital preparation for investing in a bamboo charcoal products store is about 25,000 yuan.

So what about profits?The results of his investigation show that: in the current operation of the bamboo charcoal products store, the biggest expenditure is the rent, which needs 3,000 yuan per month.Hiring 2 employees, the salary and other benefits are about 1600 yuan per month.Adding the decoration amortization of 250 yuan and other expenses such as taxes, the monthly operating cost will be at least more than 5150 yuan.According to relevant sources, the gross profit of bamboo charcoal products sales is about 66%, so to achieve a break-even, it only needs a monthly turnover of more than 8,583 yuan. On average, a daily turnover of 286 yuan is calculated based on 30 days.Obviously, this goal is not difficult to achieve.

As a result, his "charcoal is the only view" bamboo charcoal products store opened. "You can save money if you start by yourself." This is Ma Shengye's entrepreneurial principle.This is also most fully reflected when he is decorating the shop.For this 20-square-meter store, he has been busy for a whole week in the comparison and selection of various materials in the building materials market.Among the dazzling wall decorations, in order to reflect the style of bamboo culture, Ma Shengye originally planned to choose bamboo curtains as decoration, but the price was 400 yuan per square meter.Therefore, he replaced it with bamboo strip wallpaper with almost the same effect. This kind of wallpaper can buy 5.3 square meters for 70 yuan.Ma Shengye didn't waste the excess wallpaper leftovers, and made them into five chandelier lampshades in the store; when purchasing shelf materials, he chose wood, which is only one-tenth of the price of glass, and through his own design. advantage, there is no waste of a centimeter in the final use. For a discount of 130 yuan, Ma Shengye chose to transport these heavy and inconvenient wood back to the store by himself; even the chic bamboo ornaments in the store are all He made it with dismantled scaffolding bamboo poles, and the total cost was only 5 yuan.After careful calculation, Ma Shengye only spent 2,000 yuan, and an exquisite and simple shop was born.

At the beginning of its opening, "Charcoal for the View" achieved a big business.However, as a relatively novel product, bamboo charcoal products are less known to consumers, which has become the main reason affecting product sales.Therefore, in addition to ensuring the quality of products and establishing a good image of his brand in the minds of consumers with high-quality services, he also promotes bamboo charcoal through various channels to let everyone know about his products and let customers know the functions of bamboo charcoal at a glance. .Now, the monthly turnover of more than 10,000 yuan has exceeded the break-even figure, and his store has survived.

Each industry has its own relatively fixed gross profit margin. Of course, there will be differences due to factors such as geography and scale, but generally there is always a floating range.Before investing in starting a business, the protagonist’s approach in the above case can be used as a reference. You need to understand the gross profit rate, calculate whether you can achieve a break-even balance, and be confident. However, you can also increase your gross profit margin through your own efforts. Let's take a retail store as an example to see how you can increase your gross profit margin.

The first thing to do is to reposition.At present, the concept of service objects in the retail store market is very vague. In fact, who and what services can retail stores provide to retail stores has always been an urgent problem that retail stores need to solve, and so far there is still no answer.Fuzzy positioning leads to unreasonable commodity structure, which leads to low gross profit margin and makes it difficult to make profits.Therefore, retail stores first need to have a clear target market.After the positioning of the target market is clear, targeted adjustments to the product structure can improve the turnover rate of the product, thereby achieving profit growth.

Second, we must expand the service connotation.As the market gradually matures, it has become increasingly difficult to obtain high gross profit margins by selling basic commodities.At this time, we need to take advantage of the network resources of retail stores to expand various services.Most of these services are realized by taking advantage of their own outlets, 24-hour operating time and manpower, so the profit can reach more than 50%.However, there are not many retail companies engaged in such high-paying services to increase gross profit margins.Because the expansion of this value-added service is quite difficult.Many people talk about the various convenient services of 7-11, such as ticket booking, laundry, meal delivery, etc., precisely because they are rare.Practice has proved that the expansion of various services is a difficult process.Only by carefully studying the consumption habits and living habits of customers in the business district can it be possible to develop "win-win" value-added services.Otherwise, hastily imitating the service content of other businesses will only result in a "superficial service phenomenon" - no consumers are willing to enjoy the services of the business again, and the business will naturally be unable to make ends meet.

