1988: Back to the human world for a few years

Chapter 97: Iron Chain Across the River (1)

on Monday.

Xintai Management Company Office.

The atmosphere at the group meeting of the management steering group was not harmonious.

They were all aware of the fact that the Momo Baizha project started off strong but ended up declining, but what they didn't expect was that this project, which was once favored by everyone, would collapse so quickly.

But what was even more unexpected was that the first one to jump out and fire was not the Asset Management Department that had suffered a big loss some time ago, nor the General Manager's Office that had been overshadowed by the Industry and Agriculture Department, but...

The Finance Department, which has been making a fortune quietly, has gained the greatest benefit from this incident!
………………

"As of last Friday, excluding the three model stores, the weekly sales of the 25.2 new franchise stores of Mo Mo Bai Zha has dropped to yuan per week!"

"A month ago, the figure was 28 yuan per day... I need to add that a month ago, we only had 16 new franchise stores!"

"The number of franchise stores has increased, but the sales of each store has decreased, and the weekly sales have dropped by more than 34.2% for a month in a row... Ladies and gentlemen, the situation is extremely grim!"

Officer Jiang read out a set of numbers in a heavy voice, but his face was expressionless as he glanced at everyone's faces.

Although even the least financially literate person can tell how difficult the problem is, the rather strange direction of the situation today is the focus of everyone's attention.

what's the situation?
Aren’t the Finance Department and the General Manager’s Office in the same group? Why did they suddenly cause trouble today?

Restraining his doubts and anger, Jiao Shouqiang coughed twice and said in a very calm tone: "Things have a cycle, and the moon waxes and wanes... The current economic environment is not very ideal, and the price of our fried skewers is not very cheap. The business of the franchise store has temporarily declined, which is also normal~!"

He is the leader of the business guidance group. Once Yang Mo, the actual operator who holds the position of director of the operation management center, withdraws, he will be the undisputed project leader. Therefore, Officer Jiang blames Yang Mo for the decline in the efficiency of the Baizha project, and he is the first person responsible.

Officer Jiang glanced at him indifferently, then returned his gaze to the data, saying in a light tone: "But the sales of the three model stores that were set up at the beginning have been rising... At the beginning of April, their average sales per store reached 6 yuan per week. Now, the sales have exceeded 9 yuan per week, and the average weekly sales growth rate has exceeded 6%!"

As he spoke, Officer Jiang raised his head and looked around at everyone again: "Please note that what we are talking about here is the average data for a single store. There are three model stores of Mo Mo Bai Zha... In other words, the current sales of the other 61 franchise stores combined are not as much as these three model stores... To be precise, it is only 92.6% of theirs!"

"As for the growth rate, there is no comparison. Their weekly turnover growth rate is over 6.2%, while the weekly growth rate of the other 61 franchise stores is -34.2%... In fact, if it weren't for the fact that the three model stores were too small and had limited space and manpower, their operating capacity would have reached its limit more than half a month ago, and their weekly growth rate would be far from this figure!"

When this set of numbers was announced, everyone present couldn't help but blush.

The combined sales of 61 franchise stores with larger areas and better staff are still less than those of the three small model stores with an area of ​​only ten square meters. Anyone should hide their head in the ground.

The most crucial thing is that, because of the original agreement, the three model stores retained the business exploration function, and therefore have always been directly managed and operated by Qingfeng Food... In other words, these three stores are operating strictly in accordance with the set of rules left by Yang Mo, and the booming business has nothing to do with their business guidance group, which is even more embarrassing.

Seeing Jiao Shouqiang's expression stiff, Tang Chaoxian from the Department of Industry and Agriculture coughed and said, "Well, Xiao Jiang, you can't look at things that way... Our company is a central enterprise, not a private enterprise that only cares about pursuing profits. The original intention of Mo Mo Bai Zha was to solve the employment problems of family members and employees... At least in this regard, the current results are satisfactory!"

As soon as this was said, everyone nodded.

The drilling company is not one of those state-owned enterprises with poor performance. Like all current central enterprises, it never takes economic benefits as the first consideration when opening tertiary industry projects...and due to some objective factors and historical reasons, its thinking patterns on some things are even more unique.

