1988: Back to the human world for a few years

Chapter 60 Yang Mo's suggestions
After pedaling the broken tricycle exhaustedly to bring the local dog and the cart of things back to his own small yard, Yang Mo reported to the office in the morning for the next two days. Then he spent the rest of the time taking this dog to buy various daily necessities including beds and clothes, and also letting her familiarize herself with various places in the drilling company. He was really tired after running around all day long.

On the eighth day of the Lunar New Year, Yang Mo suddenly asked Director Zhang to approve a sum of activity funds, saying that it was for project research.

Although he didn't understand what research was needed at this time, the funds Yang Mo applied for were not much, so Director Zhang waved his hand and... approved it!
So that morning, a local comrade who had just put on a new down jacket suddenly disappeared without a trace. In the three nearby villages including Baiyang Village, the number of young people who planned to take advantage of the Spring Festival to make money also suddenly decreased by nearly half.

On the tenth day of the Lunar New Year, Yang Mo knocked on the door of the director's office as promised.

Although it is not very humane to meet and report on such an important matter on the deadline, there is no other way... Since Comrade Tugou is involved, Yang Mo naturally has his own considerations.

………………

"Well... this is your suggestion? ... Are there any considerations involved?"

Looking at the information Yang Mo handed over, Zhang Wenshun flipped through it and frowned in confusion.

As the first batch of hedging experimental subjects, the list of township enterprises selected a few years ago was carefully selected. It includes not only many enterprises with relatively ideal current profitability, but also many industrial production enterprises with low barriers to entry such as toys, small household appliances, etc. - as we all know, in this era, industrial products with high added value are king.

However, Yang Mo did not choose those enterprises that seemed to be able to make profits quickly after taking over. Instead, he took out a small food processing factory alone. Unfortunately, the operating condition of this food factory was not very good and it seemed that there was a danger of GG at any time.

This is not difficult to understand. According to the information, this food processing factory with more than 50 employees was taken over by a "new manager" who returned from a southern coastal city with a full load three years ago. He ambitiously spent a large amount of money to build a set of second-hand refrigeration equipment and two small assembly lines, and shouted out the slogan of "sales exceeding 100 in one year and million in three years."

However, due to mistakes in business decisions, products such as gluten, starch sausage, starch fish balls, etc. produced by this food processing factory have a difficult time selling in Qilu.

This wishful new manager seems to have forgotten that although these products that taste "meaty" are low in cost, the current consumption values ​​and habits in Qilu are different from those in the southern coastal cities. Under the condition of severe restrictions on the use of local scenarios, even if one or two orders can be attracted from the south, they will not make much money due to the current extremely high logistics costs.

To be honest, if the new manager was not a local and this type of township enterprise had extremely strong cause and effect constraints, he would have packed up and run away long ago.

Again, if someone had recommended to him that this food processing plant be listed as a pilot project, he would have banged his head on the table and scolded them - apart from the cold storage equipped with a power generation device and the two small production lines that could almost be thrown into the garbage dump, what else in this food factory is worth paying attention to?

But now that the person recommended is Yang Mo, Zhang Wenshun has to seriously explore the reasons behind it - although this kid is always sneaky and cunning, he is definitely not a person who speaks without thinking.

………………

Seeing that the fat man did not object immediately, but asked the reason, Yang Mo smiled with satisfaction.

"Director, the reason why I didn't recommend those light industrial projects that seem to have higher profits and better operating conditions at first glance, but recommended such a food processing factory that seems to have no value, is actually due to three considerations."

As he spoke, Yang Mo took a big lucky stick from the guy's table without hesitation and said, "First, the fundamental foothold of all tertiary industry pilot projects is to solve the employment problems of company family members and idle employees. Therefore, as long as the operation can be maintained, the profit of the pilot project is not important, but whether it can solve the employment problem is very important - this is the survival cornerstone of a series of subsequent plans, and it is also our commanding height. Once the plan loses its [justice], no matter how good the benefits are, it will be useless!"

Zhang Wenshun nodded in approval. To put it bluntly, as long as he could barely maintain the operation of these projects while solving a large number of employment problems, he would be the first hero that no one could shake. On the contrary, if he only achieved benefits but could not effectively solve the employment problem, he might be reaped the benefits at any time.