The last is to develop its own brand and create a unique selling point.If you want everyone to remember you, you must be different from others.Focusing on the entire retail market, the decline in gross profit margin is a common trend, and the development of private brands is the dawn of almost all retail companies.In addition to enhancing the corporate image and achieving the effect of promoting the company, private brands are more essential to improve gross profit margins and corporate competitiveness.The cost of self-owned brand products that eliminates the cost of intermediate links is lower than that of similar products of the same quality, so there is naturally more room for sales prices, and selling at prices equal to or slightly lower than similar products of the same quality can still get more profits.In addition, private label products are developed by the company itself, and there is no horizontal comparison in price. The selling price depends not only on the quality of the product, but also on the popularity and brand value of the retailer.Therefore, when the store brand has a certain popularity, developing its own brand can greatly increase the gross profit margin.

In short, before starting a business, you must understand the gross profit margin, and then judge whether you can get involved in this industry.If you are already in operation, you must be more aware of your gross profit rate. If it is not satisfactory, you must find a way to increase the gross profit rate. After all, profit is the basis for the survival of a company. The gross profit rate is usually higher than the net profit rate. It is not enough to calculate the gross profit rate, but also to calculate whether your net profit rate is higher.Any problem in any link will affect the company's profits.If your business's net profit margin is lower than the industry's general standard, it's time to find a way to solve it. The formula for calculating the net sales rate is: net profit/sales revenue*100%, the standard value set by the enterprise: 0.1.This indicator can reflect the net profit brought by each yuan of sales revenue, indicating the income level of sales revenue.While increasing sales revenue, an enterprise must obtain more net profit accordingly in order to keep the net sales rate unchanged or increase.The sales net profit rate can be decomposed into indicators such as sales gross profit rate, sales tax rate, sales cost rate, and sales period expense rate for analysis.If the company has operating profit, but the net profit before tax is negative, it means that the profit is not enough to pay interest or non-operating expenses.If on the contrary, the operating profit is negative, but the profit and loss of the current period turn into a profit, it means that the company borrows non-business income to offset it, which is not a normal phenomenon. Tap high profits in unpopular industries Coke has a history of more than 100 years. At present, the two major Coke companies have marketing all over the world.What's more special is that the two major Coke companies in different countries will design special commemorative products for their product packaging and appearance according to different themes or sales channels. Many theme designs are either because of high artistic value, or Because it has special historical significance, and each themed product is only sold for a period of time, the stock is limited.Therefore, in Europe, America and China's Hong Kong, Macao, and Taiwan regions, collecting Coke cans, bottles, caps, Coke toys, and other derivatives of Coke has become a fashion trend, and collecting Coke products has also spawned a special industry. At present, the Coke collection business is still a relatively unpopular industry in China.However, in European and American countries and China's Hong Kong, Macao, and Taiwan regions, the industry has developed very maturely.According to the China Coke Collection Association, in Europe, there are nearly 1,000 online Coke collection stores alone, and there are countless invisible people online and offline; in the United States, there are already large companies doing this business. It is reported that one Small and medium-sized companies have an annual turnover of at least US$3 million, and some companies have an annual turnover of US$30 million.In Hong Kong, the business of cola collections has become a market.During an overseas trip, Ah Liang was attracted by the booming cola collection industry abroad, and decided to develop the industry in China after returning to Guangzhou. A Liang has always been interested in collecting interesting objects. In 1996, when A Liang was working as a tour guide and leading a group tour abroad, he found that the packaging of the local sold coke cans was very different from the common cans in China. The patterns and designs on the cans were very interesting and exquisite.This sparked his interest in collecting.Later, when he was a tour guide, wherever he went, he paid special attention to buying Coke cans sold in the local market and bringing them back to Guangzhou. In 2000, when Ah Liang took a group to