2003: Starting with Foreign Trade

Chapter 82 Factory Plan
Cheng Yongjun didn't quite understand why Tan Jincheng needed a loan.

In his view, Jinpeng Trading is a foreign trade company with light asset operation. The amount of money it has is not the key point. The key point is whether it has a stable source of customers.

As long as there is a stable customer base, Jinpeng Trading's cash flow will remain healthy, and there is no need for loans.

According to the bank staff he contacted, Jinpeng Trading had a large amount of cash flow in its account, and the company's business volume was very stable each month, judging from its tax payments, so there was no need for a loan.

What kind of customers do banks prefer? Banks prefer to lend money to people who don't lack funds. If the loan is made through Jinpeng Trading Co., Ltd., the bank would be very welcoming.

However, Xiao Tan wants to take out a loan in her own name, which will cause some trouble in terms of procedures, but it's not a big problem.

However, what does Xiao Tan need a loan for? To open another trading company? But given Xiao Tan's current net worth, even if she were to open another trading company, there would be absolutely no need for a loan.

A person who is not short of money borrowing money from a bank can only mean that he has greater ambitions.

Cheng Yongjun looked at Tan Jincheng thoughtfully, thinking about how the young man had been inquiring about setting up and managing factories recently. Could it be that he wanted to do this?
If you want to set up a factory, then you definitely need a loan.

Factories require a lot of money. A small manufacturing company with a hundred employees usually has a three- or four-tier management structure: employees - managers - production directors - general managers.

There can be one layer between the manager and the production director, and the founder can also serve as the general manager, which is how it works in their own factory.

Generally speaking, the salary of the next level is 1.5 times, 2 times, or 3 times that of the next level.

If the company has 100 employees, it needs at least one manager and one workshop director. If the assembly line is divided into five groups, it will need five group leaders, leaving 93 grassroots employees.

On average, each team leader manages about 20 people, ensuring efficiency without needing to recruit management-experienced talent. Recruitment is relatively easy, and internal promotion is also possible.

That's how Cheng Yongjun's factory operates: a team leader leads a dozen or twenty subordinates, and the efficiency is quite good.

The monthly salary for employees is calculated at 2000 yuan, for team leaders 3000 yuan, for workshop directors 5000 yuan, and for managers around 7500 to 8000 yuan.

This part alone costs 21.35 yuan per month in salary expenses. If the year-end bonus is included, the annual salary expenses would be around 240 million yuan.

This doesn't even include finance and cashier positions. Running a factory definitely requires full-time finance and cashier positions; you can't just find a part-time job like Xiao Tan is doing now.

In addition, there are factory rent, daily expenses, etc. A factory with a hundred employees would need at least 30 yuan a month in expenses, even if it is carefully budgeted.

The above list only covers employee wages and daily factory expenses, not including cash flow needed for purchasing equipment, raw materials, and other daily needs, which is also not a small amount.

Not everyone has the courage to start a factory. If Xiao Tan really wants to take out a loan to open a factory, then Cheng Yongjun truly admires his courage.

Cheng Yongjun didn't know what an industrial chain was, nor did he understand these things. However, he knew that although starting a factory was very risky, the profits were also very substantial. The key to becoming a large and strong company was to integrate production and sales and take the profits from the contract manufacturers.

A shell trading company or a sizable OEM factory can easily manipulate you. Tan Jincheng does indeed have plans to open a factory, but not the kind of garment factory Cheng Yongjun envisioned. For his second venture, Tan Jincheng wants to do something different, and that's why he's taking out a loan in his private name.

Starting this year, I will establish my own factory, which will not only generate profits but also allow me to accumulate design expertise and patents.

Looking back from a modern perspective, almost all companies ultimately dream of building cars! This applies to traditional automakers, mobile phone manufacturers, and even big investors.

Perhaps, under one's own leadership, the creation of a car is a man's ultimate dream, and Tan Jincheng is no exception.

However, there are almost no opportunities left for traditional cars at the moment; Tan Jincheng has learned that entering the market at this time, even with strong capital support, has a very low probability of success, and is almost no different from throwing money down the drain.

In 2005, the most successful domestic traditional car brand was undoubtedly Qirui. Its Qirui QQ, which it produced independently in 2003, pioneered the domestic microcar market. This year, its monthly sales have reached nearly 10,000 units, enjoying great success.

In addition, there are Panda, Benben, and the soon-to-be-discontinued F3, all of which have been well received by the market. If Tan Jincheng competes head-on with these companies, he has no chance of winning.

With traditional automobiles already out of reach for Tan Jincheng, the only option left is to pursue new energy electric vehicles. Accumulating electric vehicle technology now and waiting for the right opportunity to take off is Tan Jincheng's best choice at present.

As for how to enter the electric vehicle industry, two-wheeled electric vehicles, also known as electric bicycles, are the best choice.

The three most critical components of a two-wheeled electric vehicle are: battery, motor, and controller. At the end of last year and the beginning of this year, Tan Jincheng saw some electric vehicles in his hometown that were modified from bicycles by adding motors.

The range is basically around 10 to 20 kilometers, and the price is around 500 yuan. Out of curiosity, Tan Jincheng even bought one and took it apart.

Tan Jincheng naturally didn't understand the professional knowledge, but men generally know a little about mechanics; a bicycle that had been crudely modified and had no aesthetic appeal could be sold for five or six hundred yuan.

And the fact that they can still sell quite well fully demonstrates the demand of people at the bottom of society for transportation tools. Although there are quite a few legitimate electric vehicle brands at present, none of them have formed a dominant market position.

It is now 2005, and the price of an electric car is around two to three thousand yuan, which is not much different from the price eighteen years later. This price is equivalent to two months' salary for most people today.

Spending two months' salary to buy an electric car is still quite a luxury. It's no exaggeration to say that the electric car market is only just beginning to see huge profits.

Eighteen years later, electric vehicles with better quality and more attractive appearance could be sold for 3000 yuan, and they still cost 3000 yuan now, which shows that the profit margin is quite considerable.

If the cost of electric vehicles can be controlled within 800 yuan, and a price of 1999 yuan is set, it shouldn't be difficult to open up the market, right?
Most importantly, producing electric vehicles does not require the same qualification review as producing cars; the entire factory and production line can start operating immediately.

Using the profits from electric vehicles to sustain the factory, accumulate battery technology, and prepare for entering the new energy electric vehicle industry in the future is the best option for Tan Jincheng at present.

As for import and export companies dealing with electronic products, they are merely a means to make money.

Just like investing in stocks, one is a long-term investment and the other is a short-term investment; the two have different meanings.

(End of this chapter)