Chapter 2 Six elements of enterprise risk prevention

An enterprise is a synthesis of various social relationships. The value of an enterprise determines the mode and result of its behavior in dealing with social relations. If the enterprise does not have a good attitude and cannot handle problems correctly, it will accumulate a lot of risks in the process of operation. How to prevent it Handling is a problem that every entrepreneur should pay attention to. If private enterprises want to continue to develop, they must solve their own problems, dare to face their own shortcomings, and only by continuous improvement can they continue to improve.There are adventurous factors in the operation of enterprises. If the funds are very strong, enterprises will generally not fail. However, enterprises will always lack funds. Therefore, maintaining short-term profits and long-term development and how to use limited resources are key issues.There must be a reasonable ratio between the long-term business and the short-term risk of the enterprise. The proportion of long-term business must reach more than 70%, and 30% of the funds must be allocated for risky attempts. If this ratio is wrong, the enterprise will be difficult to sustain develop.

The speed of enterprise development must be scientifically controlled. When the environment is good, it should be faster, and when the environment is bad, it should be slower.As the person in charge of an enterprise, you must understand your own financial background, debt capacity, talent status, etc. If you do not have a clear understanding of these aspects and just want to continuously accelerate the speed of development, you may crash.80% of the problems of our enterprise are not caused by too slow development but by too fast development.Solving the problem of speed and slowness solves the problem of life and death.Between advancing and retreating, advancing is easier and retreating is more difficult. Chinese people often say "willing to give up", but "giving up" is easier and "gaining" is more difficult.

Many companies are implementing diversified operations, which is not wrong in itself. The question is whether the enterprises are good at carrying out diversified operations?Do you have the ability to run a diverse company?The key to being a diverse company is to be better than others.For example, Fuxing Group, although we started from a very small scale when we entered the real estate industry, we have focused on our proprietary brands over the years and have made great progress. Therefore, now that we can be listed in Hong Kong, international capital He also agrees with the revival, which proves that the revival has achieved a virtuous circle economically.If an enterprise wants to make diversified investments, it must have a diversified structure and cultural capabilities of a diversified enterprise, and it needs to be done very professionally.

If an enterprise wants to develop, it must plant the land well while staking the land.If the private economy stays at the stage of staking land for a long time and does not have the ability to plant the land well, then this land will have to be handed over sooner or later.Therefore, we must cultivate the ability to intensively cultivate every piece of land we have.At this point, Fuxing Group is still proud. When we first started Nangang, the production capacity was only 2 million, and they were all low-to-medium steel products. Over the years, we have improved the types of products and expanded the scale. Nangang’s competitiveness Slowly reflected, with better profitability.

Some enterprises will have an illusion that they are large enough that even if problems arise, the government will come forward to rescue them.In fact, it is not the case. From the first day of running a business, entrepreneurs must be responsible for every decision they make, and every decision will be reflected in business results.Everything we do is to create value for society, and every decision we make is not simply a matter of piling up resources. The relationship between the enterprise and the government should not be too soft or too hard. It is necessary to maintain good communication with the government and not use illegal means to maintain an overly close relationship.Without the support of the government, it is impossible for an enterprise to develop well. However, if illegal means are used in exchange for a special relationship with the government, the enterprise will be very fragile, and it will fail as it operates.

The interests of enterprises and the interests of the government are different. Enterprises care about how to make profits, while the government considers whether the development of enterprises conforms to the development of society.A company in the United States originally wanted to build an 18-story building. After the government leaders came to inspect it, they put forward higher requirements, so the planning of the building gradually changed to 28-story, 38-story...finally determined The plan is 78 floors.Originally, this company would not die if it built an 18-story building, but it would definitely die if it built a 78-story building.This cannot be blamed on the leadership of the government, but on the fact that the operator of this enterprise did not grasp the scale of decision-making.

When we get the first bank loan, we must have principles, we can disclose any information, and we can be transparent and fair.Enterprises must base themselves on their own cash flow, and make profitable cash flow and profit with cash flow. This is the foundation of our survival.At the same time, it is necessary to develop sources of funds through multiple channels, and blindly relying on banks is also risky, especially because China's banking system is not yet sound, and most of the funds are short-term financing. How to increase capital financing and equity financing is a question of value for enterprises, because it involves benefit sharing, and only when they are willing to share with others can they get more help.The five shareholders of Fuxing Group have shared weal and woe through thirteen years of ups and downs.Among shareholders, honest communication is the most important thing, and mutual suspicion should not be allowed.If the five of us split up several times in the past 13 years, each split will cause the company to stagnate, and the current scale and achievements of Fuxing will not be achieved. Therefore, the support of shareholders is very important.In addition to frank communication, enterprises should establish a good corporate structure, put their words on the table, clarify interests, rights and responsibilities, and devote more time and energy to management and operations.

Many risks of enterprises are caused by failure to deal with the problems of professional managers.When an enterprise develops to a certain scale, it will definitely hire professional managers. While fully trusting professional managers, it must also establish a corresponding supervision mechanism. If any of the two is missing, problems will arise. The fundamental value of an enterprise is not only to create value for shareholders and society, but also to create value for customers and employees.Enterprises should treat their employees kindly, so that employees can get satisfactory remuneration while working hard. I don’t want to hear the employees of Fuxing say: “I’m here to contribute to the company, and I don’t care about the remuneration.” This is wrong, and the employees should say: “ I have worked hard, and I want to be rewarded by the company!" Make employees willing to work hard for the revival.I also don't want to increase efficiency by firing employees. As an entrepreneur, I have to take on the responsibility of educating people, handle the relationship with employees well, and let their value be brought into full play.

At the heart of a business are entrepreneurs and their values.As an enterprise, as long as you establish correct values ​​and handle the relationship between the enterprise and all aspects, you can prevent enterprise risks.