Hong Kong for a tour, he found that there was a street dedicated to the business of cola collectibles. The left and right sides of the street were full of cola collectibles shops.The business of these stores is booming, and the turnover is booming.He also found out that the daily turnover of a small shop can reach more than 100,000 Hong Kong dollars.This trip opened his eyes, and at the same time touched his idea of ​​developing this market in China. On January 1, 2004, he founded the first cola collection store "Dabao Family". At that time, there was no one in Guangdong or even in China who specialized in the cola collection business.The store is only 10 square meters, and the monthly rent is 2,500 yuan. The Coke collections sold in the store are all saved and collected by A Liang for many years, and there are a total of 500 models. He has long been mentally prepared that he must defend and cultivate a new market. At the beginning, he predicted that the Coke Collection Store would lose money for half a year.Fortunately, the incubation period was shorter than expected.Three months later, Ah Liang made his first sale of Coke collection cans.He sold a "Lenovo Elite Story Can" to a customer at a price of 20 yuan, but when he bought it, the can was only sold at 1.5 to 2 yuan a can in supermarkets and stores. In 2004, A Liang spent a year, through the promotion and cultivation of online specialty stores and physical stores, had 50 fixed VIP customers, and the turnover also increased with the increase of customers. In 2005, his Coke collection had a turnover of 300,000 yuan and a net profit of 100,000 yuan.Anyone who plays cola collection in China knows him; in the domestic cola collection industry, the prices of almost all new products use his pricing as a reference standard.He has become the largest seller of cola collectibles in the country. According to his estimation, the net profit of cola collections is generally 30%, but for some slightly "difficult" collections, the net profit can reach 200% or 300%.This is indeed a business with low investment costs and high profits.Generally speaking, when new cola products are put on the market, their selling price is very low, 1.5 to 2 yuan per can, and only 1 to 1.5 yuan for bottled cola products.Purchase these new cola products when they are hot. When these cola products are out of stock, or when new packaging products are no longer launched, the price of cola collections will start to rise. The longer the time, the higher the value of cola collections. , especially some coke cans with big themes.And in this business, you may only waste the space for displaying Coke collections, but you will not lose money. When products with old packaging and old themed packaging are no longer launched, you will not sell them below the cost price no matter what. It's just that you may not earn much.It is reported that the most valuable Coke can in the world is the Coca-Cola can that former Soviet astronauts drank when they went into space. The market price is 40,000 yuan, and there are only 4 cans in the world. What is the concept of 30% net profit?You can look at the ranking of net interest rates in various industries: finance and insurance 16.15%; real estate 13.28%; social services 11.13%; transportation and warehousing 10.62%; public utilities 10.52%.Even the net interest rate of the financial and insurance industry, which ranks first, is only half of it.So for the protagonist, as long as he can make this unpopular business sound and impressive, he doesn't have to worry about profits at all. For those of us who start small businesses with small sums, it is better to listen to the words of Zhu Jun, the boss of Ninetowns: "Ninetowns' strategy has always been not to pursue big wins, but to ensure no losses, 'to make profits and not to take risks'." Then pursue high net profit. In our work and life, we often use some indicators to measure the performance of enterprises. People talk about the industry leader, market share leader, sales leader, etc. In fact, the indicator is completed, and it does not necessarily mean profit. From the perspective of indicators, the company is thriving, but behind the prosperity is a faint worry-the profit is not high, and it has stepped into a vicious circle with long indicators and tight days. The goal of most entrepreneurs when starting a business is the accumulation of original capital, and all behaviors or activities that can bring profits to the enterprise are what entrepreneurs pursue.We often hope to beat our opponents in terms of quantity, but we forget that selling more does not necessarily make more money. Small profits will certainly sell more, but it does not necessarily make more profits.Moreover, small profits but quick turnover can only be used in the case of protracted wars, and are not suitable for short-term operations.If a small business wants to survive in a short period of time, it must be supported by profits, otherwise it is very likely that it will not be able to survive the cold winter stage of starting a business. How long can I last without money Company C is a local brand-name