Your business won’t survive this crisis. The cash gap is knocking on your door, rat-tat-tat. A profiteer is pulling money out of you. What would you repay with? In kind, as usual. The pattern is clear and painfully familiar. Undermining and running down each other.

It feels like we’re returning to the Soviet Union. I’m burying my business. Everything is cheap, though, and salaries are low. Listen to the new track here CHANNEL No.1 ABOUT MONEY AND BUSINESS – I suggest we talk today about the crisis and how business will survive it.

How do you think business will react to the crisis Russia is now plunging into? – First of all, Russia is plunging into crisis and will keep plunging further. This suffocating and arid atmosphere, the economic winter, and so on,

All this will happen. But then it will be summer, then there will be prosperity. When? In 2025, there will be a slight thaw, and 2027 will see an upward trend. There will be no upward trend until 2027, there will be a small, gradual downward trend

With small steps down sometimes, a small, downward trend and then… The important thing here is not to slip when taking these steps, and at the moment of this sharp fall, to be ready not to fall and not to crash, that’s it. In short, the competition

Will get tougher, all this rivalry, set-ups and so on; the strong will grow stronger by scooping up those who have died, and the weak will die – they have already started dying, but soon they will be dropping like flies. Attention: at the end of this video,

I’ll give you three signs indicating that your business won’t survive this crisis, so be sure to watch it to use them for your own survival. – Still, who are the strong and who are the weak? – The weak are those who are weak economically, they are in the red,

Or they have no profits, and so on, they go from hand to mouth, they face cash gaps and everything else, but there are also those who don’t have cash gaps, who generate profit – they can also be weak in the current situation. Why?

For example, because these companies or these businesses have no one to protect them, so there could well be hostile take-overs and so on. What else can come back of what we’ve already forgotten about but it’s coming back now? The first thing I already said is takeovers.

Unfair competition can also return, which means that people will undermine each other, create conditions for setups, and so on. If you trip your neighbor up, so to speak, or a competitor, you set them up, you take over the market. For example, Gazprom’s security service

Receives irrefutable information that one of the companies supplying to Gazprom are swindlers and all sorts of bad people. Gazprom’s security service checks this contractor and, indeed, they find this out and use their own channels to pass

The information on to the relevant authorities, and this participant is disqualified from tendering. And so a strong company with a good product finds itself in the following situation: a certain person comes to this company and says, “Well, that’s it, it’s all over, let’s buy you out

While you’re still alive, at a bargain price.” The pattern is clear and painfully familiar, look: there’s a set-up, actually, there’s a hidden take-over, there’re white knights who save you, like you’re already dead anyway, let us save you –

Here are all the symptoms of this crisis. The third thing that could come back is mergers and acquisitions, that is, purchases of weak players on normal conditions. This is one of the most profitable options for the one who buys, because the manager of a weak company,

Or a weakened one, may stay in this company, and it won’t be necessary to urgently replace the team and management – it may end badly. And now I see a lot of mergers and acquisitions, and it’s often a matter of discounts

For purchase, but it’s not a predatory discount, it’s a discount proportional to the current situation in the market and so on. If you take over a company – you set it up, you take it over, or you take it by force, simply put,

Will the previous team work for you? The previous manager definitely won’t and so on, and in general, they will do everything so that the business is unable to work: they’ll lure the employees and so on, so it’s better to think 10 times before you decide

To use such black or shady mechanisms. So let’s put it this way: of course, this is a chance for the strong to become even stronger, to consolidate markets, but I warn you: those who consolidate markets, let’s say, incorrectly, without paying a fair price

To other companies, will actually dig themselves a hole, a grave. So, let’s put it this way: I call for continuity as much as possible. After all, it’s okay when a business changes owners, but it’s very bad when it happens through a hostile takeover,

When all these setups and takeovers take place, because this leads to a completely wicked environment of robbery, theft, corruption, cover-ups, and so forth. In fact, this once again forces our Russian economy into the state it’s in, it just can’t take off. Why not?

There are too many non-market mechanisms. And overall, a lot of companies will go bankrupt, they will leave the market, and nobody will even notice that they’re gone because you know how it is: you had been developing your company for 10 years, it was a family company,

You kept adding and thought every day, well, just a little bit more and everything would be fine and you would survive the crisis. Many won’t survive the crisis, many business models will lose their relevance in this economy, especially on the marketplaces. Many people enter a marketplace

And that’s it: no more profits, they keep investing money and think that now everything will be fine. Twice hell it will! Competition on the marketplaces will grow, so it’s okay for a start and for training, and then it’s all useless,

A poultice on a wooden leg, okay? So guys who are already in zeros on the marketplaces – run away, soon you will be in the minus and will hold on to it like it’s business. There’s no business on the marketplaces, okay? None.

