Rebirth begins with studying hard

Chapter 38 I'm Willing to Partner

Xie Bai already regarded Lu Jie as one of the few people in Feicheng he could talk to.

Without hiding anything, he started counting on his fingers:

"Don't let the small size of my store fool you, the monthly rent is close to 50,000."

"Besides myself, there are four other employees in the store, and the labor cost is close to 20,000 yuan per month."

"Business is not good, but refrigerators, air conditioners and ice makers cannot be shut off. Now the monthly water and electricity costs are close to 10,000 yuan."

"I try to keep other miscellaneous expenses to two or three thousand, but they are still unavoidable."

"Now the daily turnover is only two thousand. The store is too small and the material purchase price is actually quite high. The gross profit can barely reach 70%, and the monthly gross profit is only forty thousand."

"The gross profit can't even cover the monthly rent."

"Forget about breaking even, I still have to invest another 40,000 to 50,000 yuan into the store every month."

"Since the opening, I have invested nearly 300,000 yuan."

"But there is no prospect of improvement at present."

At that time, the housing price in Feicheng was only three or four thousand yuan per square meter. This amount of 300,000 yuan could buy a house, which was indeed not a small amount of money.

Losing the equivalent of a house in just a few months is indeed a painful experience.

But Lu Jie knew that this was only half the loss; in his previous life, Kafka's peak loss was about 70.

To truly turn a profit, we need to persevere until the end of the year, let word-of-mouth spread, and as the weather gets colder, more people will drink hot milk tea, and things will gradually change.

Although a loss of 700,000 is a lot, it's really just a drop in the ocean compared to a future annual profit of over 100 million.

After thinking for a moment, he replied:

"I think it would be a real shame to give up."

"Moreover, Kafka's milk tea is really delicious, and I believe the business will gradually improve in the future."

Hearing about the customer's satisfaction and spending, Xie Bai felt somewhat gratified, and he forced a smile:

"Thank you for your appreciation of Kafka."

"Without your support, I might not have made it this far."

He was still somewhat worried: "But it's not enough."

He then looked at Lu Jie and asked, "What do you think about me lowering the price to five yuan?"

He had been thinking about this matter but hadn't made up his mind. Since the topic had come up, he decided to ask Lu Jie for his opinion.

Lu Jie knew that Kafka had never lowered its prices, so lowering prices would definitely not be Xie Bai's choice. He shook his head and said in agreement:

"Although seven yuan is a high price, it is reasonable compared to the subway."

"If it goes any lower, the gross profit margin will fall below the industry standard for tea drinks, and that will cause problems."

"Even if the number of cups increases in the short term, which may lead to an increase in turnover, profits may not necessarily improve."

"This method is like drinking poison to quench thirst; I personally do not recommend it."

This is also his true thought.

Although seven yuan was a bit high in Feicheng in 08, it wasn't actually that high among chain tea drink brands.

If it goes any lower, the quality will be compromised.

These words struck a chord with Xie Bai, who nodded in agreement: "Yes, price cuts are a slow poison."

He sighed again, "It's gone down, so things might get better, but problems will definitely arise later."

"But if we don't lower the price... I'm afraid..."

His biggest fear was that the business would have to close down before the summer vacation was over.

But he never said it aloud.

Lu Jie then paused for a moment before speaking:

"I think Kafka's products are quite good, I like them very much."

"I believe the difficulties are only temporary, and things will definitely get better after we get through this difficult time."

"It would be such a shame to give up like this."

"Yes, we can't give up..." Xie Bai nodded and murmured, as if responding to Lu Jie, or as if speaking to himself.

Lu Jie smoothly picked up the conversation and got to the point: "Brother Bai, are the store's funds... a bit tight right now?"

Xie Bai didn't hide anything: "Based on the current situation, my current funds can only last until the end of August at most."

"If I want to keep going, I'll have to borrow money..."

Lu Jie continued step by step, "Have you considered allowing others to invest or increasing the capital?"

Shepherd chuckled self-deprecatingly: "I have thought about it, but who would be willing to invest in a startup brand like Kafka?"

"And it's a store that's losing money."

"Even my friends..."

"I do," Lu Jie said earnestly.

Xie Bai was stunned for a moment.

"I really like Kafka's products, I'm optimistic about Kafka's future development, and I believe that Kafka will gradually grow and get better under your guidance, Brother Bai."