Isn't it just another form of paying for peace? As long as the family members don't make trouble and the company is harmonious, losing a little money is not a big problem.

Officer Jiang took in the expressions of the crowd and sneered in his heart.

He nodded respectfully to Tang Chaoxian and said, "Teacher Tang's words do make sense. If it can effectively solve the employment problem of family members, and the company subsidizes some funds, I think no one will object. However..."

When he said the word "only two words", Officer Jiang once again put on his poker face: "But everyone has forgotten one thing... these family members joined this project as franchisees... this is very different from setting up a company and then letting them work as contract workers."

!!!

Everyone's expression changed again, and they immediately understood what Officer Jiang meant.

As expected, Officer Jiang did not wait for anyone to speak before continuing: "In previous tertiary industry projects, the company provided money and venues, and the family members worked and received a fixed salary. It was that simple... But the Momo Baizha project is different. Although these family members can be regarded as contract workers of the newly established catering management company to a certain extent, their more important identity is that they are franchisees with shares... They have invested real money to participate in the shares, and some of them have raised the money by borrowing from everywhere... Seeing that the performance of these franchise stores has plummeted, they are even at risk of losing all their original capital. Do you think the family members will agree?"

This is the embarrassment of projects incubated within state-owned enterprises. For a well-known reason, when these projects are implemented, the trait of participants that "can share wealth but not adversity" is fully demonstrated... It is impossible for current state-owned enterprise leaders to let them bear the risks themselves in accordance with market rules, and these family members and employees who are used to eating from the same pot are completely unable to accept this kind of behavior where no one provides a guarantee.

And if these families really suffer huge losses, guess what will happen?

Zheng, a member of the Asset Management Department, thought about it and put forward his own suggestion: "If it really doesn't work, we can buy back the shares and turn the franchise stores with poor performance into directly-operated stores, and those family members can continue to work there... Anyway, we have to subsidize so much money every month. To be honest, there is no difference between these franchise stores and directly-operated stores!"

This is an old method. In the past few years, state-owned enterprises across the country have tried many times to make their subordinate units learn to walk independently. However, once the performance is not good, they cannot watch their children starve to death. Therefore, repurchase and reorganization have become the most common means of protection.

In fact, this method is at least not a bad thing for the Asset Management Department... The company lost money, but the scope of business under the jurisdiction of the Asset Management Department has become wider. Although it cannot make you fat, it can at least make up for the losses caused by the decentralization some time ago!

Zheng's calculations were ringing loudly, and Jiang knew what he was planning. He sneered, "Buy back shares? ... Do you think the company still has enough money on its books for you to buy back shares?"

As soon as this statement came out, everyone was shocked.

Jiao Shouqiang looked at him in disbelief: "How is this possible!?"

If I remember correctly, two months ago, President Wang approved a special fund of 700 million yuan for them, which was used for low-interest loans for family members, rent payments, store renovations, purchases of equipment and raw materials, etc. Although this amount of money is a lot, for a wealthy company like the drilling company, it would not drain all the funds on the books, right?

Officer Jiang glanced at him calmly and said, "Oh, everyone has devoted themselves to this project during this period. I think everyone knows the current situation of Mo Mo Bai Zha."

As he spoke, Officer Jiang picked up a report and handed it over: "As of last week, the project team's expenses for family loans amounted to 147 million yuan;"

"The rental contracts for the 61 new stores vary from one year to five years, and the rent expenditure is 62 yuan... Fortunately, the current rent is not expensive, otherwise this amount would be an astronomical figure (the current operation and management model of Mo Mo Bai Zha is different from the franchise stores in the future);"

"The renovation of the store, the customization of clothing, and the purchase of store equipment all added up to another 207 million yuan;"

"In addition, we also have water and electricity subsidies, which means that we have to bear half of the water and electricity bills of the franchise stores opened by family members every month... According to statistics, our subsidies in the past two months have reached 1.2 yuan, and will increase in the future. In a year, the water and electricity subsidies for these 61 family franchise stores alone will not be less than 20 yuan!"

