How to avoid the management of small and medium-sized enterprise investment risk

Introduction: SMEs rely on relationships, opportunities, natural resources, and the era of making money by sloppy operation will be gone, the enterprise to face the market predicament, first of all, to assess the competitive environment and their own existing problems.

? First, the management risk

SMEs are limited by their strength and reputation, it is difficult to attract well-educated and experienced professional management personnel. The rigidity of the management mode of SMEs, the high degree of unity of ownership and management will inevitably bring negative impact on the financial management of enterprises. Due to the laxity of financial management of small and medium-sized enterprises, idle or insufficient funds, slow turnover of accounts receivable, difficulties in recovering funds, and weak control of inventory and other problems. For small and medium-sized high-tech enterprises, due to the patent technology confidentiality program there are certain loopholes, so there is a risk of technological confidentiality.

? Second, the credit risk

The current lack of credit is a common phenomenon, which to some extent affects the image of small and medium-sized enterprises. Coupled with the fact that the information of SMEs is basically internalized and non-transparent, it is difficult for banks, financial institutions and other investors to obtain through general channels, which therefore increases the cost of loans and investment by banks or investors, and at the same time brings difficulties to the financing of SMEs.

Third, the risk of private lending

The most important issue in carrying out private lending and financing is the legality of financing. Once the private financing beyond the legal provisions of the pure fraudulent activities. The protection of property rights of private investment has not been well implemented, the lack of security of private investment, these are financing risks that can not be ignored.

Enterprises facing possible financing risks, neither ignore, nor because there is a risk and do not dare to do something. The positive attitude should be to take effective measures to avoid financing risks or minimize risks and reduce losses.

(a) standardize the investment behavior, rational analysis of the investment environment

With the increasing complexity of China's corporate investment environment, the difficulty of investment decisions and the risks faced greatly increased. Before starting a business, SMEs should carefully study the national policy regulations and policy intentions and their changing trends, make clear the amount of revenue and investment, according to the collection of relevant information, boldly make investment decisions permitted by the policy, and good from the preferential policies to reduce costs and obtain income, learn to use laws and regulations to protect the rights and interests of enterprises, and adapt to market changes and consumer demand. In addition, the fluctuation of interest rates, exchange rates, product price trends, changes in the competitive landscape to effectively anticipate, so as to minimize the impact of environmental uncertainty on investment projects.

(2) Establish risk awareness and risk prevention mechanism

Establishing risk awareness and effective risk prevention mechanism is the prerequisite for coping with risks. Therefore, entrepreneurs in the process of project operation, should gradually establish a perfect risk prevention mechanism and financial information network, the project operation process before, during and after the supervision, timely prediction and prevention of financial risks, the development of risk avoidance programs suitable for the actual situation of the enterprise to control the risk in the smallest possible range to ensure that the realization of the investment project. For example: make full use of the principle of financial leverage to control investment risk, so that enterprises in accordance with market needs to organize production and operation, timely adjustment of product structure, and constantly improve the level of profitability of enterprises, to avoid financial crises due to poor decision-making, and reduce the risk to a minimum.

(3) Reasonably determine the scale of enterprise financing, choose the best financing opportunities, develop the best financing period, reduce the cost of enterprise financing

In the financing decision-making, according to the enterprise's need for funds, the enterprise's own actual conditions and the degree of difficulty in raising funds and the cost of the situation to reasonably determine the scale of enterprise financing. If SMEs can seize the favorable opportunity provided by internal and external changes in financing, it will be easier for them to obtain lower-cost funds. Enterprises should adopt a stable financing method based on a reasonable distinction between the purpose and use of financing.

Formulate the best combination of financing strategies to diversify the financing risk

i. Rational use of private finance. Reasonable use of private finance.

(1) to give private capital into the financial sector 'legal status, from the? Underground? to? Open? to facilitate supervision.

(2) Correctly guide the private capital into formal finance through equity participation or the establishment of funds, small and medium-sized banks and insurance companies.

(3) Recognize the effective operation process and handling methods of private finance from an objective point of view, and prohibit the illegal, socially harmful and civil rights-violating methods and practices.

II. Active attraction of venture capital.

Enterprises should pay attention to the channels of contact with venture capitalists, and take measures to improve the attractiveness of the enterprise according to the concerns of venture capitalists. At the same time, entrepreneurs need to find the right venture capital organizations.

Promoting the reform of small and medium-sized enterprises

We should guide small and medium-sized enterprises to become a market economic entity with clear property rights, standardized operation, and strong internal accumulation ability, i.e., endogenous financing ability.

(1) To follow the principle of honesty and fair competition, and to carry out production and operation and financing activities in accordance with the law.

(2) To establish accounts in accordance with the law, to ensure that the accounting information is true and complete.

(3) To strengthen financial management and improve the financial system.

SMEs should also take the road of high-tech development, and strive to achieve financing from the main self-accumulation and bank loans to the diversified financing changes, economic growth from the rough to intensive changes in industrial positioning from the traditional to scientific and technological changes to fundamentally reverse the problem of financing due to the irrationality of the industrial structure.

Government functions

1. Give full play to the special role of the government in the construction of small and medium-sized enterprise credit guarantee system, to give strong policy support for enterprise financing. The state should encourage all kinds of economic capital to participate in the investment of guarantee companies, increase the number of SME credit guarantee institutions, and gradually form a multi-level SME credit guarantee system consisting of national, regional and community-based guarantee institutions.

2. Strengthen the construction of laws and regulations on credit guarantee for SMEs. Drawing on the successful experience of foreign countries, and guided by China's Law on Promotion of Small and Medium-sized Enterprises and integrating the existing Guarantee Law and Company Law, we should formulate legal norms for the credit guarantee system as soon as possible, build up the basic framework of the credit guarantee system for small and medium-sized enterprises, clarify the basic rules of credit guarantee activities, and provide better services to small and medium-sized enterprises.

3. Establishment and improvement of SME credit re-guarantee system. It is possible to establish a credit insurance organization for SMEs and start credit insurance business for SMEs credit guarantee institutions to ensure the safety and stability of the operation of SMEs credit guarantee institutions and to disperse their business risks.