Liu Shitang understood the difficulties of obtaining startup loans for new enterprises better than Liu Jun. Although he had confidently assured his son that private lending could be secured once the factory shell was erected, while it was possible, when exactly it would be possible was something Liu Shitang couldn’t pin down. His loan negotiations with those old friends of his were arduous and infuriating. This made Qian Hongming’s unconditional help in planning three million in startup capital all the more precious. Only now did Liu Shitang begin to believe that Qian Hongming truly had some friendship with his son.
It was precisely because of the startup capital provided by Qian Hongming that Tengfei could rapidly expand its business, achieving what Liu Jun considered painfully low profit margins but what other manufacturing peers viewed as enormous profits. Lenders began actively seeking out Liu Shitang. Even though Liu Shitang had been navigating society for so many years, this was his first time personally experiencing the power of private capital – so many people commissioned acquaintances to get to know Liu Shitang, opening conversations by guaranteeing ten to twenty million in funds would arrive in one lump sum within three days, with only the interest rate needing negotiation.
Liu Jun accompanied his father to upscale hotels to hear negotiations. When he heard the borrowing interest rates, he wondered aloud: “With such high interest rates, what manufacturing enterprise would dare to borrow?”
“Your profit margins can afford it,” the lender replied without much small talk, quite composed.
“That might work for short-term cash flow adjustments, but long-term… wouldn’t we just be working for the interest? Even if we can afford it, we shouldn’t borrow – manufacturing enterprises can’t take high-interest loans.”
The lender still smiled: “We’re not loan sharks – we have good financial credentials. But let’s speak frankly – we don’t expect you to borrow from us long-term either. Once you take our money and spend three months making large deposits and withdrawals at banks several times, the banks will have already poached quality customers like you – where would that leave us? We only do short-term loans with you, and you only need three months anyway.”
“You should already understand our Tengfei – our products have market demand, so your risk cost in lending to us is low, and we need long-term loans. Why won’t you consider lowering the interest to get stable returns?”
“The risk cost of lending to you is indeed low, but the social risk cost of doing our business remains high.” The lender smiled warmly, was thoroughly courteous, and quoted classics, but just wouldn’t agree to lower the interest by even a fraction.
Liu Jun tried both soft persuasion and hard bargaining with the lender, hoping to trade loan duration for interest concessions. The lender finally relented, planning to go home and discuss with friends before giving Liu Jun an answer. Liu Jun knew his financial statements couldn’t yet meet bank approval standards – at this time, he could only rely on advance payments and borrowing to get through the transition period. His psychological price point was the interest equivalent to the costs Qian Hongming needed for managing that three million.
When Liu Jun mentioned this to Qian Hongming that evening, Qian Hongming was very understanding of the lender’s situation. He told Liu Jun, “Right now, there are small and medium private enterprises everywhere that can’t get even a ray of light from banks, so where does their working capital come from? They can only borrow from individuals. There are two ways to borrow from individuals – one is to directly borrow from relatives and friends, paying ten-plus percent annual interest. This method is not only exhausting but also doesn’t yield much, and while borrowing, you also rack up a mountain of personal debts. You have to visit those relatives and friends every New Year and holiday to pay respects, apologize with smiles, and give gifts. When you calculate the total cost, the interest won’t be low either. The other method is to borrow from people who specialize in this kind of private lending, having them raise money for you. Think about their fundraising costs and risk costs, then calculate whether the interest they’re giving you is high.”
“Their pricing is reasonable, but I can’t afford it. If I borrow from them, I expand my scale but can’t increase asset accumulation…”
“Once scale goes up, doesn’t that mean high volume, low margins? After scale increases, won’t banks look more favorably on you?”
“But what’s the use of scale increasing this way? R&D investment percentage will have to drop, and the product’s technological value-added will decrease. Employee training can’t keep up either.”
“But you have no other choice right now. You only have one path before you – winning bank favor.”
Liu Jun closed his eyes and calculated for a while, then said: “Without keeping up with R&D, how can scale increase? The market is limited.”
Qian Hongming hadn’t thought of this problem. He mused that manufacturing factories had more complicated troubles than his trading company – no wonder Liu Jun was practically nailed to the factory every day, only having time to come out on weekend evenings. “Are you saying the loan interest might still be reducible? How much do you estimate they could lower it for you?”