Only Bakalchuk makes money on the marketplace business. – Can this sequence of businesses’ bankruptcy cause a chain reaction and intensify this crisis? – Of course it can. People will lose their income, will accept low-paying jobs, some people will just get fired, that is, people’s purchasing power will fall:

They will buy less goods, that’s it. They’ll take out loans first, and then comes the debt noose. Now there’re already more than 10 million people in Russia whose financial solvency in their relations with banks and microfinance institutions is near death: they’re either on the run

Or about to go on the run, that’s one. Point two: highly qualified professionals, specialists of rare trades and so on will prefer a more stable atmosphere. Where is it more stable? In state-run companies. It feels like we’re returning to the Soviet Union, like a company

Of providing employment for the population: relatives, friends, cronies, everybody, let’s get everybody together, everybody’s got a decent paycheck, nobody does much. The result is that labor productivity in these state-owned companies is low, but there are people there who toil away, work hard for ten, get paid pretty well

And feel okay with that. And this state company is provided with resources, contracts and so on. Basically, it’s such an island of stability. I think all of Russia right now is moving into state companies like this, to these islands of stability, but only 10-15% will get into such companies,

Maybe 20% of Russia’s population. Where do the other 80% of the population go? They’ll either develop these islands of stability by themselves, i.e., by starting small businesses, and it might work, but I don’t think so, or get a job on some islands of stability of mid-sized and large commercial companies

Which are also good submarines. And those who didn’t manage to jump onto the island of stability of a state company or into a submarine of the stability of commercial companies and are trying to do something as self-employed – guys, I feel a little sorry, frankly speaking,

And please, if you get these injuries and so forth, please don’t bring the situation to the point where injuries will become fatal. Jump onto one of the islands, we need to stick together now. That’s why all these self-employed people, freelancers and so on,

Look at what’s out there in the freelance market right now. “What are you?” “I’m a freelance businessperson.” I’m telling you that freelance means you’re free, no one damn needs you, okay? – Igor, I suggest we go back a little bit.

Can it be that the protection racket and mobs will get back? You said in the beginning that there could be takeovers, seizures, and whoever doesn’t have support will get into trouble. – Compared to the 90s, the protection racket and mobs are economic now. The thing is, if you’re on a lending rate,

Or you’re up to your ears in debt, and your fate hinges on your bank loan extension, you already have this protection racket. You totally depend on the bank protection: whatever it says, that’s the way it’s going to be. So, in this case there will be no return to those mobs,

Criminals, no. Why? There are more elegant mechanisms, absolutely elegant, and they kind of don’t look like bandit schemes, but in fact they are bandit schemes. What is a loan interest at a rate of 15% per annum? Isn’t that banditry? Can you imagine

How much money is being taken out of business at a 15% annual interest rate? By the way, let me remind you that all that money will be paid by the consumers of these goods and services. So, it actually turns out that the money is pumped

Directly from the consumers’ wallets to these protectors, to these new mobs. These are financial and industrial conglomerates, holdings, they’re mostly financial today, these are banks, you all know that the biggest banks are the biggest beneficiaries of this crisis. That doesn’t mean banks are bad, not at all,

It means this is the way our economy is structured. We’re waiting for another crisis, when these financial groups collect a pile of illiquid assets again and figure out what to do with it. Do you know why illiquid assets died? Why did those assets go bankrupt?

They tried hard, but that 15% per annum was pumped out of them, so they couldn’t take off. As a result, all these frameworks of plants, factories, etc. have now been taken by these banks, and the managers, owners or founders, who created a business

And who had this business taken away from them, what are they doing? They say, “Screw you,” and leave. And now these banks are sitting with these walls – there’s equipment cased somewhere, a plant doesn’t run somewhere – and they don’t know what to do.

That’s how the economy is working these days. All the industry Russia has right now accounts for only 3% of the industry that should be in Russia so that we grow rich and prosperous, can you imagine? And how to launch reindustrialization? Only through long-term money, and it has to be created.

Creating long-term money and financing at a 3% long-money rate for decades, for 15-year periods, is the key task of the economic authorities, the financial authorities, and I would say, for the political authorities as well – everything is intertwined here. Social stability and our future depend on what we’re doing now.

