To Increase Revenue

I did a rough calculation and I doubt whether the revenue would just be merely about 75-80% as what the seller has stated.

So my next steps are:

1. To observe the success factors (there should be some) of the competitors around
2. To refine the product types
3. To explore the possibilities of prolonging the working hours on potential markets: dinner time / Sundays

Still I don't really think that its a money losing business but if we have to treat it as an investment we could not go there and work on ourselves if our goal is to obtain information on this business model and expand it if it is proved to be successful.

For bullet #1 I need to go there again but to the competitors' restaurants. For bullet #2 I have some thoughts in mind. The product types have to be simple and easy to be remembered. It is getting me very excited actually, hahaha. I should try making some dishes at home. :p

For bullet #3 it is not a very urgent thing because we still could do it even after we have acquired it. The problem is whether the forecast is as optimmistic as we thought.

Please feel free to leave comments.

Are we taught to... (I)

I was a good student when I was in school, although I can't deny that I'm rebellious in my mind. It was not really exposed to others mainly because of the lack of bravery. Yet I found that this rebellious power is always useful, at least, more rewarding as a whole then how I was taught, or how I perceived from what I learnt from schools, eventhough the original intention of the teaching is not leading to that result...

Are we taught to be diligent?
Yes. It seems that its more important to be diligent than to get things done, or to be exact, get things done efficiently.

In an office environment
Many people are working diligently but their monetary rewards and satisfaction could vary. Some management, esp. Chinese, would think that its always good to work overtime. It could be right or wrong. If its right, then its based on the assumption that the staff would spontaneously take up the tasks not being done by others, or some tasks used to be done by someone (by 'stealing' them). The former is the best, whilst the second is not really too good. It probably would benefit the employer, but its just probably, based on another assumption that all the works are being down efficiently. It could be wrong, when the staff wants to show his/her loyalty and performance by staying late without doing anything. Or it'd also be wrong that the staff would like to show that (s)he is a good staff because (s)he is staying late, but the way (s)he works is inefficient because (s)he doesn't know how to work efficiently, or is reluctant to do so 'cos (s)he needs to think how to do the tasks assigned in a more efficient way, and the reward of staying overtime is better than doing things efficiently, because the employer could only see the result, but not how the thing was done and how long it takes the thing to be done.

But I couldn't keep on thinking that its a conspiracy but those with power to teach others to work diligent and generate $$ for them.

下流社群
It does not merely exist in office environment. It hurts more when people believe that its the way of living by working diligently, no matter what tasks, (s)he is taking up. Some people would just work and work and live humbly. The reward is that (s)he would gain others respect by working diligently. I believe that in most of the cases they simply are not thinking how to make money more efficiently, like that if they are in a different career they would earn more $$. That's why it formed the generation of 下流社群, i.e. those who was brought up with a certain social status and is then downgraded. Like those who has been studying for a variety of degrees, no matter its a bachelor degree or a master degree, but they would just like to take up some tasks with low wages. They would think that they could gain respect from others because they work diligently. Yet what's behind is that they could not encounter their fear of being challenged and being the loser in the society. There are many excuses like they want to find some tasks they like (it could be true and good - but when its an excuse certainly its no good), or they do not want to face the cunning people in the commercial world (that's an escape and they are reluctant to grow up and become mature enough to face the reality). It seems that respect is their shield of the fear of all these. Of course, may be the weight of being respect is just too low in my mind.

I like the term 'social ladder'. You could go up and down. You have to know whether you want to go up or down.

Why is that? Its because of the wrong shift of focus. The focus of being diligent implied a lot of assumptions which might be too difficult for the students (or the teachers) to understand or to explain. So - to be lazy - we are just taught to be diligent. It's a very good example of showing the lazy generalization of terminology because 'diligent' could be something positive with assumptions behind. Diligence is a means to achieve our goals, not the vice versa.

Addition on Jul 29:

After I have read more about 下流社群 I found that what I have written is different from what's the definition of 下流社會 because those people are simply staying 'idle'. Maybe those I described here are better than those in 下流社會.... hahaha...

To be continued....

More info on 下流社會:
下流社會：新社會階級的出現
作者：三浦展
譯者：吳忠恩
出版社：高寶
ISBN：9867088549

Question list & Investment Return

This is the list of questions in my mind:

1. What's the composition of the revenue: sit-in, take-away / breakfast, lunch / coffee (drinks), lunch-box?
2. Regarding the composition
   
3. What's the allocation of food cost?
4. From the seller's viewpoint, what's the demographic composition of the clients?

For sure a reform is necessary... why?

'cos I have been thinking about the idea of it. It's fun to have a shop ourselves but it could be a irrational investment decision. But what if the return could only be 2% p.a.?

So why don't I simply buy a stock with 6% dividends p.a.?
The reason is, we'd develop the business and make it more profitable. Actually based on the current info I have the return is already pretty high (with double-digit return).

However, if its that profitable, why does the seller want to sell it? Obviously its because of the 2 reasons we have mentioned earlier within our own discussion: its too tough to operate it and its way different from what was imagined by the seller.

