Chapter 34: Maple Forest Company

Ye Feng could wait for another opportunity to open new branches, but registering his company was an urgent matter.

After all, the future expansion and acquisition plans could only continue if they followed a company framework.

Ye Feng’s conversation this time was only to give Zhao Zhen a heads-up and allow him to be mentally prepared.

Then, Zhao Zhen left. He had been away for two days and needed to quickly take over the daily operations of Hedilao.

Ye Feng was starting to feel powerless in this aspect. After all, purchasing, sales, food supplies, and transportation logistics were all interconnected. If anything went wrong, the store would not be able to operate smoothly.

Meanwhile, Zhao Zhen was an expert in this field. He was a manager, but Ye Feng was not. Instead, Ye Feng was a layman and still needed to learn.

…

On the 27th of July, the Maple Forest Company was officially established. There was no band performance or ribbon cutting, just like countless start-ups.

It was established, and then nothing more.

Maple Forest Company was in line with all the standards of a start-up. It only had one type of business, Hedilao Hotpot Restaurant. However, it was called “Maple Forest[1]” and not “River[2]”. This represented Ye Feng’s ambition.

In other words, he started with hotpot, but he would not only work with hotpot.

That night, Ye Feng had a meal with Zhao Zhen and Qi Yun to celebrate the establishment of the company.

At the dining table, Ye Feng bragged a lot. He wasn’t even sure if he could brag this much.

The next morning…

At the Link Trade Building…

Ye Feng signed a rental agreement with a middle-aged man in a suit.

He rented the west district on the 13th floor of the Link Trade building at 500,000 yuan for a year.

This was a 700-square-meter office area. It was well-equipped and could be used for work.

…

In the afternoon, Ye Feng was selecting a site for their new shop while accompanied by Zhao Zhen.

Of course, this was just a preliminary examination. Whether or not they would be able to confirm this location in the future still had to be considered.

Ye Feng’s plan to expand Hedilao was divided into five phases. The first phase was to establish a foothold in Lihe District and influence the surrounding areas. Ye Feng planned to use Lihe District as a base and gradually expand towards Quan City, as well as the entire Lu Province.

In the first phase, he would establish six branches. Thus, there would be a total of seven branches, including the one at Tianda Plaza.

These seven shops were all located near the commercial streets and high-end office buildings in Lihe District.

This plan could not be considered bold. In fact, many people would even feel that it was rather conservative.

However, Ye Feng didn’t think. He knew very well that with his current abilities, if he took too big a step, it would be easy for him to end up in trouble.

During this period of time, he had been reading up on books about management in a frenzy. Basically, other than eating and going to the shop, he was reading books.

Although it was tiring, it was also very fulfilling.

Ye Feng finally understood why some entrepreneurs could only sleep four to five hours a day when they were starting their businesses.

After all, when one had a goal in life and had enough motivation to work hard, one would not feel tired.

Of course, Ye Feng didn’t only sleep for four to five hours. He simply maintained the pace he had followed during his senior year of high school.

…

Ten days later, Hedilao had been established for half a month. Zhao Zhen sat in front of Ye Feng with a stack of financial reports.

“As of now, there are 2,300 registered members at Hedilao. The main reason is that there were more new members during our branch opening activities. In particular, on the last day, there were 432 new members.”

Hedilao’s branch opening activities lasted for three days. It was expected that membership registration would drop after the activities ended.

“The revenue for that day was 200,000 yuan. Our total revenue is 2,970,000 yuan, and our net profits amount to 590,000 yuan.”

This net profit seemed very low, but it was not.

If he compared this against Haidilao’s data from 2019, Haidilao had a revenue of 26.5 billion yuan in 2019, while their net profits were 2.34 billion yuan. Thus, their net profit was about 9% of their total revenue. (He did not use the data from 2020 because of natural disasters.)

Generally speaking, the net profit of large-scale chain brands was relatively low, while small shops could reach very high numbers. Wasn’t that strange?

