Chapter 6: CH006
Lu Fan looked at the report in his hand and felt a headache coming on.
It was not that it was bad, it was just that it was too good.
The financial status of any company has certain rules to follow. Unless of course, we are talking about monopoly.
But a normal statement should have a higher cost of production, the expenses should be costly, and the profits should be moderate, stable, and predictable. But those were all things that Lu Fan's company lacked.
The cost of production was basically ignorable when you look at the income even after Lu Fan went out of his way to give every worker enough salaries, benefits, and funds.
Expenses were nonexistent. It was better to call it Petty Cash.
The profits on the other hand were outrageous. No matter how secretive Lu Fan tried to be, he still had to keep some form of accountability or he might just be called to have tea later.
But the numbers were more like magic than mathematics and accounting.
Who makes a revenue of more than a million yuan off of 10,000 yuan?
Memory sticks were selling like hot cake now and he could see the numbers going up and up with the rise in demand.
It could not be helped.
The Soldering Station had evolved a dozen times by now and it was basically spitting out memory sticks at a frightening speed. It is wrong to call that thing a soldering station anymore.
The first evolution was still understandable. It just became a more mechanized soldering station. All Lu Fan had to do was align parts and control the soldering pins to knit the parts together.
To increase production, he added a delivery method, making it a DIY surface mounting technology machine. This increased his precision and his back did not hurt as much anymore. It was at this point that he moved to the current location.
But who would have imagined that the next upgrade would make the whole thing automated? He just needed to feed in the required material, and the machine would produce a hundred memory sticks at a time.
He did not even need to feed in SD cards, but raw materials for making them. Even the PCB was made like this.
It was insane.
What was even more insane was the demand that had somehow appeared for the memory sticks. It was nothing special except that they were just too high quality for the asking price.
Cheap and reliable, gaining a reputation among the hundreds of fakes and copycats out there.
"Xiaoyun, what do you think?"
"Boss, this is beyond me. I don't know the exact situation but the numbers are very conspicuous."
"Is there a way to 'fix' the records?"
"I can try, but the difference is too big, we are already exaggerating the costs. Not to mention that our suppliers also have records of their own. We can't stand a closer inspection."
"What about the Employee benefits?"
"Boss, we are already giving them a basic salary, 5 insurances, and a housing fund. It is already insane giving this kind of treatment to part-time workers."
"At least the Tax situation is not as complicated. More profit is more tax and the government should be happy."
"That is not necessarily true. If the cake is too fragrant, the officials might want to bring it into the family."
"I know all this, but that is already out of my hands."
"Boss, how about expansion? If the money is in constant circulation, the numbers wouldn't be so jarring."
"Expansion? How?"
"We can start by building a more tangible distribution channel. Since you plan to enter the drone business, we might as well get serious about it. I heard that research and development in this direction is a money pit."
"…"
What could Lu Fan say? That he did not need R&D? Or that it was unreliable when facts were there?
But then again, who said that he had to do the research himself?
"This is a good idea. Since you brought it up, I believe you must have connections. I will leave it to you."
"Sure boss. What about the budget?"
"Just use as much money as you like. You are the CFO and the CEO, so just do whatever."
"… That is not how you run a company."
"You are the one who made it a company. I just hired you to be a receptionist. Who would have thought that you are so nosy?"
"*Sigh* I can't help it."
"Let's not talk about it. I heard that there are many OEMs that are closing down."
"Yes, the production threshold is getting tighter and tighter. Nobody is willing to buy old things anymore."
With the advancement in technology, devices were getting more complicated to produce. There were some that could keep up, but most OEMs were stuck and could hardly keep themselves debt-free.
The machines that they relied on were becoming obsolete and could not even be sold for gains.
The most miserable thing was that replacing them with new machines was insanely expensive and the technical level was high. It was impossible for small foundries to meet this standard.
"Can we buy them?"
"It's not impossible, but this is a big move, do you think our small company can handle so much stock."
"No, I mean, can we buy these OEMs?"
"What?!"
"This is also a path of expansion, no?"
"Indeed, but we have no money. A million yuan might look like a lot, but it may not be enough to buy a machine from a foundry."
"Hmm, that's true. In any case, we can start slowly, call them, and find out who is selling and who wants to buy new machines."
"Don't tell me you want to start making Industrial Machinery? It is not as straightforward as making copycat phones and memory sticks."
"Don't worry, the company is still too small for that. I just want you to start thinking in this direction and start making preparations. You are the one thinking about expanding the company. I think this is the right path. As for distribution channels, let's leave it to a third party for the time being."
If he started handling distribution at this time, what was the point of opening online stores all over the place? Plus, by the time everything was ready, it might be the following fiscal year. By that time, the record would already be tainted and irredeemable.
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