Li Shi and Che Rong were both very satisfied with Starbird Fitness’s current situation.
Actually, after Dream Venture Capital invested in Starbird Fitness, the control that investors including Li Shi had over Starbird Fitness had somewhat decreased. Che Rong, as the owner of Starbird Fitness, actually had strong autonomy.
But Che Rong still made a habit of frequently reporting to Li Shi and listening to some suggestions from him.
Because Che Rong knew very clearly that Starbird Fitness’s current success wasn’t just because Li Shi had provided money, but more importantly, Li Shi had pointed out a clear path for him!
If he hadn’t followed Li Shi’s advice to completely transform Starbird Fitness’s business model with smart fitness clothes racks, finding his own position in the gap between Slackin’ Internet Café and Tuoguan Fitness—these two Tenda industries—and hitching a ride on the fast lane created by Tenda, then even with investment, Starbird Fitness couldn’t have developed so well.
After all, there was a difference between giving someone a fish and teaching them how to fish. Investing money only helped Starbird Fitness temporarily overcome difficulties, but to truly develop and grow, a profitable business model was essential.
The two men silently drank tea for a while.
After some consideration, Che Rong said: “Mr. Li, I have another question I’d like to ask.”
“Now Starbird Fitness has gone through a period of rapid development, and stores have quickly opened in other cities in Handong Province.”
“Do you think Starbird Fitness should continue burning money to expand, or should we pause for a while and focus on making a profit first?”
Currently, Starbird Fitness wasn’t profitable. Although it was making money, and other investors were continuously investing, wanting to get a piece of the pie, during the high-speed expansion phase of the business, all the money was being used to open new branches.
Initially, Che Rong could be described as ambitious, first renovating all the stores, then opening more stores in Jingzhou, and even expanding to other cities in Handong Province.
But now, after the stores had expanded to a certain scale, Che Rong naturally developed a sense of weariness.
He wanted to rest a bit and make money while lying down.
After all, from Che Rong’s perspective, being able to secure so much investment and open branches throughout Handong Province was already a great success for a gym.
Many gym owners who had just opened a few chain stores in one city were already making money while lying down, let alone Starbird Fitness in its current state?
Che Rong could peacefully enjoy his fortune, and the investors could quickly get returns.
Resting on one’s laurels might seem unambitious, but it was stable; continuing to expand might seem enterprising, but what if it failed?
With blind expansion, once the capital chain broke, there might be a complete failure, and one couldn’t expect a miracle of resurrection to happen twice.
So Che Rong was conflicted about this. He himself was hesitant, so he wanted Li Shi to help make the decision.
Li Shi frowned slightly and put down his teacup.
“How can you hesitate on this issue? Of course, you should continue to expand!”
“This isn’t a question of courage; it’s purely a matter of vision.”
“The fact that you’re asking this shows that you completely misunderstand the situation. You’re short-sighted!”
Che Rong felt somewhat ashamed: “Mr. Li, I really don’t have much experience in entrepreneurship. At most, I just have some insights into managing a gym. So please give me some guidance.”
Li Shi nodded. He also knew that Che Rong wasn’t very good at this aspect; otherwise, Starbird Fitness wouldn’t have been on the brink of bankruptcy before.
An ordinary person couldn’t suddenly become enlightened and transform into a business genius like Mr. Pei, so this was where Li Shi needed to provide more guidance.
“You want to stop expanding, which, at its root, is because you’re afraid of risks, right?”
“Talk of short-term benefits or long-term benefits is all empty. If expansion would definitely succeed and definitely make more money in the future, even a fool would choose to continue expanding.”
Che Rong nodded: “Yes, that’s the principle.”
On the surface, he was tired and didn’t want to struggle anymore, but in reality, it was because he felt that continuing to struggle had too low a cost-performance ratio—the risks undertaken and efforts made were too disproportionate compared to the possible returns.
Li Shi continued: “But if you just look more at Tenda’s business model and Mr. Pei’s way of doing things, you’ll know that the benefits of Starbird Fitness continuing to expand far outweigh the risks. The chance of failure is actually very low!”
While drinking tea, he began to provide Che Rong with a more detailed analysis based on the actual situation of Tenda’s various industries.
First, Dream Venture Capital’s model was to withdraw investment once the invested company reached a certain level of profitability, but if the company wasn’t profitable, they would continue to invest.
Regardless of what other companies might think, for Starbird Fitness, this was an encouragement to expand!
The message was: if you maintain your ambition and continuously expand, we’ll keep investing in you; if you think you’ve opened enough stores and want to become complacent, then we’ll part ways.
In other words, if you maintain your enterprising spirit, we’ll always be friends; if you want to settle for comfort, take your previous earnings and enjoy yourself, but I’ll continue moving forward.
Dream Venture Capital would take this money and continue to invest in the next company that was willing to strive forward.
Wasn’t the attitude clear enough?