“Two point five to two point eight percent. I hope to get it down to two point five percent.”
Qian Hongming was amazed. “How do they manage it? Have you asked them about their funding channels?”
Liu Jun couldn’t say much because the other party absolutely wouldn’t reveal their clearest fundraising channels to Liu Jun. Qian Hongming thought and calculated, shaking a glass of beer until all the foam was gone and the taste extremely bitter, before saying: “It looks like simple letter of credit operations won’t work – we’ll need to find ways to work on exchange rates and import goods price differentials to expand profits. Do you know that as long as that three million doesn’t arrive for even one day, I have to watch exchange rate fluctuations with a pounding heart every day, afraid the final operation results will burden you with high interest? It looks like I need to think of other methods.”
Liu Jun looked at his friend in confusion, thinking there could be other better methods. “Hedge exchange rates in the futures market? But there’s no USD futures trading domestically, right?”
Qian Hongming rubbed his head, frowning: “I need to expand my vision, can’t just circle existing import-export varieties. At least need to move toward bulk commodities.”
“Hongming, don’t… that’s enough, don’t dig for more potential for my sake, can’t add more burden to you. I’ll just borrow from the high-interest lenders for half a year – the bank’s hard requirements should be achievable by then. Besides, I still have advance payments and letters of credit here, can manage for now.”
Qian Hongming nodded, but his heart had already hit a dead end. Like Liu Jun, he enjoyed research, though he focused more on researching numbers. As Liu Jun said, having products doesn’t necessarily mean having markets, and having large sums of money to freely allocate still depends on whether the interest rates are acceptable.
Liu Jun didn’t notice Qian Hongming’s momentary distraction. Having finally escaped the ascetic life for a while to visit the city’s glittering world and hang out at bars, he focused more on the beautiful women coming and going. Qian Hongming watched with amusement as Liu Jun struck up conversations with beautiful women who appeared to be unaccompanied – his courage and skill in this area fell far short of Liu Jun’s. Looking at Liu Jun, his face was truly thick – he brazenly struck up conversations as if nothing was happening, even exchanged business cards. But when Liu Jun finally said goodbye to him alone in the parking lot, Qian Hongming had a good laugh at Liu Jun’s night of fruitless effort.
Liu Jun returned to his place in the city to sleep. Getting up early for a run, he happened to encounter Yang Li’s car rushing out of the garage. Since they’d run into each other, there was no reason not to greet each other. Liu Jun saw Yang Li looking drowsy and teased: “Haven’t had breakfast yet? Where are you rushing off to in such a hurry?”
“Class – MBA courses in the provincial capital. Liu Jun, give me a chance – Mr. Dong keeps saying he wants to pay his respects to you, wants me to arrange an introduction.”
Liu Jun was startled, thinking the two had already been secretly involved, Mr. Dong kept a tight mouth indeed. “Fine, as long as you can make it back tonight, I’ll treat Mr. Dong to dinner tonight.”
“It’s a deal. Ah, I’m running late, sorry, got to go first.” Yang Li hurriedly put on sunglasses and said goodbye to Liu Jun. Liu Jun watched the car’s rear end, thinking – MBA? Should he apply too? He increasingly felt his deficiencies in business management. Only today did he understand that a factory faces endless bizarre incidents every day – incidents so strange that if he hadn’t experienced them personally, he wouldn’t believe them even if told. He was always cramming at the last minute, relying on his small cleverness to handle things seemingly perfectly, but what if there was a problem he couldn’t handle?
Just as he was thinking this, his phone rang. Liu Jun now most feared his phone ringing during non-work hours – a ring meant abnormal incidents had occurred. And the phone ringing at this early morning time, not even past six o’clock, indicated the incident was no small matter. Sure enough, the caller was a police officer from the industrial zone station. While he was flirting with beauties at the bar last night, his workers were more direct – they’d solicited prostitutes and naturally got caught, which was why the police were calling him.
Liu Jun was extremely pained. He bought a pack of fried dumplings by the roadside and hurried to the police station to handle the matter. When he figured out which three workers were caught, Liu Jun was even more frantic – these three were all operators he’d trained from scratch as new workers. With current orders so tight, if these three were detained for several days, how could he survive? Without people to work, the production line would have to shut down. After much pleading, bringing out all the righteous and moral speeches he remembered teachers giving in childhood to show that despite his youth, he was still a leader with integrity and morals, the police station finally showed mercy. After lecturing him extensively on essential employee management knowledge, they fined each person five thousand yuan, and he dragged the three dejected workers out of the police station.
