Chapter 199 - Becoming a shareholder (1)
Lao Zhang’s business had gotten busier and busier and his factory alone wasn’t enough to keep up with the orders. He had subsequently outsourced them to three other factories and was still barely able to keep up.
He had invited Shu Yan over today to talk about increasing the production of the factory.
“When I started my business, I was very ambitious. Take Lao He for example, he only rented a small factory when he started but I rented two right away. Business was good back then so when the other place next to me was up for rent, I rented it too, but it had been left vacant this entire time. I planned to clean up the area and fill it with machines. Outsourcing is not a sustainable solution. Boss Shu, take a look at this place, it can hold 30 machines with no problem. The other place can hold up to 40. With 70 more machines, we won"t have to outsource our work anymore.” Lao Zhang showed Shu Yan two empty factory lots that had already been cleaned out. Apparently, he had been thinking about this for a while now.
Shu Yan was speechless. She wasn’t an ambitious one herself. All she wanted to do was to make some money and buy a few sets of houses. Somehow all of her partners were ambitious ones.
“What happen last month was phenomenal as we were the only company churning them out. Now that we are seeing more and more fall sets on the market, our orders will begin to decrease.” What Shu Yan meant was their investment would be too huge.
That was Ye Shuqin’s thought as well. “I feel that Shu Yan is right. Let’s just do one for now. We can add 30 machines first. If businesses are still strong next year, we will then open up the other one.”
“One machine costs 600 yuan, 70 of them comes out to be 42,000 yuan. I feel that it’s not that big of an investment.” Lao Zhang was reluctant to give up on his idea.
Shu Yan thought it’d cost hundreds of thousands. In that case, Lao Zhang was correct in that the investment was not that huge. She was just about to go along with it when Ye Shuqin sneered and revealed what Lao Zhang did not share initially.
“You are right that sewing machines aren’t expensive. But we will also need industrial size ironing machine, cutting beds, electric cutters, and steaming machines. All said and done they will cost upward of 200,000 yuan.”
Shu Yan was not an expert in this area. The list of all sorts of machines baffled her. She looked up at Lao Zhang who had his head lowered.
“I think we should play it safe.” Shu Yan suggested. “Or maybe you can look for second-hand machines? Those that are most new. They should be cheaper than brand-new ones, right?”
“I agree with Lao Zhang’s idea of expanding this time before there is a factory that is going out of business and we plan to buy all of their equipment from them. We have went and taken a look at them, they were like new condition and they are willing to part with them with a 60% discount,” said Ye Shuqin happily.
“That sounds great. I don’t know much about this area so I will leave that up to the two of you,” said Shu Yan with a smile.
“Well, we’ve asked you here because there is something else that we want to talk to you about. We are thinking that, since we will be expanding, would you like to become part owner?”
Shu Yan was surprised. She thought they wanted her out, not to invite her to join.
“No, that won’t be necessary. As I have mentioned previously, my friend and I had started our own brand and we will be setting up our own factory as well. Over here is the hard work between you and your right. I barely contributed anything. I already feel bad enough just sitting around and collecting my share of the money.” Shu Yan gave it a little thought and said, “Why don’t we do this? Let’s keep our partnership till the end of the year, then you can have the business all to yourself.”
Since they have started working together, they had already produced close to 30,000 sets of clothes. Shu Yan’s initial investment had been recovered a long time ago and everything else was pure profit right now.
Subtracting rent, utilities, wages, and other miscellaneous items, one set of clothes could bring in 4 yuan of profit. They have made close to 1.2 million yuan to date. It was still two more months till year end. As there had been more companies making the fall sets, their income had shrunk relatively speaking but they should still be looking at 700,000 ~ 800,000 yuan. By year end, Shu Yan could receive another 1 million yuan or so. That was not a small amount and Shu Yan was already quite happy with that.