In the Spring Festival of 2020, the outbreak suddenly caught entrepreneurs off guard.
On January 14, building 12, a start-up company, opened its largest offline doll clamping machine store in Wuhan.
This is called LLJ clamping machine account store has 1000 square meters. Twelve would like to use it as a model store, but after ten days of operation, it was closed on the night of January 24.
Subsequently, more than a dozen stores in Beijing, Shanghai and other seven cities were closed. At present, there are only two companies that are still open. The business hours have been greatly shortened, and all of them will be closed in February.
This company first gained a lot of communication by relying on the expression IP of Changcao Tuanzi, then grew into a cartoon image IP incubation operation company, and its offline business was in trouble.
When the LLJ clamping machine is good, it can account for 60% of the companys revenue. The shutdown has caused great pressure on our cash flow. In addition, we also face the pressure of store rent and labor cost. If the situation doesnt get better all the time, the money on the account will last for two months. Twelve cultural co-founder and coo told the interface news randomly.
Because of the epidemic, there are many enterprises like twelve buildings that are suddenly in trouble. Catering, tourism and offline retail industries are the first ones to bear the brunt, and the industries related to entities are also greatly affected. Under the environment, more industries will be affected gradually.
It can be referred to that in 2003, Chinas GDP growth in the four quarters was 11.1%, 9.1%, 10% and 10% respectively, and the decline trend of growth rate affected by SARS in the second quarter was very obvious. In addition to the catering, tourism and offline retail industries, the survey of SASAC shows that 65.5% of enterprises reported that the SARS epidemic had a negative impact on their production and operation activities in the second quarter of 2003, mainly focusing on enterprise sales, export, project negotiation and construction, among which 61.6% of enterprises believed to have an impact on sales.
On February 2, Zhu Xiaohu, partner of Jinshajiang venture capital, published a circle of friends saying that this year is more severe than SARS, which is a life and death pass for many start-ups.
A number of Internet industry entrepreneurs also told the interface news that the impact of the epidemic on the company is certain, and how big it is still to be seen. Although there is a lot of pressure, they have started to take action and intend to overcome all difficulties and reduce losses until the epidemic is over.
The most anxious Spring Festival
On January 19, after finishing the last interview, Li Xins company took a leave in advance. In 2019, the companys customer volume exceeded his expectation, but there was a shortage of staff, and every employee was very tired. He wanted everyone to take advantage of the Spring Festival to have a rest and continue to work hard in the next year.
Two years ago, Li Xin left the Administration Department of a head Internet company. Relying on the office property and activity site resources accumulated in his work, he founded his own office location consulting company.
2019 is the first year of its official corporate operation. He has won thousands of Internet company customers, and has also done some site selection services for large-scale conferences. Five employees have achieved an annual turnover of 5 million. This year, he plans to recruit a few more people to make the flow 8 million.
At the beginning of January, Li Xin paid attention to the news of the outbreak of pneumonia in Wuhan, but in the current environment, he didnt take it seriously. Soon, with the increasing number of confirmed cases every day and the upgrading of prevention and control measures around the country, friends circle and wechat group are all news of the pneumonia epidemic, and Li Xin is gradually anxious.
The epidemic seemed to put a pause on the fast-moving start-ups, and everything stopped abruptly.
Some of the derivatives produced by the twelve buildings flow to the bookstores and cultural and creative shops such as yanjiyou and 1983 Chaowan, which can account for 40% of the offline revenue of the twelve buildings. February used to be the peak season of sales. Years ago, these stores had completed the order transaction with twelve buildings, and twelve buildings were ready for inventory. Now, all these goods are stranded in the warehouse of twelve buildings, and twelve buildings still have to pay 800000 storage fees for one month.
Another part of the products flow to LLJ clamping machine. After opening a new store in Wuhan years ago, it was estimated that the monthly flow of water during the Spring Festival could reach 30 million to 35 million yuan. In the current situation, the flow of water is basically zero. Not only that, his monthly rent and labor expenditure is about 12 million yuan.
Our company has experienced this industry from scratch and has always been more confident, but this time the cultural and creative industry has been hit very hard. Randomly tell the interface news.
What worries him even more is that the recovery of cultural and creative industries will be more lagged behind compared with the industries just in need such as catering and tourism. Within a month of the outbreak, catering and tourism will resume, but it will take us two months. To make such a judgment at random.
If we say that some entrepreneurs can still find opportunities in the cold winter by looking forward to the industry and innovation in business model, but this outbreak left entrepreneurs with too short response time.
In this longest Spring Festival holiday, entrepreneurs are not interested in rest and entertainment at all. They must immediately think of solutions, at least to make the company last longer.