"I happen to have some savings, which should be able to help Kafka get through some time."

Xie Bai was deeply moved.

Although he didn't think Lu Jie, as a high school student, could have much money, even if his family was well-off and he had a lot of pocket money and New Year's money, he would at most have ten or twenty thousand yuan in savings.

Compared to what he needs, it's a drop in the ocean.

But Lu Jie's statement is both an endorsement of Kafka and an endorsement of him.

This attitude is very valuable.

"Young man, thank you for recognizing Kafka."

"But to keep the store running, you actually need a lot of money; ten or twenty thousand won't solve the problem."

"Besides, the risk is too high, I can't let you take that risk."

Lu Jie chuckled; he realized he'd been underestimated.

"Is 200,000 enough for the initial payment?"

Xie Bai was stunned for a moment.

He thought he had misheard: "How much?!"

Lu Jie continued, "In the first phase, I can invest 200,000 yuan into the store, which will serve as equity capital."

"If subsequent stores continue to incur losses, I can at least cover half of the amount."

"With this and your funds, Brother Bai, we should be able to support the store until the Spring Festival."

"No matter what, let's at least hold on for a year."

"I believe the store will definitely recover within a year."

Xie Bai's eyes widened.

After a quick mental calculation, he was shocked.

That must be five or six hundred thousand, right? He has that much money?!

He asked somewhat uncertainly, "Is this what your parents wanted?"

Lu Jie shook his head: "It has nothing to do with my family."

He knew why Xie Bai asked that question; after all, it was indeed hard to believe that a high school student could casually say he could come up with hundreds of thousands of dollars.

He explained, "I wrote a novel online and earned some royalties. This is money I earned personally, and I have absolute rights to use it."

"My book is currently being serialized, and I will continue to receive some royalties every month in the future."

"We can provide support to the stores for a period of time."

Xie Bai was still somewhat incredulous. Could writing novels online really earn so much money?

In his mind, online novels are not something to be written for fun.

But Lu Jie spoke very seriously, and it didn't seem like he was faking it.

Perhaps Lu Jie just happened to be noticed by a bookseller, so they paid him to buy out the copyright.

There was some merit to it, so he didn't ask any more questions.

After praising him with "Amazing!", he began to ponder.

He was interested in Lu Jie's suggestion to invest in Kafka.

The most important reason is that Kafka couldn't have survived on his own savings alone.

To keep going, you either need to borrow money or find partners.

He could borrow money, but it was a bottomless pit, and he had no idea how much he needed to borrow to get by.

Bringing people in as partners is actually more suitable, as it can bring in capital, share risks, and allow for mutual consultation in case of problems.

It's not like he has to handle everything by himself.

The right partner is crucial; you need a suitable partner.

Having money and being willing to invest are just the basics.

It also has to align with his ideals. In case Kafka really overcomes the difficulties, we can't let ideological differences lead to internal strife.

Special stores require not only an initial investment of 200,000, but also long-term losses in the future.

Even if the investment is only made until the end of the year, Lu Jie would probably need to come up with an estimated amount of five or six hundred thousand yuan.

The 500,000 to 600,000 yuan accounts for nearly 40% of the store's total funds.

If Lu Jie is truly willing to continue investing, then this amount will continue to accumulate, and the proportion of his investment will become larger and larger.

It will continue to approach 50%.

At that time, it was equivalent to Kafka having two shareholders with the same share.

Lu Jie's current understanding of the tea beverage industry is above average and can meet Kafka's development needs in Feicheng.

However, the tea beverage industry in Feicheng is lagging behind, and it will definitely undergo significant changes in the future.

Lu Jie is too young, and his future personality changes are unpredictable.

If they are willing to continue learning and keep up with the development of the tea beverage industry, that's fine. But if they are unwilling to learn and fail to keep up with the development, and continue to interfere with Kafka, then the company will definitely fall into turmoil in the future.

There are significant hidden dangers.

But without Lu Jie's funding, Kafka might not even be able to survive now.

He was conflicted.

Lu Jie was unaware of Xie Bai's thoughts, but he did not urge Xie Bai, since a partnership was a big deal and definitely needed to be carefully considered.

Just then, a shop assistant who was about to change shifts overheard Lu Jie mentioning writing novels online, and asked out of curiosity:

"What's the name of your novel?"

"I also quite enjoy reading online novels, and I might have even read one of your books."