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Which Way Do the Small and Medium-sized Security Enterprises Choose?

  • 2020-03-13 08:58:22

The year 2020, with all the obstacles and a severe winter, is the best time to officially explore your potential.

According to the survey from Tsinghua and Beijing university,the small and medium-sized enterprises how to rescue yourself under the influence of epidemic, which the results of 1435 companies in account cash balance can survive time show that 35.96% of the enterprise can maintain a month, 31.92% of the enterprise can keep 2 months, 17.03% of the enterprises can maintain for 3 months, above only 9.27% of companies can maintain 6 months. In terms of the revenue effects under the epidemic, 31.08% of companies estimate resulted in 2020 operating income fell more than 50%, 27.8% expect revenue to fall by 20-50%. A total of 58.88% of companies saw their revenues fall by more than 20% in 2020.

While these may not to do research in security industry, but the novel coronavirus pneumonia outbreak suddenly, added uncertainty about the direction of the market in 2020. For the different social groups, are impacted by the decline of consumer demand, the delay of resumption of work, business restrictions, traffic control and other factors, the operation of some industries and enterprises, especially small, medium and micro enterprises, is greatly affected and even faces the risk of capital chain rupture and closure in a short time. Based on the analysis of experts domestic and overseas, summarize the currently challenges in the security industry:

1.Short of crash

Many projects are stagnant and the capital turnover period is prolonged. At the same time, due to the pressure of government rent, staff salaries and operating costs, cash flow is severely strained in the absence of income

2. The market environment at home and abroad has deteriorated

In the domestic environment, this epidemic will undoubtedly continue the cold winter of capital in 2019. It is difficult for small and medium-sized security enterprises to obtain financing, and generally has the characteristics of limited collateral, low technical degree and low corporate profits. Once capital problems occur, it is difficult to obtain financing from financial institutions. Abroad, the impact of the trade war between China and the United States continues, coupled with the impact of the epidemic, logistics difficulties, delays in construction and other problems, import and export growth is expected to fall sharply in the first quarter of this year.

3. Upstream and agent risk

China is the world's largest exporter of electrical and electronic components, exporting five times as much as Germany and accounting for 30 per cent of global exports, according to the United Nations conference on trade and development (UNCTAD). Separately, "The outbreak of the new coronavirus is likely to tip global manufacturing into recession in the first half of 2020," said Ana Boata, Allianz Research economist, “Electronics and computers are most at risk."

Although the current security industry parts supply is still normal, but the flattening of the channel trend, let many channel business, agents suffering, for example, even if the market demand is strong, many agencies said that they cannot get the goods, manufacturers choose to ship by self. Is a great challenge to the agent.

There are many ways to mitigate the impact of the epidemic, the author thinks that there are the following points that are generally applicable:

1. Reduce cash outflows and lower operating costs. For small and medium-sized enterprises, it is necessary to reduce all unnecessary expenses, such as employee salary reduction, elimination at the end and shareholder financing in the short term. However, in the long run, due to the rise of raw materials and other costs, the operating costs of enterprises may also be further increased in the future.

2. Cut back on uncertain cash-flow inputs, recycle whatever cash you can, and focus on projects where the government has a budget.

3. Business and technological innovation.

4. Build the enterprise's own risk response capacity.

For many small and medium-sized enterprises, all the difficulties will be temporary, the author believes that after the difficulties, the enterprise will have a stronger ability to resist risks. On the way to the future, this is an open proposition, enterprises are born with shortcomings, we need to work hard in the background, can also grow new wings in pain, not only in the long unknown mistakes will slowly die.

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