The main reason was that large-scale chain brands had higher labor costs. They also had relatively higher tax expenditures.

The manpower cost at Haidilao was 30% of their operating costs, which was a rather high figure.

Meanwhile, the cost of raw materials was 40% of the operating costs, which was the industry average.

As for the other expenses, including the travel expenses for the workers, administrative costs, taxes, and so on, small restaurants had none of them.

(Since 2019, the state exempted individual merchants with monthly sales below 100,000 yuan from the consumption tax.)

Therefore, when the company reached a certain stage, his net profits would definitely decline.

Meanwhile, Ye Feng’s Hedilao was still within the scope of a small store. Their net profit ratio could reach 20%, but as it expanded in scale, the net profit ratio would shrink to about 10%.

After Zhao Zhen finished speaking, Ye Feng lightly tapped the table.

In other words, the monthly revenue of Hedeiluo would reach an astonishing six million yuan. The net profit would also reach 1.2 million yuan. As a result, their annual revenue would be over 60 million yuan, while their profits would reach 12 million yuan.

Didn’t this sound very tempting?

However, as previously mentioned, their net interest ratio would fall as they grew larger in scale.

Moreover, the reason why the Tianda branch had such a high revenue was because there was only one shop in Quan City. If people wanted to eat at Hedilao, they could only go there. Once there were more shops, his revenue would also be divided among his branches.

In the future, their estimated annual profit would be around five million yuan.

This was already a result that those in the same industry would be deathly jealous of.

Currently, Hedilao had already made a name for itself near the Tianda Plaza. Although the initial excitement had subsided and people were no longer queueing in line for the entire day, it was still crowded during mealtimes.

As for the opposing Prosperous Flavor ——

Good deeds go unnoticed, but evil deeds spread far and wide. After the incident with the blonde, the nickname of “Jet Fighter” became famous.

Although the Prosperous Flavor headquarters had immediately handled the matter, including clarifying the matter to the public, inviting the Administrative Bureau of Business and Commerce to inspect the matter, and reducing Manager Wu’s ranking to the Acting Branch Manager, its popularity in Tianda Plaza had still been greatly reduced.

As a result, the current atmosphere in Prosperous Flavor was cold and cheerless. On average, only half of the seats were occupied, and that was because there were too many people in Tianda Plaza.

It could be said that there was no way for Prosperous Flavor to turn the situation around.

“Boss Ye.”

Just as Ye Feng was deep in thought, Zhao Zhen started complaining. “We’re earning money now, so shouldn’t we hire a finance staff?”

“Now, everything is on me. I can handle one store, but once the new branch opens, I really can’t handle it alone.”

Ye Feng felt a little embarrassed when he heard this.

He had already thought of hiring some finance staff. He had even thought about setting up the finance department, the human resource department, the logistics department… and a series of other departments that a proper company should have.

However —— he had always forgotten about it.

When he was busy, he forgot about it. When he was studying, he forgot about it. In short, he forgot about it for various reasons.

However, the more specific reason was that Zhao Zhen was able to solve all the problems at hand, so Ye Feng wasn’t that concerned.

However, he couldn’t keep exploiting Zhao Zhen. What if he ran away?

Therefore, Ye Feng immediately promised, “Before the new store opens for business, I will definitely arrange for new staff.”

Upon hearing those words, Zhao Zhen nodded in satisfaction.

“Okay then, I’ll go back to the shop first. Also, Boss Ye, there’s not enough stock in the warehouse.”

Before leaving, Zhao Zhen gave Ye Feng another problem.

The 10,000 packets of hotpot base portions that were given to him by the multiple-choice question could still be sustained for now, but once the new restaurant opened, it would definitely not be enough.

As for the location of the factory, even though there were a few alternatives, Ye Feng was not satisfied with all of them.

[1] the “feng” in Ye Feng’s name means “maple” in Chinese

[2] “he” in Chinese means “river”