Volume 2 Chapter 44 Small company’s potential
The tempest indeed came to the Frestech Chamber of Commerce.
But this tempest did not bring trouble, rather a bunch of Banta City residents who wanted to become rich overnight.
After the product announcement, the Frestech Chamber of Commerce’s small company support plan was reported in the newspaper of several cities. Adding in the fact that the City Lord’s Manor had created a bulletin in the market square, in just a few days, the entirety of Banta City knew about this.
After learning that the farmers of Ireland Village could earn over a hundred gold coins a month from participating in this plan, the people of Banta City instantly became wild.
In a single night, there were countless companies with strange names that appeared in Banta City. Then all these small companies that had suddenly appeared all tried to participate in the Frestech Chamber of Commerce’s small company support plan.
In just a short three days, there were over a thousand companies that had submitted applications.
Although the majority of them were from new companies that had just been formed in the past few days, there were also some that came from small companies that had long existed in Banta City.
With this large amount of applications, the City Lord’s Manor’s officials sent by Count Sean to the Frestech Chamber of Commerce had been worked harder than dogs. They worked from morning to night each day, only getting less than five hours of sleep each day.
It was a good thing that the Frestech Chamber of Commerce had already set a list of standards for this plan. They could eliminate any companies that didn’t meet these standards, which saved them quite a bit of time.
The most basic standard was that for companies applying to this small company support plan, they had to have basic proof of funds.
The lower limit of this was temporarily set by Xu Yi at two hundred gold coins.
Just with this, they had cut down half of the thousand companies that applied.
Adding in the other conditions, the companies that had passed the verification for this small company support plan were only over two hundred companies.
However when these two hundred companies learned that while they were a part of this small company support plan, but couldn’t make magic machines like the Magic Fan, the Magic Rice Cooker, or the Magic Bread Maker, rather they had to make components for these magic machines, over half of these companies chose to withdraw from participating.
In the end, the ones that decided to stay in the small company support plan were only eighty seven companies.
“Xu Yi, when you said that you would let Freeman’s group make the screw bolt, I didn’t feel it was that much since the screw bolt isn’t that important. But now that you’re telling me that you want to leave the components to these small companies to make…..Hey, are you planning to get rid of our household magic machine workshop?”
As Xu Yi’s prestige in the company grew, the people who dared to talk to Xu Yi like this in the Frestech Chamber of Commerce was only Heinz.
It wasn’t his set day of the month to be back in Banta City yet, but after he saw the report on the small company support plan in the «Karma Times», he couldn’t help rushing back.
It was for no other reason than to question Xu Yi face to face.
“Who says that I want to disband the household magic machine workshop?” Xu Yi looked at him in surprise, “I say, did you specially run back today just for this?”
Heinz pointed at the representatives of the eighty seven small companies being led around the household magic machine workshop by Ankhto and angrily said, “Is it not? This workshop is only in charge of producing and assembling those components, but now you want to give the work of producing components to these small companies I’ve never even heard of. What use is there in keeping this workshop? Do we just spend all day assembling those components?”
“Wait a minute……Heinz, I feel that there’s a problem with your logic.” Xu Yi said with knit brows, “Even if I give the work of producing components to these small companies, why does that mean that the workshop would have nothing to do?”
“Nonsense! These things should be done by the workers of our household magic machine workshop, so if you give them to others, of course there’s nothing for our workers to do!” Heinz angrily said.
“Who said that……Oh, I understand.” Xu Yi patted his head before reaching out to grab Heinz’s shoulders as he said with a laugh, “It’s my fault for not telling you clearly. Un…..How to put it, let me just put it clearly for you first. Even if the eighty seven small companies join the component production business, it will not affect the work of our company. I am very certain about this, so you don’t need to worry.”
Although Heinz was angry, he knew that Xu Yi wouldn’t joke about this with him in this situation, so he couldn’t help asking in a confused voice, “What is going on here? Speak clearly.”
“It’s like this. Look, first, you used to be the person in charge of this workshop, so I think you should be very clear that the work capacity of this household magic machine workshop has already reached a bottleneck. The reason for this bottleneck is that our speed in producing components can never match our assembling speed, right?” Xu Yi asked.
Heinz thought about it before nodding, “It is like that, but I adjusted the proportion of workers before I left, so it should be consistent. Could it be that after I left, that kid Ankhto randomly changed things?”
“Not that, Ankhto’s work is very outstanding, you don’t need to worry about that. But if you think about it, even if you adjust the proportion of workers and increase the overall efficiency, this is only a kind of compromise, isn’t it?” Xu Yi asked.