product that is good at producing mid-to-low-end wine products. However, in recent years, with the intense competition in the liquor market and the rising prices of upstream raw materials, especially related shipping costs, the market operating space and corporate profits It has been "shrinking". In 2005, among the nearly 50 markets developed by the company, 80% were not profitable, and even 50% of the markets were "losing money and making money". The company has really entered a "bottleneck" period and confusion period of market expansion. .The market has been developed, but there is no profit in operation. Is there any value in such a market?How long can such a profitless market "big banner" last? Such mistakes are not only made by people who have just started a business, even big companies like BMW are no exception.In the contest with competitors, although BMW won sales, it lost profits. In 2006, BMW's global sales increased by 3.5%, reaching 1.37 million vehicles. According to the BMW Group's plan, by 2010, the BMW Group's sales volume will reach 1.6 million vehicles, which is almost twice that of the BMW Group in 2000, but its profits did not grow in tandem. In 2006, the BMW Group's operating profit fell by 0.8% to US$4.1 billion, while the operating profit rate dropped from 6.7% in 2005 to 6.4%. The BMW Group's operating profit rate was as high as 9% in 2000. The same is true for Chery Automobile.Its sales increased by nearly 100,000 units to 180,000 units, ranking sixth in the industry, and with 18,000 units exported, it has been the champion of Chinese car exports for four consecutive years.But the profit dropped from 188 million yuan in 2004 to 95 million yuan in 2005, and the profit per bicycle was only more than 500 yuan.According to analysis, this is because the mini-car QQ accounted for more than 60% of Chery's sales, and the mini-car is precisely the least profitable model.The profitability of Chery's dealers was not good in 2005, which has become a hidden worry restricting Chery's development in the future.Therefore, it is too early to be happy when you see more sales, and the last word is to earn more. One of the difficulties in market development is that there are sales but no profits, just like the C wine company mentioned in the case.There are three ways to measure the performance and value of a market: one is growth rate; the other is profitability; the third is asset efficiency.Therefore, from this perspective, the market growth rate alone is not enough.According to the law of market development stages, a market with certain profitability and healthy development of asset efficiency is an excellent and effective market. There is no doubt that enterprises should firmly grasp the lifeline of profit.So, how to do it? Adjust product structure.The reason why many companies' products do not perform well in the market is actually related to the company's market positioning of the products. When many companies enter the market, in order to quickly occupy the market, they often bombard them with low-end products. By the time they occupy the market, the market has become "addicted" to these products and is very dependent on them and cannot do without them.In this case, the market is often relatively fragile. Once a strong enemy invades, because the product has no room to operate, it may be "severely hit" soon.The way to improve is to introduce mid-to-high-end products at the right time, such as strategic offensive products, profit products, image products, etc., and enhance the market's ability to resist risks by adjusting the product structure. Scale the costs.In the pre-development and start-up of blank markets, profit is often not the first priority. Therefore, it is possible to use the good momentum of early-stage development of blank markets to build momentum and set off a sales climax. To achieve the purpose of cost sharing on a scale, although the goal of maximizing profits cannot be achieved in the end, by reducing the expense ratio, it can also play a role in increasing efficiency. Sub-channel, sub-item operation.Sometimes, it is difficult to persuade a customer who makes low-end products to distribute mid-to-high-end products. Therefore, in this case, adopting the method of operating the market by channel and item, that is, by opening up a second battlefield, not only has It is conducive to the intensive cultivation of the market, and can also make up for the inherent shortcomings of the market. It is an effective means to enhance the profitability of the market and improve asset efficiency.We can appreciate some of these mysteries from the typical cases in which many big brands and large enterprises have successfully operated the market by channels and items in recent years. For entrepreneurs with small capital, their own financial resources are limited. If the tax burden is too heavy, the financial situation will be even worse.Therefore, it is an inevitable choice for many entrepreneurs to reduce the tax burden through tax planning.When taxpayers face a heavy tax burden, and the current tax legal system cannot be changed in a short period of