– You’ve already said to a point what the State should do – provide businesses with long-term money at a low interest rate. What else can the State do to keep us out of such a global crisis? – The State can and should raise salaries. Those who’ve traveled

To rich countries must have noticed that the salaries there are very high and incomparable to those in Russia. If salaries in Russia are, for example, $300, $500, or $700, and $700 is a sizeable amount, what is $700, say, in France? There are no salaries like that.

In France, 3,000 euros, probably 4,000-5,000 are the lowest salaries. The thing is, rich countries have a different way of doing things: everything is expensive, and these high prices for groceries, for services and so on impose a lot of requirements for quality, service life, and warranty service

On those who provide these services, and, accordingly, paying for these services, consumers act as agents who insist on this quality, on warranty service and so on. This is the economy of responsible consumption, the economy of responsible supply. What about poor countries? They have a totally irresponsible economy,

But everything is cheap and salaries are low. As a result, nobody gives a damn: we built roads and then fix them in a year. Look, the issue of putting the economy on the footing of responsible consumption and responsible proposition is chronically connected with the fact

Whether we’ll have a different cost of labor. This would immediately impose a labor productivity requirement on employers. State-owned companies will no longer be able to employ cronies, sons in law, sisters, brothers and so on who do nothing. But it breaks the familiar pattern and thus leads to contradictions,

But sooner or later it will have to be done, because when everything is expensive, those who pay for the expensive will sink their teeth into it, and you’ll have to guarantee the quality, and when it’s cheap, they don’t give a damn,

Be glad they threw you a bone, so lick it. That’s why our whole country is like a mutt licking a bone. There are a few hellhounds and guard dogs, and all the others are the kind of mutts licking a bone; a bone is thrown to them and they lick it

And say it’s at least better than sharing a dog’s dinner with Sharik. I don’t like that combination. I would like my children, my grandchildren and myself to live to see the time when things will be different, when the minimum salary in Russia will be 100,000 rubles,

An average salary will be 200,000 rubles, not to mention that it will be typical to encounter a person earning 300-500 thousand rubles, I stress it out. This develops the economy, and here they are – farms, garage cooperatives and so on, because there’s someone to sell to, there’re consumers

Who are ready to pay for farm products rather than for the groceries sold in Magnit stores you weep just having a look at. I took a bite of an apple once, I had a tooth left in that apple bought in Magnit. I don’t know, this whole thing

Basically started in Galitsky’s day, and now it’s just getting worse. By the way, if anyone goes to Magnit sometimes or used to go, let me know what you think of Magnit. – I suggest we move on to specific recommendations. Can we name the signs that indicate

That a business won’t survive the recession? – Yes, there are only three signs of it. Number one: cash deficiency. If your revenues are chronically less than your expenses over a long period of time, it’s clear what’s going to happen. The cash gap is knocking on your door, rat-tat-tat,

Hello, here I am. After a while, you first start pumping some money, pumping more money, but then you run out of money, and here comes this cash gap. Of course, you try to involve an investor, but when the investor comes and sees your cash gap, they say,

“Where are you involving investors? Into the hole?” Into a cash hole, a gap, a black hole? The second: big loans. By ‘big’ I mean this: your business has two basic parameters – revenue and EBITDA, or let’s say profits – and if your debt

Is more than 50% of your annual profit and is already approaching your annual profit, the company is already at risk. If you have 2-annual-profit debt, that’s already a disaster, because your creditor can call off your debt at some point

And demand repayment. What would you repay with? In kind, as usual. That’s how companies go under the hammer for nothing. I recommend that you always keep your debt of no more than half of your annual profit. But if you don’t have an annual profit,

What is your debt recommended by Igor Rybakov? It’s damn zero, okay? A normal situation is when the debt load of a company is negative, that is, inversion, when there is money in the company’s accounts. Do you know how much cash Apple has in its accounts? 55 billion dollars.

That’s a normal situation, because then Apple, patrolling the market and seeing a company that has weakened or something, catches hold of it and buys it for cash. So if you don’t have any money in your accounts, but you have debts to the bank, then you have no money

That are ready for deal and so on, ready for your pulling out a rifle and shooting the lamb, that’s what a hunter does, and not only that: there’s always a profiteer around who’s pulling money out of you. And the third thing I wanted to say today: if your goods or services

Are meant for the middle class. That’s where the major income drawdowns are, that’s where the major reductions and turbulences are and so on. So, it’s urgent either to expand the niche to the economy segment or go to the rich and so on.

