Reborn since 2005

"Isn't the money enough?"

Yan Xin was stunned by Xiao Shiyu's statement - he had been out for less than two months, why didn't he have enough money?

More than a month ago, they found a new investor and received a capital injection of 200 million.

Before that, there were still tens of millions on the books.

It seems that there was no problem in burning it for a year, so why is there a problem of insufficient funds now?

During this period of time when I was traveling abroad with Feng Xi, I didn't know much about Shiyu Company. Apart from knowing that it had expanded to many places, I didn't know much about anything else.

Now Xiao Shiyu suddenly said this, which confused him:

"How much money is there on the books now? Why isn't it enough?"

"There are only 70 to 80 million left," Xiao Shiyu said.

"You mean you spent more than 1 million in more than a month?" Yan Xin asked her.

"Yes, we spent too much, but we have no choice," Xiao Shiyu said, "Now we have a very strong competitor. They have pushed their business to fifty or sixty cities across the country from the beginning. Municipalities do not need to As I said, all provincial capital cities and sub-provincial cities have their business. Most of these cities are not covered by our business. If we don’t follow up, they will monopolize the business there in just a few months. We can't enter the market - even if we can enter, we have to spend several times more money. We have no choice but to bite the bullet and follow in."

Yan Xin remembered that when he was still in the United States, Xiao Shiyu told him that there were competitors competing for territory with them and asked him if he wanted to follow up. His answer at that time was to follow up.

Follow-up is a must. If you don’t follow up, you will give up the market and the future.

It's just that he didn't expect that the spread of the dish would be so large that it would cover dozens of cities right from the beginning.

Xiao Shiyu was so busy with his own food company every day that it took him a year to start business in only a few first-tier cities.

All I can say is that they are really wealthy.

Under such competition, it is not surprising that so much money was burned in just over a month.

"So now our business has covered dozens of cities across the country?" Yan Xin asked.

"Yes," Xiao Shiyu said, "Now our business coverage is larger than theirs, especially in the Pearl River Delta and Yangtze River Delta."

They have first-mover advantages, experience accumulated over more than a year, plenty of solutions, and more talent reserves.

In the two most important regions, the Yangtze River Delta and the Pearl River Delta, they have been operating for longer and have a good reputation. Although their competitors have deep pockets, it is not easy to defeat them in these two regions.

But in other places, it's not so sure.

People have more money, are more willing to spend money when seizing the market, offer stronger discounts, and have a stronger background.

It is much easier for them to find partners than Shiyu.

In a new market, if two companies enter at the same time, their competitors will obviously have an advantage.

The advantage of Shiyu is that it has accumulated so much experience and has more solutions. The training for new employees is also more standardized, and the service quality will be higher.

It’s impossible for Shiyu Company to give such a big discount when seizing the market. They simply don’t have that much money to burn.

But it is impossible not to give discounts.

There is a slight gap, but the gap cannot be particularly large.

Otherwise, no matter how good the service quality is, people will not choose them.

Except for the Yangtze River Delta and the Pearl River Delta, which have relatively large advantages, in other cities, the fight is back-and-forth, with each other winning or losing.

The Beijing economic circle is also a very important market. Xiao Shiyu is relatively rare here. The current situation is that their market share is not as strong as that of their competitors.

Xiao Shiyu came here not only to get together with Yan Xin more, but also to win this important market.

There are still tens of millions on the books. If we don't continue to expand like crazy, we can still use it for a while.

If there is another wave of such crazy expansion, it may not be able to sustain it for a month.

"What do our partners think?" Yan Xin asked.

"They are very supportive and are very satisfied with the market share we have achieved now," Xiao Shiyu said, "because we only used less than half the money of our competitors to achieve similar results to them."

"That's good!" Yan Xin was relieved.

As long as the partner supports this, that's fine.

People have strong financing capabilities, which can bring them more funds and give them money to burn.

If you don't support this, and there is such a strong competitor in front of you, it will be really difficult to do it.

——At this stage, he really doesn’t have the ability to spend so much money to compete with others.

More than 100 million were burned in more than a month, which is a bit scary.

Of course, a large part of this money is used for investment in property leasing of branches in various places. This does not mean that there will be such a large investment in the future.

But it's still pretty scary.

This is the disadvantage of competitors appearing too early. If they appear a few years later, they can slowly lay out their plans, step by step, and even expand slowly while achieving profitability, without the need for additional Spending too much money.

Now such a strong competitor suddenly appeared. In order to seize market share, they offered huge discounts, forcing them to follow up.

The business in the Pearl River Delta region had already achieved break-even, but now that such a strong competitor has appeared, they have to further reduce food delivery costs, and now they have to continue to lose money.

This is true for the market we started with, let alone other markets.

Still have to follow.

Fortunately, they have embraced the thigh of a consortium. Otherwise, they really can't keep up. In the future, they will probably only be able to operate in the Yangtze River Delta and the Pearl River Delta, losing the opportunity to gain access to the national market.

Although you can still make money by continuing to work in those two areas, it is very inconsistent with Yan Xin's grand plans.

And if you only guard those two markets, you will inevitably be cannibalized by others in the future.

If there is any benefit, it is that it forces them to speed up their pace and expand their layout in all large and medium-sized cities across the country faster.

On the third day after arriving in Beijing, Yan Xin and Xiao Shiyu met with representatives of the partners to discuss the next step of financing.

Neither party had any objections to increasing investment in the future and quickly reached an agreement.

It's just that there is some controversy over how to increase investment.

Should we conduct further financing, bring in more partners, or choose to find a bank loan?