Jiao Shouqiang quickly calculated in his mind and then let out a breath.

fine! fine!
He coughed lightly and said, "Officer Jiang, although the expenses are a little bit higher, the total of these expenses is only 436 million... Isn't it easy to use the remaining money to buy back shares?"

Officer Jiang glanced at him calmly and said, "Team Leader Jiao, I haven't finished yet... Indeed, if we only look at these expenditures, our project team should have enough special funds."

"But, everyone has forgotten one thing... The biggest and most troublesome expense of the Mo Mo Bai Bombing Project is not these fixed expenses, but... raw materials!"

When they heard the word "raw materials", the expressions on everyone's faces began to become more vivid.

Officer Jiang pulled out another report: "As of last week, the Momo Baizha project had signed long-term cooperation agreements with 23 local state-owned units... The content of the agreements is basically about the purchase of frozen food and beverages... The raw materials involved are as many as 76 kinds, including but not limited to soy products, seafood, poultry, canned meat, pasta and other products."

"According to the contract, these 23 companies have to supply us with goods worth about 120 million yuan every month... In other words, the funds we have locked up in this area alone are as high as 1440 million yuan per year, which even exceeds the funds specially approved for us by the company!"

"If the Momo Baizha project is operating well, this is naturally not a big deal... It doesn't matter if the sales of these newly opened franchise stores can reach 30% of those three model stores, and the cost control level can reach half of theirs, the funds recovered can easily cover these costs, and there may even be some left over."

"But now, haha..."

Seeing that everyone's eyes were on him, Chen, a member of the service team, smiled and said, "Old Jiang, I don't quite understand your calculations... Even if the business of these new stores is not as good as those three model stores, we have visited them several times and the attendance rate is not very low... We don't ask for much money, but at least we can break even... After all this, at least the purchase cost of raw materials and the cost of rent, water and electricity can be covered, right?... So why is this special fund not enough?"

Everyone naturally knew why Officer Chen suddenly had such a look on his face and called him "Old Jiang" so affectionately, but there were certain things that everyone knew very well, not to mention that this large purchase would bring huge benefits to the Industrial and Agricultural Science Department and the General Manager's Office... Even if it didn't, as long as the service team didn't do anything too out of line, they could only pretend not to know due to some unspoken rules.

Officer Jiang glanced at Officer Chen with a half-smile: "Does it cover the purchase cost of raw materials and the cost of rent, water and electricity?... Officer Chen, it seems that even though you have been busy for two or three months, you still don't know much about catering operations!" As he spoke, he ignored Officer Chen's ugly face and turned out a report like magic: "According to statistics, among the 76 kinds of food ingredients purchased by the company, only 50 kinds have a single-store turnover rate of more than 4 kg/week;"

“There are only six types of products with a single-store turnover rate of 30 to 50 kg per week;”

“There are 20 types of products with a single-store turnover rate of 30 to 14 kg/week;”

“There are 10 types of products with a single-store turnover rate of 20 to 17 kg/week;”

“However, there are 10 types of products with a single-store turnover rate of less than 35 kg/week;”

At this point, Officer Jiang's tone became more serious: "That is to say, if we follow the minimum passing line of 20 kg/week single-store turnover rate, 68.4% of the raw materials purchased by the company do not meet the business requirements... But since the purchase contract has been signed, and it is signed for one year, we can't break the contract without reason!"

"This has resulted in a serious backlog of food ingredients in these 61 franchise stores and severe losses... According to preliminary investigations, in the past month, each store has discarded or reported more than 350 kilograms of food ingredients on average... The total loss is more than 2200 yuan... Each store wastes 2200 yuan on food ingredients per month, which means 61 yuan per month for 13.4 stores, or 161 million yuan per year!"

"Even without doing a detailed calculation, you can tell there's a huge hole there. With an average attendance rate of only 45%, it's impossible for franchise stores to break even with their current sales... Moreover, Mo Mo Bai Zha is taking a people-friendly approach. Even the combined gross profit margin of its popular products is less than 32%. With so many unprofitable and loss-making product lines holding it back, and so many invisible costs hidden behind them, how can these family members possibly make money!?"