time, taxpayers can only carry out tax planning to achieve reasonable tax avoidance.Of course, your tax avoidance must be legal, there is no doubt about it.In other words, entrepreneurs must take appropriate measures to avoid tax obligations and reduce tax expenditures on the premise of respecting tax laws and paying taxes according to law. Legal and reasonable tax avoidance is qualitatively different from tax evasion, tax evasion, and cheating to take advantage of loopholes in the tax law. It is a normal and legal activity.It is not only a matter of the financial department, but also requires the cooperation of various departments such as marketing and business, starting from various aspects such as contract signing and payment receipt and payment.It requires enterprises to abide by the tax law and pay taxes according to the law, based on the detailed study of laws and taxes, to flexibly use different tax rates and different tax payment methods stipulated in the existing tax laws, so that more profits can be created by enterprises. Legally stay in business.Like a defense lawyer in court, it protects the legitimate rights and interests of the parties to the greatest extent within the scope of the law.Tax avoidance is legal and an economic right that companies should have. The trend of international competition among enterprises also makes tax planning more significant.Now, Chinese and foreign companies are competing in an open and fair environment, and the key to success lies in whether they can reduce their costs and increase their profits.The financial mechanism of foreign enterprises is relatively mature and stable, and various tax planning methods can be used to reduce the overall tax burden of the enterprise, which is equivalent to increasing the profit level.In the current increasingly fierce market competition, it is already quite difficult for companies to expand their market share through "open source", that is, marketing means. If Chinese companies want to compete with foreign companies on the same stage, they should focus on "throttling expenditure". That is, the control of internal financial costs of the enterprise.As a large part of the financial cost of tax expenditure, how to control it through tax planning has become quite critical for enterprises. From the perspective of the financial mechanism of modern enterprises, the tax expenditure as the external cost of enterprises should be controlled even more.The costs of a business can be divided into two categories: internal costs and external costs.Various period expenses and salary expenditures of an enterprise are internal costs, while tax expenditures are external costs of an enterprise.At present, many enterprises have a wrong idea that to control costs is to control internal costs, while external taxation is regarded as unavoidable and not controlled.In fact, it is not the case. Enterprises have already strictly controlled internal costs, and excessive compression of internal costs may cause adverse consequences such as damage to employees' enthusiasm and affect the development of enterprises.Therefore, while controlling internal costs, efforts should be made to save external costs of the enterprise, so that internal costs and external costs can be combined and compressed together. Can you not pay taxes and not break the law? A newly established management consulting company with 10 employees, if the estimated annual sales volume is 10 million yuan, as the financial manager of this company, can you prevent the company from paying a penny of tax without violating the tax law?As long as you are familiar with tax laws and good at planning, this can be done. If you study the tax law carefully, there are at least two tax policies that can save this company from paying 800,000 yuan in taxes.First, the state stipulates: "For newly established service enterprises, if 30% of the laid-off workers are laid off, they can be exempted from business tax and income tax for three years." This policy seems very simple, but it is very practical.Some company leaders may say: "What do I arrange for laid-off and unemployed people?" In fact, this is a conceptual obstacle.This management consulting company can take advantage of this policy and arrange two laid-off female workers to work in the canteen, and then arrange one unemployed or laid-off worker to drive for the leader. Several limousines. Also, there is a file that can be used. In 2004, the tax policy stipulated: "If the proportion of retired non-commissioned officers reached 30% by private companies established, they can be exempted from business tax and income tax for three years." This company can hire a retired male soldier to drive and two female soldiers to be secretaries. And operators, they are not the core management personnel of the company and have little impact on the company's business, but they can save a lot of tax expenses for the company. VAT can also be avoided reasonably There is an automation equipment manufacturer in Shenzhen. It has developed a set of software and configured it on the equipment. The price of the product is 30% higher than