2003: Starting with Foreign Trade

Chapter 104 Factory Construction Planning
The adult world can be incredibly complex, but it can also be remarkably simple.

Without compromising one's own interests, a drink or a karaoke session can make a friend.

Upon arriving at the venue, Zhang Mingcan immediately put his arm around Tan Jincheng's shoulder. In addition to Zhang Mingcan, Zhang Haiping also invited several other small business owners to introduce Tan Jincheng to his circle of friends.

Interestingly, there aren't many people in the clothing business; most are like Zhang Mingcan, who are in the auto parts, mold, or electronics business.

Whether Zhang Haiping did it intentionally or unintentionally is unknown, but it is a good thing for Tan Jincheng.

Tan Jincheng is in the clothing industry to make quick money and has no intention of developing it deeply. In the future, he will be dealing more with factory owners like Zhang Mingcan, and it would be good to get to know more people like that.

Once you're in a place like this, there's no need to pretend to be a saint. Life is short, so aside from your final stand, relax however you like.

"I haven't been a big brother for many years, and I don't like the cold edge of the bed."

Zhang Mingcan's roar echoed throughout the private room, and with his tall stature, he truly resembled the image of a motorcycle enthusiast.

Tan Jincheng, whose skillful movements caught the attention of Zhang Mingcan and the others, could probably only reveal his age gap when singing karaoke, as he sang all sorts of incoherent nonsense.

"Quickly use nunchucks, hum hum ha hee." Listen to this, what kind of song is this?

After partying until late at night and drinking a lot of fake alcohol provided by the KTV, Tan Jincheng was too lazy to go back, so he found a hotel nearby to stay in. The next morning, he went back, took a shower, and changed his clothes.

When Tan Jincheng arrived at Jinpeng Trading, it was already past 10 a.m.

"Buy me lunch, and we'll go to the factory together this afternoon."

"okay."

Back in his office, Tan Jincheng began writing a business plan, thinking about the construction plan for the electric two-wheeler factory and the issue of capital investment.

Electric vehicles are subject to a production license system. All that is needed is to apply for a production license from the Administration for Industry and Commerce (or the Bureau of Quality and Technical Supervision) to start production. The entry barrier is not high. All that is required is to rent a factory, a production line, a few employees, and purchase some supporting equipment to begin assembly and production.

The entire production process is actually not complicated, and employees can easily get started operating it after a short period of training.

Based on Tan Jincheng's current understanding and the information collected through research companies, an investment of 50 RMB can obtain a production line with a daily production capacity of 100 units. This is the approximate investment cost.

Secondly, there are the fixed investments in factory buildings and employees. The factory area cannot be too small, so it can only be located far from the city center. I asked Zhang Mingcan last night, and his factory building has a total area of ​​about 1000 square meters, with a monthly rent of about 15,000 yuan, which is acceptable.

Another point is the wages of assembly workers. I've also looked into this. The wages of assembly workers are not as exaggerated as those of mold makers. An average of 3000 to 3500 yuan per month is considered a relatively high income.

The equipment is a one-time investment, and apart from maintenance, it doesn't cost too much money afterward. Rent and employee salaries are fixed monthly expenses, which are the biggest costs, adding up to at least 400,000 to 500,000 yuan each month.

In addition, there are supporting procurement and other expenses. A budget of around 100 million yuan can support a small electric vehicle factory with a monthly output of about 3000 units.

As for some small electric motor workshops hidden in the city, the investment cost is even lower. First of all, they do not have professional assembly lines. They can start by gathering a few relatives and friends or even a family. They purchase refurbished parts for their products, which are very cheap.

In terms of sales, we rely on local production and sales. According to a car parts factory owner last night, it only takes about 20 yuan to start such a small workshop.

Tan Jincheng's goal is not to run a small workshop like this. A monthly production capacity of 3000 units and an annual output of more than 3 units is the bottom line. Only in this way can the production scale be expanded rapidly. With the current high profit margin, if he is going to do something, he will do something big.

However, in that case, the fixed monthly investment would start at 100 million yuan, and the annual investment would be at least 1200 million yuan. Where would this money come from?

"Let's not think about that too much for now, let's get around 200 million in start-up capital first."

Let's just do it. If we can't get 2000 million, we can scrape together 200 million in start-up capital. At worst, it'll just be that 200 million goes down the drain.

Actually, production isn't the problem; the problem is how to position the product and how to sell it.

If you produce 3000 vehicles a month, you need to sell them to recoup your investment and continue operating. The first issue is product positioning. Currently, the leader in the electric vehicle market is Xinri, which mainly develops luxury electric vehicles.

It wouldn't work for Xiaokalam to directly compete with the leader right away, so the best option is to bypass the luxury electric vehicle market developed by Xinri and focus on the simple electric vehicle market, emphasizing its compact size, light weight, and cost-effectiveness.

Lei Jun did exactly that in the mobile phone business: he focused on cost-effectiveness from the start, leaving competitors bewildered. Only in this way could he quickly gain a foothold.

Secondly, we can't achieve the same level of distribution channels as Lei Jun. Lei Jun, the chosen one, is even more of a protagonist than the main character in an online novel. He was already financially independent when he started making mobile phones and could build his own distribution channels to sell them.

But Tan Jincheng certainly doesn't have that ability, so he can only play the subservient role and offer discounts to distributors in order to capture the market.

