Elmi smiled at her, clearly satisfied with this consultant.
Lu Feng smiled as he looked at the phone in his hand. He had expected this outcome. It was already May, and Lu Feng didn't have much time to waste with them.
There's a whole bunch of other things to do.
There was a knock on the office door, and a clerk walked in and said, "Mr. Lu, the finance meeting is about to start at ten o'clock."
"I almost forgot." Lu Feng stood up and walked towards the door.
Inside the conference room, more than thirty people sat at desks, led by the group's vice president, Bao Gan, an old man who was almost sixty years old this year. He used to be the general manager of the Agricultural Bank of China and was absolutely top-notch in the country in terms of finance, taxation, risk management, and investment.
However, after a year at Jiafeng Electronics, he also had a headache. No matter what any department said, Lu Feng ignored it all. Other departments were fine, at most they would say that the project was losing money or making a profit. But the finance department was short of money, and the whole group couldn't stand it.
Lu Feng walked in and plopped down in a chair, saying, "Let's get started. The first half of the year is almost over. How's our finances?"
"Mr. Lu, let me first report to you on the group's various expenditures in the first half of the year, especially the increase in expenditures on business banquets, reimbursements, business trips, and training..."
"Stop, stop, stop!" Lu Feng knew the old man was about to yell at him again. Ever since General Manager Bao took charge of finance, the finance department had been in complete chaos. Asking for money was like asking for his life, and many department heads were calling to complain about their accounts.
"There's no need to go into those details. What's the overall situation?" Lu Feng asked.
"We received too much support in the first half of the year. Without last year's financing, we might not have been able to survive. In the first five months of this year, the total expenditure was 1.76 billion yuan. The largest expenditure was the acquisition of Ruixin Laboratory. The remaining expenditures were the budget for the construction of the group headquarters building, the investment in the new Tianjin plant, plus employee salaries, taxes, and daily expenses."
Mr. Bao raised his wrinkled eyelids, glanced at Lu Feng with his cloudy eyes, and said, "Weipuda's sales in the first half of this year were so-so, relying entirely on VCDs to keep going. Pager sales were good, but they've only just begun. So the estimated loss for the first half of the year is around 800 million. The reason we can still keep going is that I've transferred all these losses to the distributors and suppliers. We give them IOUs, and we have cash on hand."
"That's very good. The financial pressure shouldn't be borne by our alone. Since we've chosen to join Jiafeng Electronics, we should face the challenges and pressures together." Lu Feng then asked General Manager Bao, "What's the overall profit forecast for this year?"
profit?
The finance executives present didn't dare look at Lu Feng. The boss was still thinking about making a profit. That was a hole of more than 800 million yuan. Making 800 million yuan in revenue was a piece of cake for them, but 800 million yuan in net profit was really going to kill them, unless the sales of Weipuda and Jiaxun pagers continued to surge in the second half of the year.
Otherwise, the shortfall of over 800 million will increase, because advertising, marketing, and some supplier payments need to be settled in the second half of the year.
There was a moment of silence. Mr. Bao coughed and said, "Mr. Lu, we expect to make a profit of less than one billion this year. We had a meeting with Mr. Wei a few days ago. Given the current situation of the group, it is best to maintain the market and not to take any other expansion actions. It will only take one year to make the debt problem less prominent, and the company will be in a much better position within three years."
"So you're saying you're fucking broke again, right?" Lu Feng frowned and rubbed his face.
"President Lu, a business is just like an ordinary person's life. Money needs to be saved up. If you take money from outside and spend it all at once, people outside will definitely say something."
Mr. Bao was being very polite. In his analogy, Lu Feng was a spendthrift who borrowed money from outside and then spent it on extravagant spending and buying all sorts of things.
“If we don’t expand now, the biggest expense will be employee salaries. The monthly salary expenditure alone is 40 million, which is close to 80,000 people. If we cut 100 yuan from each of them, we can save 8 million yuan every month. Besides, an average salary of 400 yuan is already very high. We pay our employees almost 100% more than the market average.” Boss Bao expressed his thoughts to Lu Feng.
“On average, it’s five hundred dollars per person. I still have to squeeze out one hundred dollars, and then every month there are eighty thousand people bowing their heads and cursing my ancestors for eighteen generations.” Lu Feng leaned back in his chair and pondered, “If I go to Hong Kong and bring back a billion or eighty million, at most three or five people will curse my ancestors for eighteen generations. Boss Bao, the method you gave me is not cost-effective at all!”
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