This very niche is under tremendous threat right now. These are the three signs that I want you to keep track of now: they’ll give you the first sensitive, erogenous zone to understand what point of stability you’re at. – We’ve talked about the basic signs

That let us know that a business is in danger. Now let’s talk about what to do to make sure that businesses survive the crisis. – Indeed, I’ve given three signs to see if a business is in danger or not. Now let’s look at five signs

Of what to do. So the first thing you can do in a crisis if you have money: buy businesses of these little stumbled guys, who are actually good but who have been leading a riotous, disorderly, reckless way of life betting all on development, etc. Great, they’ve developed

A very good unit for you. Now you catch hold of it and turn on a completely different mode, “Okay guys, now hardcore, good products, quality, efficiency, performance, let’s go.” Great, and these guys right here, these little guys will work for you and get high

Because they’ll end up in a business family, they’ll finally have a leader, a captain, not an autocratic shagger, feudalist, capitalist, landlord, whatever, no: it will be a business family, it will be a conglomerate of independent businesses and so on. So, if there’s money, buy these babies

And make your units out of them. Second: if there’s no money or your reserve wallet is insufficient so far – it’s accumulating but not yet enough – there’s also an option, a great option: increase your efficiency and productivity, because so many things were left unfinished

At a time of rapid growth, expansion and so on. That always happens to everybody, to me as well. So, when I have no money but I’m in a crisis, I always use a crisis for productivity, efficiency, or reorganization: it will increase sustainability and allow to maintain a strong resilience

And even grow organically at the moment of these turbulences. Third, don’t take out loans under any circumstances, don’t take out loans under any circumstances and don’t create a field of logical reasons for not engaging in improvement of productivity and efficiency. If you fill your company with good money,

You’ll turn that money into bad money, that is, this good, fresh money is like fresh water: you put it in a tank with muddy water, and it’s clear that the fresh water will immediately turn into muddy water, kind of slush. So, wait, take on the task of increasing

The efficiency and productivity of your company without pouring in extra money, that’s very important. When you succeed in increasing your efficiency and productivity, financial investors will find you themselves and say, “Take the money at any attractive rate,” okay? To give you an example, I’ll tell you this: TechnoNICOL always gets

10 offers from different banks every month; these banks want TechnoNICOL to take their money. Do you know why? Because TechnoNICOL has a huge net cash position, there are no risks, and banks keep attacking, “Please take it, maybe you have something to get funded, some kind of long-term supply

For an asset portfolio?” and so on. Why is that? They’re sure that TechnoNICOL is a super reliable company, and by the way, that’s an extra reason, too: if you’re building or renovating a house, buy the products and goods made by TechnoNICOL. When you buy other goods or products, hell knows

What their financial situation is like, maybe they’re dying out and saving money. Fourth, get out of the businesses, out of the niches, out of the business niches that have sprung up in the fat days, or in special times. For example, if your business deals

With selling shovels or making shovels during the gold rush, it’s clear that it’s foolish to sit back and keep this plant, shovel factory, or shovel store if everyone who used to look for gold dispersed and don’t look for gold anymore, that’s it.

The fifth point is my favorite: if you see that the business is “yok”, as the Tatars say, or the Bashkirs, if it’s over, bury it. I urge those who are still kicking a dead horse and is trying hard, pumping the money to save the dead horse: guys, the horse is dead,

That’s it, bury it, dig a hole, put the horse in it, cover it with earth, put a stone on it, bury, and say, “I’m burying my business, rest in peace,” and so on, and deal with something else. So, if your business is closed, it’s okay: only abnormal things survive here.

For example, businesses that have functioned for more than 30 years in Russia – Lukoil, TechnoNICOL, I can list them further on – are abnormal, almost paranormal for Russia, you know? And normal businesses here are like this: it worked for a while and then closed down

Because the niche changed, the niche closed. So, all in all, guys, I’ve given you three methods of rapid testing. Do you want to know if it smells of trouble? Here they are, rapid methods. And the five points on what to do during this turbulence

In order not to be the first to die and maybe even manage to increase stability through growing stronger. Use these methods; these are time-proven methods tried by thousands of very successful entrepreneurs, and I’ve tested these methods as well. Look, there was a time when I didn’t use

These methods. I felt bad, really bad, I repeatedly led the situation to the point where I could have died as well. And now I use these methods – the rapid test to see if it smells of trouble, and the methods of quick adjustments during turbulences.

Take advantage of them as well. And I would like us to multiply good things together so that there’s no room left for anything bad. The new album RYBAKOV CODE Listen here

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