Even from the most utilitarian perspective, continuing to expand could secure ongoing financial support from Dream Venture Capital. Wasn’t that attractive?
Giving up expansion essentially meant giving up Dream Venture Capital’s financial support, as well as Tenda’s protection and Mr. Pei’s friendship!
Secondly, wanting to stop expansion was mainly due to fear of risks.
But for Starbird Fitness, this risk was actually very low.
Because Starbird Fitness’s business model had already been validated in Jingzhou and even throughout Handong Province, showing that consumers approved of it.
Slackin’ Internet Café, Slackin’ Takeout, Tuoguan Fitness, and other Tenda industries all followed the pattern of first Jingzhou, then Handong Province, and finally expanding nationwide. This route had been taken countless times, and all had succeeded.
Starbird Fitness following this same path would be steady!
Moreover, the preliminary work of site selection, promotion, and market development had already been completed by Tenda’s stores. Starbird Fitness had it easy—they could simply open new stores around Tenda’s industries when entering new cities. How simple was that?
As long as they stuck close to Tenda’s trail, there was no fear of stepping into any pitfall!
Given Mr. Pei’s layout ability and his extremely high success rate in entrepreneurship, Starbird Fitness would win just by following behind and cheering, as long as they weren’t too stupid.
That being the case, what reason was there not to continue expanding?
In business, it was like rowing against the current—not advancing meant falling behind.
If Starbird Fitness didn’t expand with Tenda, other companies would naturally see this business opportunity and find ways to squeeze Starbird Fitness out.
Would Mr. Pei care too much about a company without ambition at that time? Would he be sentimental with a boss who lacked ambition?
That was hard to say.
Li Shi took another sip of tea and finally concluded: “So, from any perspective, Starbird Fitness must closely follow Tenda’s footsteps and continuously expand until it opens nationwide along with Slackin’ Internet Café, Slackin’ Takeout, and other industries.”
Che Rong had a sudden realization and nodded: “I see, I understand now!”
“Mr. Li, your explanation has really opened my eyes.”
“So you’re saying that not only from an objective conditions standpoint should Starbird Fitness expand, but Mr. Pei is actually encouraging Starbird Fitness to continue expanding?”
Li Shi nodded: “Of course! Otherwise, why do you think Mr. Pei specifically instructed Dream Venture Capital to invest here? Projects that Mr. Pei favors definitely have their unique merits!”
“Mr. Pei favors your project, but you don’t think about making it bigger and just want to make a little money. Do you think Mr. Pei would be happy about that?”
Che Rong hurriedly nodded: “I understand, I understand! Then I don’t have anything to be conflicted about. I’ll definitely work together with Mr. Pei to try to open Starbird Fitness nationwide!”
Seeing Che Rong being so receptive, Li Shi couldn’t help but nod slightly.
It didn’t matter if he didn’t understand at first; as long as he could be reasoned with and could closely surround Tenda, this entrepreneur still had hope.
Li Shi drank his tea and suddenly thought of another issue.
“By the way, I have a project here. Would you like to get involved?”
Che Rong perked up: “Oh? What project?”
In Jingzhou’s investment circle, if Mr. Pei was the lofty god, then Mr. Li was the person closest to that god.
A project mentioned by Mr. Li must be a good project!
Li Shi calmly said: “Thrill Lodge’s roller coaster project.”
Che Rong was stunned for a moment: “Huh?”
“This… I probably can’t get involved, can I? Thrill Lodge is Tenda’s industry. Even if others wanted to intervene, they couldn’t possibly get in, right?”
Li Shi shook his head slightly: “This is where you’re uninformed. Although you can’t directly intervene in the Thrill Lodge project, you can participate indirectly.”
“The restaurants, shops, and hotels around Thrill Lodge are actually funded by me and other investors, and now they’re doing very well.”
“Recently, Mr. Pei lavishly spent over 100 million on building an indoor roller coaster at Thrill Lodge.”
“Chen Kangtuo, the person in charge of Thrill Lodge, just contacted me at noon today. He said this roller coaster would officially open at the end of the month, but there’s no promotional budget. So he hopes that we investors can help out more with the promotion.”
Che Rong listened with confusion: “Huh? This sounds like extortion, doesn’t it?”
Li Shi’s mouth twitched slightly: “What are you saying?!”
“Thrill Lodge is a project where Tenda Group invested over 100 million. If they really needed a promotional budget, would Mr. Pei not provide it?”
“Do you believe Chen Kangtuo when he says there’s no promotional budget?”
“Clearly, it’s not that Mr. Pei is unwilling to provide a promotional budget, but rather he’s giving us a hint, wanting to share benefits with us!”
Che Rong blinked, his face full of confusion.
Did he hear that correctly?
The person in charge of Thrill Lodge came over asking investors to provide promotional funds for the roller coaster—wasn’t that just asking for money? How did this turn into sharing benefits?
Mr. Li, are you sure your thought process isn’t problematic?