that of similar products.The profit has increased, but the company has also encountered problems, that is, the product price is high, and the purchased materials are not many, which makes the value-added tax burden of this company very heavy.The CEO of the company and the financial personnel discussed it repeatedly, but they couldn't come up with a good solution.Value-added tax is a "head-off" tax. Once something goes wrong, the punishment is very severe, and few companies dare to make a fuss about it. Tax experts found after researching this company that this software is a high value-added product, and the high price is mainly due to this self-developed software.So he suggested that the company split up and set up a software company, sell the software to this company and then install it on the equipment.In this way, during the transaction process, the purchased software can deduct 17% of the value-added tax, and the software company pays 3% of the tax separately. In this way, the company neither violates the tax law, but also deducts 14% of the value-added tax invisibly. . There are many taxes that are completely avoidable as long as you are well versed in tax law, and you don't have to worry about breaking the law.There are many tax avoidance methods that are very common in the corporate world nowadays, and you can learn from them.If you are a small investor, if you do not have the ability to hire a professional tax officer, you can study the tax law yourself. As long as you pay attention, many clauses can be used by you. Below we introduce some tax avoidance methods commonly used by small and medium-sized entrepreneurs: Sign up to the "tax haven".All production, management, service-oriented enterprises and enterprises engaged in high-tech development established in special economic zones, coastal economic development zones, old urban areas of cities where special economic zones and economic-technical development zones are located, as well as high-tech industrial zones and bonded areas recognized by the state, can enjoy a greater degree of tax incentives.Therefore, when you choose an investment location, you can purposely choose the above-mentioned specific areas for investment and production operations, so as to enjoy more tax incentives. into special industries.For example, tax exemption regulations for the service industry: parenting services provided by kindergartens, nursing homes, and welfare institutions for the disabled are exempt from business tax; marriage introduction, funeral services are exempt from business tax; medical services provided by hospitals, clinics and other medical institutions are exempt from business tax Wait. Do the "overhead expenses" article.Enterprises can increase the withdrawal ratio of bad debt reserves. Bad debt reserves are included in management expenses, which will reduce the profits of the year and pay less income tax.You can also shorten the depreciation period as much as possible, so that the depreciation amount will increase, the profit will decrease, and the income tax will be paid less.In addition, the depreciation methods used are different, and the amount of depreciation accrued varies greatly, which will eventually affect the amount of income tax. Reasonable increase in employee benefits.In the process of production and operation, it may be considered to appropriately increase the wages of employees within the scope of not exceeding taxable wages, to provide medical insurance for employees, to establish general funds such as employee pension funds, unemployment insurance funds, and employee education funds, and to carry out enterprise property insurance and transportation. insurance etc.These expenses can be listed in the cost, and at the same time can help private owners mobilize the enthusiasm of employees, reduce tax burdens, reduce operating risks and welfare burdens, and win good comprehensive benefits with lower costs. Do enough "sales settlement" articles.Choose a different sales settlement method to delay the time of revenue recognition.Enterprises should delay the time of revenue recognition as much as possible according to their actual situation.For example, an electrical appliance sales company sold 10,000 air conditioners of various types in the current month, with a total income of about 25 million yuan. According to the 17% output tax, it has to pay more than 4.25 million yuan in taxes, but the company will soon purchase tax receipts next month. Carried forward to this month's deduction.Due to the time value of money, deferring tax payments can have unexpected tax-saving effects for businesses. If you choose to start a business in partnership, the personal relationship between the partners is very important.There should be a tacit understanding and harmony between the partners, because any project is the result of collective efforts.However, in the process of business operation, everyone may be able to reach a consensus on many issues, work together, and trust each other, but when it comes to profit distribution, the situation is more complicated. Today, it is a common phenomenon that the turnover rate