Then, if the return is that good, why others don't rush in? Well, I'd say, doing business is to exchange the willingness of taking risk with money. No one could guarantee the return except ourselves. If we work hard and intelligently, we'd guarantee the return. Its the preparation for our future cash inflow - $$ flowing in when you are sleeping.

I could see no reason to step back as an investment.

Actually what'd make us step back is that we can't solve the problems we have mentioned early. Yet, the ability of identifying the problems is already a v good start.

The Reformer - build upon the current model

'我創業都是從來不知道自己是在做什麼的， 更未試過把所有經營問題想通想透了才動手。我做事的宗旨一向都是做了才算，一路做、一路嘗試; 一路撞板、一路體會; 一路修正、一路突破。我相信在無知的領域闖蕩、嘗試是創造知識、突破認知的唯一方法。' 黎智英: 我做生意的心得 (p.196)

After the second site visit, I guess we need to do some reform to the current situation. There're more problems after this because we could not reconcile the revenue number we have. It is expected but its really harder than I thought.

So - let me think in this way:
What are the hindering factors which would stop us in this buyout?

Factors include:

• seller insists on the price she quoted
• the revenue numbers could be unreasonably understated
• potential risks which would heavily disturb the current situation, e.g. the sharp rise of rent

For me, I'd still choose to go ahead but we have to solve the problems I mentioned in the previous article and we really have to reform.

Reform includes making the food more delicious and welcomed by neighbourhood, reducing choice on the menu, introducing some special offers regularly. I need to do my own calculation and see where the $ would come from. It seems that its time for us to list out what queries we have to raise to the seller... Jeffrey, hope that you'd list it out before you go to the US...

I would just think as long as its a profitable business (no matter how thin the profit is), the improvement could be built upon the current business model. We could do our own maths if we find their way of running it sucks. Of course, we're not yet into the industry. No one knows what's behind the scene... yet, the initial outlay is not high.

There're some successful models in the market of which we could follow. It should be the way how we go. I wouldn't think that the current setup of the shop is a total failure. Actually it shouldn't be categorized as a failure if its really profitable. As a business student I should be capable of using what I learnt from management books in improving the business processes and efficiency in order to make it more profitable.

Improvement could be made basically in: Raising the revenue & lowering the cost - everyone knows the principle but not the execution. As long as we have in mind that our objectives are earning $$, obtaining business info on this kind of business model and understanding how a restaurant / coffee shop owner would think in choosing the appropriate suppliers, it'd be fine.

Site Visit - Jul 23, 2006

I went to the site with J & P today. It looks fine and hope that it's a good start. Probably I need to find a priest to agonize the shop for ourselves. :p

So we have the following tasks to do:

1. To find out which part composes most of their revenue
2. To solve the problem that we have to appoint a shop manager
3. How we could monitor the business
4. How we could learn making all those products in the shortest period of time and how we could manage it efficiently
5. To find suitable investors

I have the answers to these questions in my mind:

1. Site visit again this week during weekdays when it opens
2. It's the hardest part. 've discussed it with P and I'd post an ad on newspaper to check what qualities the people in the market could have
3. It's the hardest part. Maybe a CCTV? P agreed to it.
4. It's another difficult part. How? To learn it and teach the chef we'd hire later?
5. It might be the easiest on but still... we need to.

Is there more questions?

The situation now becomes more straightforward. We need to do these step by step and then negotiate with the seller. I guess I'd like to meet the seller when you're in the US, would you have any objection against it?

In search of limit

I tried to start to write something in xanga.com and I didn't have the patience and consistency to continue. Hope that I won't give up that easily this time.

It's always a dilemma to decide whether to start writing a blog or not. I'm the kind of person who doesn't really want to reveal my mind before other people. However, its also worthwhile to let more people know about my mind and give some comments to refine my ideas.

Now came the chance. It's a business plan project. I want to write down my idea flow and thus I'd review them easily and my partners could also understand that as well.

It's always said that I'm not v suitable for starting a business 'cos of my characters and my astrology sign setting. Rather risk-adverse, I have insufficient bravery and insufficient capital, haha. Yet... for the future, it worths a try before I'm too old (probably I'm too old now but I just dun realize it.)

I'm reading Jimmy Lai (黎智英)'s new book, 我做生意的心得 (The know-how of how I do business). He's talking a lot about politics in this book but I understand that he wants to let the readers know how the political environment in China could affect its economic growth. anyway. That's not what I want to talk about. I want to talk about what's the punch line today for me: '我到底可以在自己身上發掘出多少潛質? 我這一生到底可以呈現多少上帝賜予的恩 典?' p.93 (how much potential I could find from myself? In my life how much grace from God I could manifest?) - and it gives today's title: In search of limit.

I love freedom. That's why I read law. It tells me where my limit could be. That's why I started a business. I want to have financial freedom. When I know that $$ could flow into my bank account when I'm sleeping, I guess that's when I have financial freedom.

Let's see how far I could go.