If they choose further financing, the other party can quickly find a partner for them.

They are engaged in investment and have sufficient resources in this area.

However, in this way, the shares held by Yan Xin and Xiao Shiyu will be diluted, and whether they will be able to control the company later is a question.

Even if you can gain control of the company through some supplementary agreements, it's not a problem if most of the shares are in the hands of others.

Yan Xin does not seek to own more than half of the shares with Xiao Shiyu. The bigger the company, the harder it is to own so many shares.

But it can't be spread too much. If the two people together don't even get 20%, he will feel that it is not very interesting.

Go to the bank for a loan, they can get it now.

Although the company is losing money on its books, its performance and market share are there. With the support of such a large consortium, some banks are willing to give them loans. But having too much debt is also a big problem.

After thinking about it for a long time, Yan Xin decided to take a loan.

Shares will definitely still be diluted in the future, but they cannot be diluted so early.

Otherwise, let alone 20%, even 10% may not be able to be saved.

Even if we want to sell these shares at a good price, we have to get a better look at the data.

The more market share it occupies, the better the data is, and the higher the company's valuation.

Therefore, it is better to run the business on your own with debt first, and then introduce new investors after getting a better look at the data.

The other party did not object to his decision and said they could help with the loan.

The matter was settled just like that.

Xiao Shiyu also breathed a sigh of relief after the most troublesome financial problem was solved.

But to be completely reassured is impossible.

Now the company's debt is too high, so high that she feels scared just thinking about it.

If you lose this, you will really have to pay for it for the rest of your life, and there will be no possibility of turning around.

But if he succeeds, he will become a billionaire, a very powerful billionaire, tens of billions level.

It feels like a dream just thinking about it.

She felt like she was gambling now.

Now that we are on the field, there is no other way out except winning.

This time, their loan amount was larger, 500 million.

Yan Xin now has billions of wealth on his books, but if he is asked to come out with 500 million in cash, he doesn't even think about it.

You can't even go to the bank for a loan.

——Because the assets that can be used for mortgage loans have basically been taken out for mortgage loans.

Without so many loans, the companies he invested in would not have been able to develop so fast.

If there is another subprime mortgage crisis, the economy declines and assets shrink, he, a billionaire, will also face bankruptcy.

However, he knows the future development trend. There will not be such a crisis for a long time in the future. The investments are also in markets with great growth potential, so he can rest assured in such a bet.

There are many people in the business who do this.

And he is one of the more conservative ones - at least the loan is backed by assets.

Some people with great skills can obtain large loans without using assets as collateral.

The advantage is that it can develop quickly and reap the dividends of the times.

The disadvantage is that once a thunderstorm occurs, you will face bankruptcy and even jail time.

This time they were able to obtain a loan of 500 million yuan, thanks to which they met such a wealthy partner.

With these 500 million, Xiao Shiyu has the confidence to compete with competitors for the market.

They have mature rules, a good reputation accumulated over more than a year, and an excellent team that has been honed. In terms of competing for the market, they pay less cost.

Although the other party is wealthy, it has not grown to the desperate scale of later generations. There is money to burn, but there is no endless stream of money to burn.

If we continue to expand the market, others may not have the financial resources to keep up.

The other party offers a bigger discount, which means they lose more money on each order.

With competition like this, it’s hard to say who won’t be able to hold on in the end.

After the company obtained this huge loan, Xiao Shiyu became more confident. The first thing he did was to use the double festival as an excuse to increase the preferential treatment of the Beijing economic circle, which was better than what his competitors had given here. The discounts are bigger.

The only purpose is to regain the lost share.

With a better reputation, a more professional team, and now greater discounts, it is not that difficult to regain market share.

This preferential treatment is currently limited to the Beijing economic circle, mainly those two municipalities.

Other regions do not offer such great discounts - there is not so much money to burn.

As long as they regain this market share, they will have advantages in the three most important economic regions.

If the other party wants to compete with them, they can only continue to increase the discounts and at the same time increase the intensity of losing money.

At the same time, Xiao Shiyu is also planning to expand the business to more cities.

We must seize territory from our competitors in all large and medium-sized cities across the country.

The funding problem has been temporarily solved, and the biggest problem has become that of employees.

It expanded too quickly and was severely understaffed.

This thing requires experienced people to guide newbies, but this company has only been established for more than a year, and they simply don’t have that many senior employees.

The current situation is that those who have been in the industry for one or two months have already become experienced employees and need to recruit new people.

Those who have been in the industry for more than half a year are already senior employees, and many have been entrusted with important tasks to recruit people in new areas and open up new markets.

However, this problem is not unique to them, competitors also have it, and this problem is more serious than them.

——Their company has been established for more than a year, but the competitor's company has only been established for two or three months, so the problem is even bigger.

This is also the reason why the other party obviously spends more money but has a smaller overall market share than them - the team is immature, there are constant problems in service, they are often complained, and there is no mature solution, which makes the reputation very bad.

But they don’t have that much time to train so many employees.

If you really do that, you will miss the best opportunity to enter the market.

Now that Xiao Shiyu has received new capital injections, he has launched his first offensive in the capital, and the other party has little power to fight back.

In just a few days, she had already captured most of the market share in the Beijing economic circle.

Within a few days, representatives from competitors came to visit.

Visited her and Yan Xin.

This time we are not declaring war, but seeking to end the war. The meaning is the same - the market is so big that it can accommodate two companies, and there is no need for us to engage in such vicious competition.

If this continues, they won't be able to afford the loss.

(End of this chapter)