of entrepreneurial teams remains high. One of the important reasons is that the team did not determine a clear profit distribution plan at the beginning of its establishment. With the development of the enterprise, the profit increases. A dispute led to the dissolution of the entrepreneurial team.This situation is very common in private enterprises and small and medium-sized enterprises. The entrepreneurial teams of many small and medium-sized private enterprises either did not consider it in the early stage of development, or did not clearly propose a specific profit distribution plan for the future because of face. When the scale expanded, disputes over how to distribute profits began, which ultimately hurt both feelings and the company. Profit sharing is disputed, and friends turn against each other Xiao Li has been engaged in wine sales for many years, and has rich sales experience and relatively stable marketing channels and customer resources.Later, he and his friend Xiao Zhang registered and established a wine sales company.The registered capital of the company is 30,000 yuan, of which Xiao Li contributed 10,000 yuan and Xiao Zhang contributed 20,000 yuan.With the efforts of the two, the company's benefits are very good, but there is a disagreement when it comes to year-end dividends.Xiao Zhang believes that the sales of the company's products mainly rely on his original sales experience and channels, and requires both parties to share equally.However, Xiao Li insisted on sharing according to their respective investment ratios.The two former good friends couldn't stop arguing about this, so they had to seek help from a lawyer. The lawyer told them that the "Company Law" promulgated in 1993 stipulates that the distribution of profits by shareholders in the company shall be subject to mandatory regulations.That is: as long as the shareholders have determined their respective capital contribution ratios in the company, they must be divided according to this ratio, and there is no other way.Therefore, according to the provisions of the old "Company Law", if Xiao Zhang wants to split the shares in half, he can only add another 10,000 yuan in investment, otherwise his request will not be supported. However, the new "Company Law" that came into effect on January 1, 2006 stipulates: "Shareholders receive dividends in proportion to their paid-in capital contribution; however, all shareholders agree not to distribute dividends in proportion to their capital contribution." The proportion of capital contribution determines the proportion of profit sharing as a general principle, and the new profit distribution method determined by consensus among all shareholders is an exception, and the exception applies first.According to the new "Company Law", if Xiao Li can reach an agreement with Xiao Zhang, he can enjoy 50% of the company's profit share.If the negotiation fails, Xiao Li can only get profit sharing according to the proportion of capital contribution. It seems that the "Company Law" can't solve their problems, and the main thing is to negotiate with them.The result of the final dispute between the two was that Xiao Li got half of the profit share, but also left the company, and the two former friends turned against each other. When several people start a business in partnership, each invests in different funds, technologies, etc., so profit sharing becomes very tricky.No matter what kind of distribution method you plan to adopt, you can be sure that the distribution ratio must be determined in advance, so as not to make friends even if you start a dispute about it. In terms of income distribution, it is recommended to implement complete egalitarianism among general partners.As stated earlier, each of our projects is the result of a collective effort.Maybe a certain project has the main person in charge, but there will be other partners involved in many aspects.When encountering a project, everyone will seek other people's opinions and suggestions.Our partners have their own strengths and can help a project from different aspects.In many cases, a simple evaluation may contain very valuable information, and its value cannot be measured by specific figures, so it is difficult to say who has contributed more and who has contributed less. Therefore, considering that the overall profitability in the early stage is not strong, and the current situation that the company does not need much funds for development, we suggest that maybe you can adopt the Liangshan management model: drink in big bowls, eat meat in large pieces, divide gold and silver on scales, and use all funds It is used to stabilize people's hearts and consolidate team development, and the remaining profits are shared equally by the team.This point has the experience of senior Niu Gensheng. When he was in Yili, he always shared the company’s dividends with everyone. Later, when Mengniu was first established, so many veterans who had fought with him went to the past. This is also the case. Passion has made Mengniu what it is today.Its rapid development and large market share can be called a miracle in China.