We have a preliminary plan for factory construction, product positioning, and marketing methods. The next step is to actually implement it. It all depends on how things go on Zhang Mingcan's side. If there is no suitable option, then we will have to start by renting a factory.

A towering building starts from the ground up; taking the first step is the key.
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"Boss, come out for dinner."

"Okay, got it." After extinguishing his cigarette, Tan Jincheng let out a long sigh, got up, and walked out of the office.

Let's focus on the present moment first. Building a factory requires taking it one step at a time and can't be rushed.

But what should we name the factory? And what kind of brand trademark should we register for the electric vehicle? If we can't register the trademarks of our major competitors, we'll lose our anchor point, which would be a huge loss.

The exterior design of electric vehicles must be novel, and the name must be catchy. For a brand-new brand, this is no less important than quality control, and may even be more important in the initial stage.

After all, the quality control of Xiaomi's first generation under Lei Jun wasn't great, but it still managed to quickly capture the market thanks to its extreme cost-effectiveness, decent appearance, and operating system.

In a market where reputable brands typically sell for three to four thousand yuan or more, what more could you possibly want for 1999 yuan?
The price of 1999 yuan is not bad. Tan Jincheng also wants to try this price range for his first electric car. Since he wants to seize the market, he will go all the way. The main focus is on making friends. He doesn't make money. He really doesn't make money.

While eating, Tan Jincheng was daydreaming about a bright future and couldn't help but laugh, which puzzled Li Yanning and Li Jinglan. In the end, Li Jinglan couldn't help but speak up.

"Boss, is today's food especially to your liking?"

"Ah? Why do you say that?"

Once he came to his senses, Tan Jincheng looked at the three dishes and one soup on the table. They were no different from what he usually ate. Whatever tasted good, that was what suited his taste best.
"I noticed you were grinning as you ate. Was the food to your liking or was something making you happy?"

"Oh, of course we're happy! More orders mean more money, so aren't you happy?"

"What's there to be happy about? You don't share the money you make with us, and you even increase my workload." Although Li Jinglan was a little afraid of Tan Jincheng, perhaps because she was young, she really dared to speak her mind.

In fact, aside from being strict at work, Tan Jincheng was very kind to the Li Yanning and Li Jinglan sisters, providing them with ample salary and benefits. He was also very tolerant of Li Jinglan's naive and innocent personality, and didn't mind her outspokenness.

Anyway, Li Yanning would teach her a lesson. No sooner had Li Jinglan finished speaking than Li Yanning scolded her, "What nonsense are you talking about? The company's improved performance is definitely a good thing for us."

"Haha, it's alright, Jinglan is right; how about this, didn't we give you a raise last year after you completed a full year?"

"We've landed a big order now, and we'll be hiring new people next month. We won't wait until the year is up; we'll start raising your salaries next month. Your base salary will be increased by 20%."

A one-time increase of 20% may seem like a lot, but in reality it's not much money. Take Li Jinglan for example, her basic salary is 1500 yuan, and a 20% increase is 300 yuan, which is only 3600 yuan a year.

"Really?" Li Jinglan ignored her sister's scolding and immediately asked.

"Of course it's true. What you said makes sense. It's normal for employees to enjoy some benefits when the company makes money."

"Boss, you're so kind to me! You're even better to me than my brother. You're my benefactor! Have a chicken leg!"

Just moments ago, Li Jinglan had been all arrogant, but now she was acting like a sycophant, flattering Li Yanning while giving her a provocative look.

Li Yanning felt a little helpless, but she still said, "Thank you, boss."

With a 20% increase in her base salary, her monthly income will increase by 600 yuan. Five months ahead of schedule, that's an extra 3000 yuan, almost enough to cover a year's rent—a pleasant surprise.

Jinglan is right. Boss Tan and Boss Zhang are indeed very good. Perhaps this is the advantage of working for a young boss. They don't haggle over salary and benefits like those middle-aged bosses.

"I hope Boss Tan's business gets better and better, so we can earn more too," Li Yanning thought to herself.

If it weren't for his dreams, Tan Jincheng would actually be quite happy with his current situation, because the profits from the simple foreign trade business have been really high over the years. Jinpeng Trading operates with light assets, and the company's costs, apart from rent, are basically just utilities, travel expenses, and some entertainment expenses.

Based on your own capabilities, you can hire a few order assistants and salespersons. The company will not need to exceed 20 people at most. With an annual operating cost of around one million, it is relatively easy to achieve a turnover of several hundred million.

If you do well, you can amass a fortune of over 100 million in just a few years, or even one or two years. Many business owners started their businesses this way because the purchasing power gap between the US dollar and the RMB is simply too significant these days.

Earning US dollars and spending RMB, with government subsidies—just imagine how powerful that is! It's somewhat similar to the feeling of waving RMB around and spending money in underdeveloped countries in later generations.

"After lunch, rest for a while. In the afternoon, you can come with me to visit suppliers. If there's anything you need to do before the Canton Fair ends, take a taxi if it's far away. Remember to bring back your reimbursement vouchers."

"Okay, boss, did you buy a new car? I saw you get out of a BMW this morning." As Li Jinglan agreed, she couldn't help but ask, recalling what she had seen while slacking off that morning.

"Yes, I registered a new company, and that car is for the new company. The Passat will be driven by your boss, Mr. Zhang. Also, you two should hurry up and learn to drive. There will be more and more cars in the future, and it will be more expensive to learn."

"Yes, we'll register this Sunday."

This is the third update today, totaling 10,000 words.

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(End of this chapter)