Before returning to work, chaos and management team had some preliminary ideas. For example, several stores originally planned to open in March and April have been prepared to suspend and postpone their opening; no one will be cut until the last resort, but the management team has considered half pay or two-thirds pay, and will supply everyone after the companys cash flow recovers.
At present, the biggest problem faced by building 12 is rent. Disorderly told the interface news, twelve buildings have been discussing countermeasures with the major shopping malls, but the difficulties faced by the shopping malls are also relatively large, it is difficult to be effective. We hope that the store will delay collecting the rent for some time, but the store would not give a positive reply. There are also some stores that are personal and more difficult to communicate.
On February 3, building 12 was started, and all the staff worked at home - no matter how difficult it was, they could move in a good direction. Randomly tell the interface news, break down the current things to be done one by one, but there is no negative emotion.
Before the start of construction, the management of building 12 told everyone to ensure safety first and then the internal stability of the team through the group of principals. A staff member of building 12 told the interface news that they are working normally at home and colleagues are still discussing problems in the group as before. Everyone is very active.
The biggest hope of chaos is double 11 and double 12. Now the inventory can only be sold online. These two festivals are the outbreak period of online sales. Twelve buildings have begun to try to carry goods live to prepare for the sales in the second half of the year.
After several days of anxiety, Li Xin also calmed herself down by resuming her work. He is glad that he didnt recruit a lot of people last year. The cash on the companys account is enough for the small team to support him for half a year. In the past, many companies had to expand their recruitment and change offices, just waiting for a while. I used to visit potential customers frequently. Now I can use wechat or telephone to understand the needs of potential customers first, and take the initiative in the past when the epidemic happened.
Under the SARS 17 years ago, the experience of entrepreneurial enterprises at that time was similar to that of today. For example, after SARS broke out in Beijing, Ctrip was in a dilemma of operation. At that time, Liang Jianzhang, the founder of Ctrip, on the one hand, stabilized the teams morale, on the other hand, while the business was in a downturn, let all the staff of the call center go to work, grind the process and training. After the epidemic passed, the tourism industry experienced a retaliatory growth, and the business volume in July and August exceeded that before SARS. In December of that year, Ctrip was listed on NASDAQ.
All of a sudden, the epidemic has a negative impact on enterprises, but many entrepreneurs and investors have expressed the same view to interface news: it is not terrible.
At present, a large number of start-ups are facing the pressure of cash flow. Maintaining the cash flow for more than six months is considered to be the key for enterprises to survive.
Take the catering industry which is the most affected as an example. The short-term impact of the epidemic can be divided into many types. The first is the brand restaurant with the new years Eve meal as the main product. Generally, the income of this restaurant will account for half of that years income, so it is greatly affected by the epidemic. The other is the conventional catering brands, such as Haidilao. As long as they can maintain cash flow for more than six months, the impact is generally controllable.
Part of the cost of food and beverage is rent. Now many shopping malls can talk about two months rent free. In addition, raw materials can also be disposed of in various ways. The actual impact is not as great as we thought. The psychological impact is greater, the investors said
Wang Ran, the founder of Yikai capital, put forward more specific suggestions to the start-up companies that originally planned to complete financing in June this year, including: opening up resources and cutting costs, focusing on healthy cash flow and minimum cash flow reserve as a top priority; communicating with shareholders as soon as possible to find emergency measures; using epidemic time, trying to complete the financing preparation work in advance through remote office.
After several days of planning, chaos finally implemented the companys measures to cut costs, and notified all employees in the form of internal mail on the evening of February 4. Among them, the most important one is to pay half salary to the personnel above director level, including Luan Luan and Wang Dong, CEO of twelve buildings. Meanwhile, the company suspended long-term R & D projects, gave priority to short-term online development and sales, and reduced all unnecessary expenses.
Luan said in an internal letter that in the coming months, the focus of building 12 will also be to ensure cash flow and survival of the company.
At the same time, the governments of Beijing, Shanghai and other places have launched a number of measures to solve the difficulties encountered in the production and operation of enterprises. For example, Beijing encourages large-scale commercial buildings, shopping malls and market operators to moderately reduce the rent of small and medium-sized micro tenants during the epidemic period, and each district can give appropriate financial subsidies to leasing enterprises that take measures to reduce the rent. Shanghai Municipal Bureau of human resources and social security released four measures Wednesday to ease the burden on enterprises, including the implementation of the unemployment insurance return policy, the postponement of the adjustment of the social security payment base, the extension of the social insurance payment period, and the implementation of the training subsidy policy.
As long as the epidemic can be controlled within two or three months, all the impacts will be short-term. In this case, if the enterprise keeps its cash flow for six months, the operation will not have much problem. Said the investors.