Xia Xiaolan planned to use Zhou Cheng’s 170,000 in the bank to increase her investment in Luna.
Luna needed promotion funds for expansion. Initially, Chen Xiliang and Zhou Cheng each invested 200,000, totaling only 400,000 for the brand, leaving Chen Xiliang’s funds tight.
If Luna had money in its accounts, Xia Xiaolan and Chen Xiliang wouldn’t have to shamelessly cling to Wang Mingming, riding on his popularity.
With additional investment, Chen Xiliang could formally negotiate with Wang Mingming’s agent, offering payment for Luna advertisements. If his price was too high, they could simply spend the money on television advertising instead.
One Shi Jia incident made Xia Xiaolan seriously consider the differences between her and Zhou Cheng.
Though she and Zhou Cheng might not need to break up, she no longer wanted to mix their finances.
It was better to keep things separate. Luna should be independent. Even without Xia Xiaolan as advisor, with Chen Xiliang’s abilities, it would just develop more slowly. Zhou Cheng’s investment in Luna, while not completely risk-free, had a high potential for rapid appreciation.
No investment was safe – even bank deposits faced depreciation, and some banks could go bankrupt. Who could you complain to then?
With Xia Xiaolan’s foresight, besides real estate investment, she couldn’t guarantee profits in other industries either!
Zhou Cheng already owned enough properties, and as someone seeking advancement in his workplace, owning too many houses wasn’t appropriate.
Seeing Liu Yong didn’t ask why she invested 100,000 less than agreed, Xia Xiaolan felt relieved.
Liu Yong, unaware of her conflict with Zhou Cheng, thought she felt guilty about not raising enough money.
“Why worry about that? You won’t get less profit. You should invest less capital anyway, considering your design costs!”
Liu Yong knew winning the South Sea Hotel project was entirely due to Xia Xiaolan’s merit.
Without her, Tang Hongen wouldn’t have known Liu Yong from anyone else. Tang Hongen let Yuanhui participate not because he trusted their capability, but because he knew Xiaolan would oversee everything.
Tang Hongen was the catalyst, but Xiaolan’s “infinity pool” concept secured Yuanhui’s design approval.
Even earlier, it was Xia Xiaolan who boldly suggested not limiting their thinking to the 16 million budget. Without her proposing the new 30 million budget plan, Dongfeng Holdings wouldn’t have succeeded with any modifications by anyone else.
Liu Yong believed Xia Xiaolan had contributed greatly to the project. She didn’t need to supervise the construction site daily; just having her support in the background gave him confidence.
What difference did 700,000 or 800,000 make?
This project was theirs together – profits would naturally be split equally!
Xia Xiaolan didn’t know whether to laugh or cry, “Uncle, even close siblings need clear accounts. I can’t take advantage of you like this.”
Liu Yong wouldn’t listen, “I’m not your brother, I’m your uncle, so you must listen to me. It’s settled!”
Liu Yong shooed her away like a fly to handle her own business, threatening to get angry if she mentioned money again.
Xia Xiaolan decided to check on Anjia Building Materials’ new store instead.
The building materials store had distributed dividends before Spring Festival, but none in the five months until mid-July, as shareholders had agreed to invest these months’ profits into the new store.
When Xia Xiaolan arrived in Pengcheng, Bai Zhenzhu showed her the books. From February to June 30th, 1985, the store in the small commodities market had total building materials sales of 1.97 million, calculating at 30% gross profit meant 590,000 in earnings.
Net profit wasn’t that high, especially since nearly a million was for Yuanhui’s orders, which couldn’t be calculated at 30% profit. After deducting various losses and costs, the profit was around 400,000.
Originally, everyone expected the store’s annual turnover to exceed 2 million.
Achieving this goal in just 5 months was mainly due to Yuanhui taking on the South Sea Hotel renovation – the store’s turnover relied entirely on this big order.
Bai Zhenzhu’s books only went up to July 1st, not including all of Yuanhui’s future material needs.
“There’s at least 2 million more in materials to go through the store’s accounts. We’ve discounted Yuanhui’s orders, so we won’t make a 30% profit, but the volume is so large that even at 15% or 10%, the profit is still considerable.”
In thirty years, renovation market labor and materials would cost the same.
A carpenter’s daily wage would be several hundred yuan, the same for other skilled workers.
A regular three-bedroom apartment renovation costing 200,000-300,000 would include several tens of thousands in labor, making up a high proportion of total costs.
But in 1985, even paying workers over ten yuan daily, with dozens working simultaneously under Liu Yong, averaging 500 yuan monthly per worker, the South Sea Hotel’s five-month renovation would cost Liu Yong only 25,000 in wages. Even with 100 workers, the five-month project would need just over 200,000 – compared to the 7.5 million total budget, 200,000 in wages was negligible.
Not even loose change.
The budget mainly calculated material costs.
How much cement, tiles, timber… Anjia Building Materials could supply some materials, while others like cement had to be bought elsewhere. Even so, the South Sea Hotel renovation would bring the store over 3 million in turnover this year.
Even at 15% profit, that was 450,000.
One project sustained not just Liu Yong’s renovation company but also the building materials store.
Originally, everyone expected the store to earn just 200,000 for branch expansion in half a year.
Now with the South Sea Hotel renovation project falling from the sky, ordering millions in materials brought Anjia over 100,000 extra profit, explaining why Anjia had 400,000 profit in just five months.
With profits exceeding expectations, Anjia had more funds for the new store.
Xia Xiaolan smiled genuinely at the almost-finished new store.
“By year-end, we shareholders should have a big dividend distribution.”
Her goal of earning her first million this year now seemed conservative.
Xia Xiaolan now had three lines of business: Blue Phoenix, South Sea Hotel, and the building materials store. Blue Phoenix seemed modest but had a stable monthly cash flow. With the expansion to five stores and effective management, clothing sales alone could bring several hundred thousand to nearly a million in annual income.
The South Sea Hotel project would bring several hundred thousand in profit upon completion.
The building materials store hadn’t distributed money in the first half, but with both stores firing on all cylinders in the second half, Xia Xiaolan’s 25% share would bring considerable returns.
From 1983 to late 1985, Xiaolan’s foundation-building was two and a half years after rebirth.
1986 should see explosive income growth… Xia Xiaolan wiped her nonexistent drool:
“Sister Bai, you say the new store opens August 1st? I don’t think we need to wait that long. I’ll call Kang Wei to Pengcheng – who wouldn’t want to start making money sooner?”