Thinking of this, he looked at Yang Mo with some doubts: "That's true, but... this food processing factory is only a small factory after all, and there are already more than 80 people crammed into it... In the early stages of everything being stable, we can't optimize their workers on a large scale, so... after letting them register, can it really effectively solve the employment problem of our family members?"

Yang Mo smiled: "Director, there is an old saying: [The effort lies beyond the poem]... From the perspective of investment, to evaluate whether a project can effectively drive employment, it is not to see how many jobs its concrete value carrier can provide, but to see how long the upstream and downstream industrial chains it involves, and how many jobs those upstream and downstream units that can be effectively affected can provide... The reason why our country has repeatedly studied and discussed whether to make real estate a pillar industry to boost the economy is because the industrial chain it involves is long enough!" Looking at Director Zhang's pensive look, Yang Mo added: "Logically speaking, although this kind of food processing plant also involves some upstream and downstream industrial links, it is not long enough. Before it has achieved sufficient scale, there is no real influence, let alone the derived targeted jobs... But that's because most of the food processing plants in China currently follow the TOB route... If they follow the TOC model, it's completely different... To be precise, it's a variant of the F2B2C model!"

TOB?

TOC?

F2B2C?

What is that stuff?
When Zhang Wenshun heard these terms for the first time, he was instantly confused and had no idea what they meant.

Yang Mo, realizing that he had spoken fluently, quickly gave the fat guy some lessons, and used the simplest words to tell him what TOB, TOC, and F2B2C were.

After wasting ten minutes on this topic, Yang Mo returned to the main topic: "The second reason for choosing this project as the experimental point is... the ability to convert funds into cash is the fastest, the initial book benefit curve is the most beautiful, and it is easier to use data to convince the company to promote subsequent hedging projects in the short term!"

"As I said before, we must recruit as many high-quality private enterprises and township enterprises as possible before the end of this year... After this boom, it will be difficult to bring these enterprises into our pockets at almost zero cost!"

Zhang Wenshun was stunned.

The fastest cash conversion capability?
The initial book benefit curve is the most beautiful?

Just a small food processing factory that can be found everywhere?

Are you sure you're not fooling me?

Seeing this, Yang Mo thought for a moment and patiently explained in as straightforward a manner as possible: "Director, from the perspective of single-unit operation, the most valuable thing is not to add a new project with broad market prospects or lucrative profits... After all, this means that a large amount of funds need to be invested, and human resources allocation needs to be redone, and it also means uncontrollable market risks and competitive threats."

"But correspondingly, for any experienced operator, the kind of [destocking], especially the project that can use existing products, workers, technology, production lines, and supply chains to digest the spot inventory, is a truly good project. This kind of project not only does not require additional expenses, but can also quickly turn liabilities into profits. Moreover, the cyclical growth curve on the book data is amazing, and people who don't know the business will definitely be shocked when they see it."

"Of course, if this kind of [destocking] project can also reduce operating costs and increase revenue through economies of scale, and continue to snowball, it would undoubtedly be even more perfect - from an investment perspective, the value brought by this kind of project is equivalent to ten pure cash income projects of the same size!"

Zhang Wenshun seemed to understand what he heard, but he didn't quite understand. Just when he hesitated for a while and wanted to ask, Yang Mo seemed not to notice his doubts and continued to talk: "The third reason why I chose this project as the entry point... Director, do you remember that I applied for funds from you for background investigation a few days ago?"

Zhang Wenshun was stunned, then nodded subconsciously, thinking, I remember, but isn't it obvious that you have no money after the New Year and are planning to spend it for personal gain... By the way, don't forget to find some invoices to make up for it when the time comes?

Seeing this, Yang Mo coughed a little guiltily: "Director, I said before that although due to the current special environment, we don't need to pay any direct price to incorporate these companies that voluntarily handed over to the state, but in fact, if we don't want to be left with a mess in the future, we must screen these projects according to the formal investment logic."

"I'm going to say something you may not like to hear, Director... In the eyes of most laymen, investment or financing is nothing more than a matter of money. When it comes to this issue, everyone's eyes are often focused on the string of numbers... But I'm telling you seriously... This is an extremely superficial view, or even an extremely wrong concept... If the company's management team uses this superficial eyelid that can't even catch a mosquito to carry out subsequent hedging projects, I bet that even out of a hundred investments, not even one will succeed!"

Hearing Yang Mo's cold tone, Zhang Wenshun immediately became serious, "Boy...what do you say?"

(End of this chapter)