At the car, he scolded the three workers: “Worthless! Three good men, wages already raised considerably, can’t you find proper girlfriends…”
But before Liu Jun could complete his ideological work, the police officer from inside rushed out again: “Manager Liu, please wait, there’s another matter we need to consult you about.” Liu Jun had to send the three dejected men back to the company dormitory and steel himself to return to the police station for more education. This time, it was a different duty officer who had just started work. The officer took out Tengfei Company’s temporary resident registration book, pointed to one person, and asked Liu Jun if he recognized this person and whether this person had any abnormalities.
Liu Jun mixed with workers almost daily and recognized him immediately. “He applied just last month, cautious and careful person, works very hard, but doesn’t fit in well with others. When he has nothing to do, he stays in the dormitory or reads books in the library, very motivated to improve himself.”
The officer made an “oh” sound: “With so many people in your company, you remember them all, or is this person particularly special? Look, do his registered birthplace and age differ from what you’ve observed? Does the photo face match his actual appearance?”
“For employee convenience, we specially bought a camera to take headshots for every employee signing labor contracts, saving employees the trouble of finding time to go to the street for photos and avoiding archived photos with inconsistent specifications. Plus, our administrative department provides one-stop service, handling temporary residence permits and social insurance payments for new employees. Therefore, the photo face is his.” Liu Jun sensed the officer had a reason for this detailed questioning, so he explained the whole process very thoroughly. Seeing the officer nod and smile approvingly, he asked: “Does he have problems?”
“We suspect he’s a fugitive on the Ministry of Public Security’s wanted list. Manager Liu must cooperate with the investigation – having such a person lurking in your company is always a ticking time bomb. Have you spoken with him? Does his accent match the address written on his temporary residence permit?” Seeing Liu Jun looking dazed, the officer smiled reassuringly: “Don’t worry, this person is already like a startled bird.”
“His accent…” Liu Jun looked at the temporary resident registration book, struggling to recall and compare with the accents of his university classmates from all over the country. After thinking for a long time, “Not Jiangxi as written on the temporary residence permit. His real birthplace should be further north, but not Northeast either.”
“Certain?”
“Certain. I once corrected his operational technique, and to ensure accuracy, I had him repeat the operating procedures several times – I’m familiar with his accent. Heavens, could he be a violent criminal?”
The officer didn’t answer, just smiled. After the duty officer went out for a while, he returned with three others. The four together assigned Liu Jun a task – to find a way to lure the employee to an area suitable for capture.
Liu Jun returned to the company almost in a dreamlike state, no longer in the mood to educate the three just retrieved from the station. He never would have imagined that a company of barely a hundred people would harbor a fugitive, and a major criminal at that. The three workers who’d solicited prostitutes thought the boss was angry with them and didn’t dare speak. The whole car rode in silence to the company. Only then did Liu Jun suddenly realize he should tell the three to keep the secret to themselves and not spread this shameful matter around the company. The three naturally had no objections, while Liu Jun’s purpose was to avoid alerting the fugitive that he’d come from the police station.
Liu Jun quietly observed the fugitive. When the time was right, one phone call to the police station brought four officers who arrived quietly and captured the fugitive in one move. They indeed hadn’t caught the wrong person. The entire company was stirred up. After Liu Jun saw off this plague god, he sat in his office reflecting – had recently hiring too many employees to rush production been a mistake? But he couldn’t not expand capacity and hire new people. If Tengfei could smoothly continue developing according to his vision into a large company of hundreds or thousands of people, and if personnel management continued following the current approach, wouldn’t the company face endless problems every day, requiring him to retrieve people from police stations daily? What should he do?
At this moment, Liu Jun was very eager to see Dong Qiyang and looked forward to meeting him.