“Then what do you think? You’ve said it before, the speed of producing components can’t compare to the speed of assembling them, so we can’t just recruit a group of people that are just in charge of producing components, right? We don’t have that big of a place right now, unless……” Heinz was suddenly stunned. He thought about it before strangely looking at Xu Yi, “Hey, could it be that you want to use these small companies to replace the need for us to hire workers and find a new place?”
Xu Yi nodded with a full smile, “That’s right, you finally understood.”
Heinz looked at the small company representatives in the distance and his mind quickly turned. After a while, he knit his brows again.
“This still isn’t right. Although by having them make components, it could save us quite a bit of manpower and space, since they are producing and we are buying it from them, they have to earn a profit still. Like this, wouldn’t our profits decrease?”
Xu Yi laughed, “Heinz, let me ask you a question. How much did a number three screw bolt cost us before?”
Heinz was stunned as he looked at Xu Yi, “How do I know this, you should ask that fellow Sebas.”
“I’ve asked, so I know. Let me tell you, for a number three screw bolt, if we were to produce it ourselves, Sebas has calculated the cost to be around twenty five to thirty copper coins.” Xu Yi said.
“Isn’t this wrong? A number three screw bolt is that small and it only uses a bit of iron, so how could it cost around twenty five to thirty copper coins?” Heinz asked in a confused voice.
“Iron is just material cost, but calculating the real cost, we need to add in the manpower cost, the cost for consumption of using the Magic Thread Rolling Machine, as well as various other costs. There are many things that need to be calculated in the end.” Xu Yi explained.
“Un…..alright. Even if there are that many, how is this related to what I just ask for you to suddenly ask this?” Heinz asked.
“Of course it’s related. Now you know that if we make a number three screw bolt ourselves, it cost around twenty five to thirty copper coins. But do you know how much it costs for us to buy a number three screw bolt from the Ireland Chamber of Commerce?” Xu Yi asked back.
“I really don’t pay attention to this. But they also want to earn money, so a number three screw bolt should…..cost around thirty five gold coins. If it’s more, you definitely wouldn’t agree to it.”
Xu Yi revealed a faint smile and shook his head, “You’re wrong. For us to buy a single number three screw bolt from the Ireland Chamber of Commerce, it costs us twenty three copper coins.”
“How is this possible!” Heinz immediately refuted it in a shocked voice, “Could it be that they don’t want to earn money?”
“No, it’s the opposite, they can still earn money. According to my estimates, they can earn around five copper coins from a screw bolt they sell to us at twenty three copper coins.” Xu Yi said.
“Then how is that possible!” Heinz was simply shocked this time, “It takes us twenty five to thirty copper coins to make a single number three screw bolt, so why can they do it for less than twenty copper coins? Could it be that they do it better than us?”
Seeing Heinz’s agitated state, Xu Yi knew that it hurt Heinz’s pride as the manager of the household magic machine workshop. He patted his shoulder and said, “It isn’t related to you. Rather it’s that our Frestech Chamber of Commerce has good worker benefits, so our manpower costs are a bit higher. As for the Ireland Chamber of Commerce, they are their own bosses while also being their own employees, so they can neglect manpower costs. So naturally their costs are lower than ours.”
“Then what about the quality of their screw bolts? If it can’t compare to the ones we make ourselves, I’m still against you doing this.” Heinz said in an unwilling to submit tone.
“It’s a pity, but the quality of the screw bolts they make is a bit better than ours……” Xu Yi said as he helplessly spread his hands.
“Ah? It can’t be? Why is that?” Heinz’s face was covered in disbelief.
“It’s very simple, it’s because they are specialized.” Xu Yi gave a shrug before a look of praise appeared in his eyes, “When I sold them the Magic Thread Rolling Machine and the other equipment, as well as teaching them how to make the screw bolts, I never thought that they would keep making changes during this time. Now the quality of the screw bolts they produce is even better than ours, it’s even better than me……Un, in short it’s good, it definitely meets the requirement of our company.”
Heinz looked at the small company representatives who were at the workshop for two days working with the Thread Rolling Machine and muttered a few words. Then he suddenly asked Xu Yi, “I can understand why you gave the work of making the components to the small companies, but Xu Yi, aren’t you worried of the day these small companies grow up and steal all business from our Frestech Chamber of Commerce?”
Xu Yi revealed a faint smile, “If they really could do this, I would definitely spread both hands in welcome.”
Seeing the honest smile in Xu Yi’s face, Heinz rubbed his head as it ached.
“I forgot, you’re a complete lunatic!”