Even those popular products have a gross profit margin of less than 32%?

Everyone who had never calculated these data gasped and realized the seriousness of the problem.

A gross profit margin of 32% may not sound very low, but you have to understand... these days even selling steamed buns can bring a gross profit of more than 70%!
Moreover, Mo Mo Bai Zha is different from those selling steamed buns and vegetarian noodles. These things are all fried in oil.

In this era when materials are not yet abundant, cooking oil is not precious, but it is definitely not cheap, and the resulting cost fluctuations cannot be ignored... Whether it is because of bad business that causes the pot to be empty for a long time, or improper operation that causes the pot oil to be scrapped, the operating cost will immediately rise a lot, and it is normal to even directly cut into your net profit for the day.

And most importantly...

Mo Mo Bai Zha takes the people-friendly route. Ordinary fried skewers are only one dollar a box, and even the most expensive luncheon meat and squid are only two dollars a portion. Under this pricing system, a gross profit margin of 32% sounds acceptable at first, but when converted into gross profit, it is only to cents per order. Even if the operation is good, the actual net profit for each order sold is only about cent.

You don't need to carefully study the actual costs of the 52 slow-selling products. Just go over the net profits of these hot-selling products in your mind, and you will immediately understand where the problem lies.

The loss caused by scrapping one unsalable product can only be recovered by selling at least 20 to 30 pieces of fish balls and fish tofu.

On average, a franchise store has to report and discard 350 kilograms of unsaleable products every month, which is equivalent to at least 1100 portions... In other words, to offset this loss alone, it would need to sell 2.2 to 3 portions of fried fish balls every month.

Can each of the 61 stores currently sell 3 fried skewers per month?
Some stores can, but it's difficult!

In other words, even if there is a loss subsidy from the drilling company, after offsetting the loss of this part of the raw materials, there will not be much turnover left on the franchise store's books.

This is just to offset the cost of raw material loss of unsalable products...

What about the rent cost?
What about water and electricity costs?
What about labor costs?
What about tax costs?
What about the rest of the hidden costs?

With such a big hole, how many fried skewers must a store sell every month to make a profit?

I can’t make back my investment, but I’m afraid the family members will come and cause trouble. What should I do?
The company can only continue to pay money to fill the hole?

Such a big hole is just there. Not only will it not shrink gradually with the passage of time, but it will become bigger and bigger as the business of these franchise stores declines… All the special funds allocated by the company have been used to fill it. How can there be money to repurchase shares and turn these franchise stores into directly-operated stores?
………………

Seeing that everyone finally realized the seriousness of the problem, their expressions turned grim.

Jiang Keyuan, who had discovered this problem a long time ago but had been holding back, sneered in his heart, but his face became more serious: "I sincerely advise everyone not to think about asking the company for money to fill this hole!"

"To be honest, the company allocated 700 million yuan in special funds to us at once, which was already very generous. Mr. Wang even signed the contract despite the risk of being scolded!"

"Currently, these 61 franchise stores have solved the employment problems of 293 employees' family members, which means an average of 2.39 yuan per person... This standard is already the salary of an ordinary worker for nearly three years!"

"If it were another company, they would just assign a position and pay the 20,000 yuan as salary for two or three years, wouldn't that be great?!"

Officer Jiang seemed a little emotional. He knocked on the table and said, "But Mr. Wang still signed it... Even though everyone knew Mr. Wang's attitude towards this project, he still signed it despite the huge risk... For no other reason, he signed it because everyone said that the Momo Baizha project could solve the employment problems of thousands of employees' families!"

"Let me be frank. No matter how you usually view Mr. Wang, this matter... Mr. Wang did it with great courage!"

He glanced at everyone with a look of disappointment: "But what happened? President Wang created such good conditions for us, but now we have turned a golden hand into a bad one! ... To be honest, if you have to shamelessly ask President Wang for funds again, please don't take me with you... I can't afford to lose face!"