That evening, Liu Jun and Dong Qiyang both innocently let Yang Li help them introduce each other, even formally exchanged business cards before sitting down to talk. Liu Jun told Dong Qiyang about his police station encounters that day. Dong Qiyang laughed heartily, saying they’d recently also just mobilized the entire local police force. Because their new branch factory was completed and needed to hire several janitors, some unscrupulous agency somehow got wind of the news, spread it around, and collected substantial agency fees. As a result, hundreds of aunties and ladies showed up at the new factory gate that day expecting to apply for jobs. Learning that Shi Yiji had no mass hiring plans and that agency fees couldn’t be recovered, they immediately became agitated and stormed the factory gates. It took two police cars to stabilize the situation. Dong Qiyang told Liu Jun that factories face all sorts of bizarre incidents daily – you can only view them with a positive, detached, game-like attitude. Dong Qiyang even pointed to a scar on his scalp, saying it was from when one of his subordinate employees got fed up with divorce proceedings, and the other party came to the company specifically to beat up the divorcing employee’s supervisor, sending him and two other colleagues to the hospital for multiple stitches.
Liu Jun looked toward Yang Li, only managing to gurgle out: “The company has to handle that too?”
Yang Li said: “I heard from my big… I heard that’s how it is.” Yang Li quickly swallowed the “big brother” that Liu Jun might find very taboo.
“What worries me more about the company isn’t these public security issues. What I most fear is that among all our products going out, some might have oversights that harm downstream users and get exposed by the media. I’m more worried about safety accidents – our workshop deals with high-speed rotating sharp tools daily. Losing other things is manageable, but if someone dies, I’d feel guilty for life. I also worry about the market – we’re in the market like boats going upstream, not advancing means retreating, not a single day for rest or relaxation. People running manufacturing enterprises, even when sleeping at night, have to keep one nerve tightly strung, not daring to turn off phones.”
Yang Li listened carefully to Dong Qiyang’s complete statement before saying to Liu Jun, “Mr. Dong’s experience in production management is much richer than ours. I really would like to see you two meet and exchange ideas amicably – don’t blame me for always pressuring you.”
Dong Qiyang interjected: “You two have a good relationship? Manager Liu, you shouldn’t always refuse ladies.”
Liu Jun quickly said, “No, no, I’ve also admired Mr. Dong for a long time. Mr. Dong, after my product line launches, will the impact on you be significant?”
“Not significant – your product pricing is right there. Unless you nurture your products like sons, but sell them like pigs… but do you have the capital to sell products like pigs? Right now, your psychology wants to sell products you developed, like jewelry, right?”
Liu Jun nodded. “But my products are worth that price and require those costs.”
“Yes, your products are worth jewelry prices, but you’re still constrained by capital. You don’t have the capital to sell them at jewelry prices, you don’t have the capital to outlast those top-tier clients. Right?” Seeing Liu Jun nod, Dong Qiyang smiled slightly.
“Doesn’t that mean neither high nor low works?” Yang Li humbly consulted.
“For new small enterprises, Manager Liu, you’ve done very well. I heard XX has started making contact with you…”
Yang Li kept pondering Dong Qiyang’s assessment of Tengfei Company’s capital situation. She found that if Liu Jun was truly as Dong Qiyang described, he was almost at a dead end, having to survive precariously in the cracks. She watched Liu Jun, noticing he’d lost some weight but still looked very spirited. She couldn’t help but notice Liu Jun’s left ring finger – when Liu Jun used his left hand, that ring finger had to often stuck out in an orchid-finger feminine manner, which she always couldn’t bear to look at closely.
Dong Qiyang observed Yang Li’s behavior with slight amazement in his heart.
During the meal, Liu Jun practically grabbed onto Dong Qiyang for market knowledge consultation. He always felt that having his father aimlessly run around to clients wasn’t the way – the market might need a more comprehensive layout and cultivation. Of course, Dong Qiyang wasn’t a professor and couldn’t teach everything. Liu Jun asked as much as he could, engraving all the words in his heart to slowly ruminate on later.
After the meal, to avoid continuing to face Yang Li, Liu Jun could only return to stay at the company. He said goodbye to Yang Li and Dong Qiyang right in the parking lot. He saw that Yang Xun was driving a Passat for Dong Qiyang. The Yang siblings drove Santanas themselves but gave Dong Qiyang a Passat – he wondered what Dong Qiyang thought about this.
On the way back, Liu Jun reviewed and summarized his entire conversation with Dong Qiyang from the beginning.