At this point, Officer Jiang snorted coldly: "I'm not afraid to tell you the truth. The company does have money in its account now, and it's definitely enough for you to ask for it again... But I might as well tell you that even if you are willing to lose face and ask for the money, you will definitely not get it!"

Jiao Shouqiang, whose face was turning green and purple, was shocked when he heard this: "Why? This matter concerns the employment of hundreds or even thousands of family members and employees... Even if I encounter a small problem due to my lack of experience, Mr. Wang will not just stand by and watch me die, right?"

From a standpoint, Officer Jiang is no different from other team members… If a member of another department said this, Jiao Shouqiang could have simply dismissed them as bullshit, but in his heart, Officer Jiang is one of his own, and the other party is a core member of the Finance Department, so the meaning of saying this in public is very different.

Officer Jiang stared at him calmly for a while, then he sighed heavily, "The reason is very simple. After deducting the fixed expenses such as employee benefits, public relations maintenance, infrastructure, and public expenses, and reserving the necessary emergency funds... the company still has money on the books, and it is not a small amount, but if both sides ask for money at the same time, the company will not have enough money... If I were President Wang, I would rather reject your application for additional funds directly than be soft-hearted and be scolded by both sides... After all, President Wang has been kind enough at the beginning. It is us who are not doing well. It is not President Wang who is to blame."

Open both mouths at the same time?

Everyone looked at Officer Jiang with some confusion, not understanding what he meant... Aren't we the only ones who need money? Who else would ask for money?
Officer Jiang sighed speechlessly when he saw this: "Have you forgotten about Supervisor Mu? We agreed that we would take charge of the internal affairs, while Supervisor Mu would take charge of the external affairs. Both sides would learn and improve together and compete fairly. The first special fund was fine, but if we ask for it a second time, do you think Supervisor Mu would not follow suit?"

"You know, Director Mu is in the foreign trade business! And it's foreign trade with Northeast Asia!... Seriously speaking, their demand for funds is much greater than ours... It's not too much for them to ask for 20 or 30 million yuan in equal proportion from the company, right?... Do you think the company still has that much money to support Director Mu?"

"But what if we approve our funding application but reject Director Mu's application? ... The consensus that we spent so much effort to reach is invalid? ... How do you expect Mr. Wang to behave? What do you expect Director Mu and the headquarters to think? ... Do you think the company doesn't have enough troubles now and want to give it a big surprise!?"

Everyone gasped, and then they remembered that there was a young lady with a strong identity and background opposite them.

Twenty or thirty million?

Be good~!

What a big appetite! How many companies in the country can take out 20 or 30 million from their accounts these days! ?

But on second thought, the oil system is not some other unit, and that Miss Mu is planning to capture the two big pieces of fat meat in Northeast Asia. Although asking for 20 or 30 million is scary, it is not excessive according to the principle of proportionality... Didn't she see that she was only opening a few dozen snack bars, and she easily invested several million?
Seeing that the last way of retreat was blocked, everyone lamented and couldn't help feeling anxious.

The Momo Baizha project is not a commercial project in the ordinary sense. Not only does it cost a huge amount of money, but it also involves the employment and investment issues of hundreds of family members and employees. It carries such a huge cause and effect. If the problem is not properly resolved, every one of these members of the currently very successful management steering group will definitely die without a burial place!
………………

An hour later, the door of the conference room opened and a group of depressed team members walked out with gloomy faces.

Officer Jiang, who was walking at the end, gently closed the door and looked at the team leader who was in a state of anxiety, with a hint of sarcasm on his face.

Ah……

Divide the spoils, divide the spoils, only when there are spoils can we talk about dividing the spoils!

Mr. Wang is right, good-for-nothings are good-for-nothings. Without someone to take the lead and to back them up, it will be useless no matter how many opportunities they are given!

A bunch of idiots who are full of little ideas, only care about their own little things and are eager for quick success!
Thinking of this, Officer Jiang's mind flashed with President Wang's face, which was somewhat helpless but extremely confident, and he took a deep breath.

Although he didn't know how Mr. Wang planned to cover the bottom line, he believed that the elegant and easy-going general manager must have a comprehensive plan...

(End of this chapter)